Healthcare Fraud

Radiology Practice - Healthcare Fraud/Unnecessary Testing ($10.5M)

Constantine Cannon represented two whistleblowers in a False Claims Act case alleging New York-based Zwanger-Pesiri Radiology improperly billed Medicare for testing that was medically unnecessary or never performed.  In November 2016, the company agreed to pay $10.5 million to settle both criminal and civil charges.  Our clients received a whistleblower award of more than $1 million.  Read more -- Newsday, DOJ, PR Newswire, CC.

November 16, 2016

New York announced that Zwanger & Pesiri Radiology Group, LLP, Zwanger Radiology P.C. and Dr. Steven Mendelson (collectively, “Zwanger”) will pay $8,153,727 to resolve allegations that the defendants knowingly submitted false claims to Medicare and Medicaid. The settlement resolved allegations that from January 1, 2003 through October 26, 2015, Zwanger submitted claims for services provided or supervised by physicians, or at a Zwanger location, that were not enrolled in Medicare and/or Medicaid and therefore ineligible for payment. Zwanger falsely claimed that Dr. Mendelson, who was a Medicare and Medicaid enrolled provider, had in fact performed the procedures. The settlement also resolved allegations that from January 1, 2008 through February 28, 2014, Zwanger submitted false claims to Medicare and Medicaid for certain radiology procedures that were not ordered by a treating physician. These procedures included the automatic performance of certain types of x-rays, and the automatic performance of ultrasounds in female patients, even these both procedures were not ordered by a treating physician. NY

November 16, 2016

Washington announced that CHI Franciscan will provide more than $1.1 million in healthcare cost relief after an investigation into mislabeled charges and inadequate fee disclosures. CHI Franciscan operates three urgent care clinics in Kitsap County that charge a facility fee due to their affiliation with the hospital. The clinics must disclose the fee to patients through a variety of methods, including identification on the clinic’s website, signage at the clinic and a notice provided to patients before they receive care. The Attorney General pursued an investigation based on evidence that Franciscan did not meet its obligation to disclose this fee. In addition, the Attorney General investigated concerns that CHI Franciscan mislabeled facility fees as emergency room fees during a three month period in 2015. WA

November 11, 2016

Marie Neba, co-owner of Houston-based home-health agency Fiango Home Healthcare Inc., was convicted for her role in a $13 million Medicare fraud and money laundering scheme.  According to the evidence presented at trial and admissions made in the guilty plea of her husband and co-owner Ebong Tilong, Neba and Tilong paid illegal kickbacks to physicians in exchange for authorizing medically unnecessary home-health services for Medicare beneficiaries.  They also paid illegal kickbacks to patient recruiters for referring Medicare beneficiaries for home-health services and to Medicare beneficiaries for allowing them to bill Medicare using their Medicare information for home-health services that were not medically necessary or not provided.  Neba and Tilong also falsified medical records to make it appear as though the Medicare beneficiaries qualified for and received home-health services.  DOJ

November 8, 2016

Niurka Fernandez and her son Roberto Alvarez were sentenced to 120 months and 30 months in prison, respectively, for their roles in spearheading a $9.5 million health care fraud conspiracy that targeted Medicare Part D.  In addition, Fernandez and Alvarez were ordered to pay respectively $9.5 million and $1.5 million in restitution and to forfeit the same amounts.  As part of her guilty plea, Fernandez admitted she co-owned and operated several pharmacies in the Miami area, including Calan Pharmacy & Discount Service LLC and Bertyann Corp. (doing business as Best Pharmacy), for the purpose of submitting false and fraudulent claims through Medicare Part D by paying kickbacks to Medicare beneficiaries and patient recruiters for prescriptions that were medically unnecessary.  DOJ

November 7, 2016

Badar Ahmadani, co-owner of Detroit home health care company Hands on Healing Home Care Inc., was sentenced to 96 months in prison and to pay roughly $38 million in restitution for his role in a Medicare fraud scheme that caused approximately $33 million in losses.  According to evidence presented at trial, Ahmadani and his co-conspirators obtained patients by paying cash kickbacks to recruiters, who in turn paid cash to patients to induce them to sign up for home health care with companies owned by co-defendant Zafar Mehmood: Access Care Home Care Inc., Patient Care Home Care Inc., Hands On Healing Home Care Inc. and All State Home Care Inc.  The evidence also showed that Mehmood and Ahmadani paid kickbacks to physicians to refer patients to the companies for home health care services that were medically unnecessary and/or not provided.  Mehmood was previously sentenced to 360 months in prison and to pay roughly $40.5 million in restitution.  DOJ

November 7, 2016

Pennsylvania-based medical device manufacturer Biocompatibles Inc., a subsidiary of British-based BTG plc, pleaded guilty and agreed to pay more than $36 million for violating the False Claims Act and Food, Drug and Cosmetic Act by misbranding its embolic device LC Bead, which is used to treat liver cancer, among other diseases, and by marketing and selling the product for uses not approved by the FDA.  The matter originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Ryan Bliss who oversaw Bicompatibles’ North American marketing.  He will receive a whistleblower award of approximately $5.1 million from the proceeds of the government’s False Claims Act recovery.  Whistleblower Insider

October 31, 2016

Tariq Mahmood, former owner and operator of several rural hospitals across Texas, was ordered to pay roughly $1.2 million for violating the False Claims Act following his conviction for committing health care fraud and for aggravated identity theft.  DOJ (EDTX)

October 28, 2016

Zafar Mehmood, owner of several Detroit home health care companies was sentenced to 360 months in prison and to pay roughly $40.5 million for his role in a Medicare fraud scheme that caused approximately $33 million in losses.  According to evidence presented at trial, Mehmood participated in a scheme in which he obtained patients by paying cash kickbacks to recruiters, who in turn paid cash to patients to induce them to sign up for home health care with Mehmood’s companies: Access Care Home Care Inc., Patient Care Home Care Inc., Hands On Healing Home Care Inc. and All State Home Care Inc.  The evidence also showed that he paid kickbacks to physicians to refer patients to the companies for unnecessary home health care services.  DOJ  

October 28, 2016

Albert Einstein Healthcare Network and the Einstein Practice Plan agreed to pay roughly $970,000 to resolve charges they violated the False Claims Act by improperly billing Medicare for services submitted on behalf of a cardiologist that were not medically necessary or lacked sufficient documentation.  After it discovered the problem, the Einstein defendants took corrective action to resolve the improper payments and disclosed the matter to the government.  DOJ (EDPA)