Anti-Kickback and Stark

February 9, 2016

Miami physician Henry Lora, medical director of Miami-area clinic Merfi Corporation, pleaded guilty for his role in a Medicare fraud scheme that caused more than $20 million in losses.  Lora admitted that in exchange for kickbacks and bribes, he and his co-conspirators wrote prescriptions for home health care and other services for Medicare beneficiaries that were not medically necessary or not provided.  Lora and his co-conspirators also falsified patient records to make it appear as if the beneficiaries qualified for these services.  In March 2014, Isabel Medina, the owner of Merfi, was sentenced to nine years in prison for conspiracy to commit health care fraud.  DOJ

January 29, 2016

Amalya Cherniavsky and her husband Vladislav Tcherniavsky, the former owner and former operator of California-based durable medical equipment supply company JC Medical Supply were sentenced  for their roles in a $1.5 million Medicare fraud scheme.  They were ordered to pay $614,418 in restitution and Tcherniavsky was ordered to serve 51 months in prison.  The evidence at trial demonstrated that they paid illegal kickbacks to patient recruiters in exchange for patient referrals and paid kickbacks to physicians for fraudulent prescriptions—primarily for expensive, medically unnecessary power wheelchairs—which the defendants then used to support fraudulent bills to Medicare.  DOJ

January 27, 2016

Mohammed Elsaleh, owner and operator of former Houston-area ambulance company National Care EMS agreed to settle allegations that he and the company provided kickbacks to various nursing facilities and hospitals in exchange for rights to the institutions’ more lucrative Medicare and Medicaid transport referrals.  The settlement calls for Elsaleh to pay $125,000 to resolve the “swapping” allegations made against him and the company.  Elsaleh’s brother, Husam Alsaleh, the owner and operator of a successor company also called National Care EMS agreed to pay $120,000 in furtherance of the settlement.  DOJ (SDTX)

January 15, 2016

Oceanside, California-based hospital Tri-City Medical Center agreed to pay $3,278,464 to resolve allegations it violated the Stark Law and False Claims Act by maintaining improper financial arrangements with community-based physicians and physician groups.  According to the government, Tri-City maintained 97 improper financial arrangements with physicians and physician groups, including with its former chief of staff.  DOJ

January 14, 2016

Nery Cowan, a consultant and Medicare biller for Greater Miami Behavioral Healthcare Center Inc., pleaded guilty in connection with a $63 million health care fraud and money laundering scheme.  Behavioral Healthcare is a now-defunct Miami-area partial hospitalization program (PHP) that purported to provide intensive treatment for severe mental illness.  Specifically, Cowan directed the payment of kickbacks to patient brokers and others in exchange for Medicare beneficiary referrals and admitted concealing the kickback payments to shell companies owned by “patient brokers” who, on behalf of Greater Miami, solicited Medicare beneficiaries from assisted living facilities, halfway houses and drug courts located throughout the Southern District of Florida.  Cowan and her co-conspirators disguised these monthly kickbacks as “outreach” or “marketing” payments through HNB-Stell Care Inc., a sham staffing company.  DOJ

January 8, 2016

Dr. David G. Bostwick, owner of Virginia-based pathology lab Bostwick Laboratories Inc., agreed to pay up to $3.75 million to resolve charges of violating the False Claims Act for billing Medicare and Medicaid for medically unnecessary cancer detection tests and offering incentives to physicians to obtain Medicare and Medicaid business.  Specifically, Dr. Bostwick allegedly directed Bostwick Laboratories to bill Medicare and Medicaid for expensive cancer detection tests known as Fluorescent In Situ Hybridization (FISH) tests, as well as other tests, that were not medically necessary and were performed without the treating physicians’ consent or order.  FISH tests are used to detect bladder cancer.  Bostwick also allegedly offered various discounts and billing arrangements to treating physicians to induce them to refer business in violation of the Anti-Kickback Statute.  On Aug. 28, 2014, Bostwick Laboratories previously agreed to pay over $6.5 million to resolve the allegations in this lawsuit.  The allegations were originally raised in a whistleblower lawsuit brought by Michael Daugherty, who works in the industry, under the qui tam provisions of the False Claims Act.  Daugherty will receive a whistleblower award of over $2.5 million from the government’s settlements.  DOJ

January 8, 2016

Damian Mayol, the president of Miami-based transportation company Transportation Services Providers Inc., was convicted for his role in a health care fraud scheme involving three mental health centers based in Miami that resulted in the submission of approximately $70 million in false and fraudulent claims to Medicare.  According to evidence presented at trial, Mayol used his company to coordinate the payment of illegal health care kickbacks to recruiters, who in return referred patients to three now-defunct clinics in the Miami area:  R&S Community Mental Health Inc., St. Theresa Community Mental Health Center Inc. and New Day Community Mental Health Center LLC.  On behalf of the recruited beneficiaries, the centers billed Medicare for costly partial hospitalization program services that were not medically necessary or not provided to patients.  DOJ

January 4, 2016

Hovik Simitian, the former owner and operator of three medical clinics located in Los Angeles — Columbia Medical Group Inc., Life Care Medical Clinic and Safe Health Medical Clinic — was sentenced to 78 months in prison for his role in submitting more than $4.5 million in fraudulent claims to Medicare.  Simitian admitted paying illegal cash kickbacks to patient recruiters who brought Medicare beneficiaries to the clinics and for billing Medicare for lab tests and other services that were not medically necessary or actually provided, which he supported with false documentation.  DOJ

December 23, 2015

Memorial Health, Inc., Memorial Health University Medical Center, Inc., Provident Health Services, Inc., and MPPG, Inc. (d/b/a Memorial Health University Physicians) agreed to pay roughly $10 million to settle charges they violated the False Claims Act by submitting claims to the Government in violation of the Stark Law which prohibits hospitals from entering into improper financial relationships with referring physicians.  The settlement is the largest civil health care fraud recovery in the history of the United States Attorney’s Office for the Southern District of Georgia.  The allegations first arose in a whistleblower lawsuit filed by former Memorial Health CEO Phillip Schaengold under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-disclosed whistleblower reward from the proceeds of the government’s recovery. DOJ (SDGA)