Healthcare Fraud

January 12, 2017

New York announced the indictment and arraignment of attorney Anthony Cornachio, 74, of Garden City as well as the indictment and arraignment of NRI Group, LLC. (“NRI”) and Canarsie A.W.A.R.E., Inc. (“Canarsie”), both Medicaid-enrolled drug treatment programs companies controlled by Cornachio. Also announced was the indictment and arraignment of three-quarter housing operators Yury Baumblit, 66, and Rimma Baumblit, 60, of Brooklyn, and their company Back on Track Group, Inc. In papers unsealed in New York State Supreme Court, Kings County, prosecutors allege that Yury Baumblit and Rimma Baumblit, in exchange for payments from Cornachio’s companies, forced residents of their three-quarter homes to attend treatment at NRI and Canarsie regardless of the residents’ actual need for drug treatment services or face eviction. All of the residences leased by Back on Track Group, Inc. and operated by Yury Baumblit and Rimma Baumblit as three-quarter homes were located in Kings County. During the course of this scheme, which dates back to at least 2013, Cornachio allegedly paid Back on Track Group, Inc. over $900,000.00 in illegal kickbacks. As a result of this kickback scheme, prosecutors allege that Cornachio, through NRI and Canarsie, submitted, and caused to be submitted, at least $1.7 million in false claims for reimbursement to Medicaid. These claims, prosecutors allege, were fraudulent because they resulted from illegal kickbacks and were often medically unnecessary. NY

$2.6 Million Whistleblower Settlement With Bay Sleep Clinic

The clinic will settle whistleblower allegations of using unlicensed technicians and unapproved locations and of doctor kickback referrals. Constantine Cannon LLP is pleased to announce a $2.6 million settlement on behalf of its client for whistleblower allegations against Bay Sleep Clinic. The settlement was announced by the United States government on December 28, 2016, against Bay Sleep Clinic, which currently operates 20 locations throughout northern California; its related Qualium Corporation and Amerimed Corporation businesses; and owners and operators Anooshiravan Mostowfipour and Tara Nader. The “qui tam,” or whistleblower, lawsuit alleged that the defendants fraudulently billed Medicare for sleep studies conducted by unlicensed individuals in unapproved locations; improperly dispensed durable medical equipment from unapproved locations using unlicensed technicians; and paid doctors for referrals in violation of the federal Anti-Kickback Statute. The defendants neither admitted nor denied liability. The whistleblower, Elma F. Dresser, is a former Bay Sleep Clinic employee who worked as a sleep technician and marketer for eight years. Through her various roles at the company, Ms. Dresser became familiar with the defendants’ alleged scheme to bilk money from Medicare. She filed her suit in 2012, leading the government to investigate the claims and join the case. Ms. Dresser was represented by Eric R. Havian, partner and attorney, Jessica T. Moore, partner and attorney, Anne Hayes Hartman, partner and attorney, Hallie Noecker, attorney, and Sarah Poppy Alexander, attorney of Constantine Cannon’s whistleblower practice in San Francisco, along with co-counsel from the Law Office of William C. Dresser. “It’s rewarding to see the alleged fraudsters held responsible. Because of the close cooperation and work between the whistleblower and the government, we were able to recover significant funds for the government,” said Anne Hayes Hartman, co-lead counsel on the case. “It is gratifying to represent people like Elma Dresser, who bravely stepped forward with knowledge of her employer’s wrongdoing. Many do not appreciate the risks whistleblowers face to hold alleged wrongdoers accountable.” “Sleep studies are a quickly expanding medical field,” said Jessica T. Moore, who served as co- lead counsel on the case. “Ensuring the safety of these procedures should be a top priority of the government for all patients, Medicare and otherwise.” The federal False Claims Act allows whistleblowers to sue companies that are defrauding the government and receive a reward if the government recovers any funds as a result. The government may choose to intervene in the lawsuit, as it has done in this case. The False Claims Act is one of the government’s most effective weapons in combatting fraud, waste, and abuse by those who contract with the government. Healthcare fraud alone is estimated to cost the U.S. billions of dollars. Such fraud can be difficult to discern without access to inside information; well-placed whistleblowers are necessary to provide the information the government might otherwise lack to help stop these practices.

January 6, 2017

Constantine Cannon Announces a $2.6 Million Whistleblower Settlement With Bay Sleep Clinic.  Click here for the press release.

December 28, 2016

Bay Sleep Clinic, its related businesses -- Qualium Corporation and Amerimed Corporation -- and their owners and operators, Anooshiravan Mostowfipour and Tara Nader, agreed to pay $2.6 million to settle allegations they fraudulently charged Medicare for diagnostic sleep tests and medical devices in violation of Medicare payment rules. The allegations originated in a whistleblower lawsuit filed by Elma F. Dresser under the qui tam provisions of the False Claims Act. She will receive a whistleblower award of approximately $545,000 from the proceeds of the government's recovery. DOJ (NDCA)

December 15, 2016

Raciel Leon, manager of Mercy Home Care Inc. and a billing employee for D&D&D Home Health Care Inc. was convicted for his role in a $2.5 million Medicare fraud scheme. According to evidence presented at trial, Leon and his co-conspirators used the companies to submit false claims to Medicare that were based on services that were not medically necessary, not actually provided and for patients that were procured through the payment of illegal kickbacks to doctors and patient recruiters.  DOJ

December 9, 2016

Michigan resident Renald Dasine pleaded guilty to fraud charges for his role in a scheme to defraud Medicare out of approximately $6.3 million while he acted as an unlicensed physician at Detroit in-home physician services company B&M Visiting Doctors PLC.  DOJ

December 7, 2016

Jacksonville, Florida-based orthopedic medical group Southeast Orthopedic Specialists agreed to pay roughly $4.5 million to resolve allegations that it violated the False Claims Act by billing federal healthcare programs for services that were not medically necessary.  DOJ (MDFL)

December 7, 2016

Lifepoint Dental Group, LLC, and its owners Aaron Blass, Angelina Blass, Mindy Richtsmeier, and Brad Richtsmeier, agreed to pay more than $300,000 to settle allegations that they violated the False Claims Act by submitting claims for dental procedures, including scalings and root planings, that were either medically unnecessary or did not happen.  The allegations originated in a whistleblower lawsuit filed by two former Lifepoint employees under the qui tam provisions of the False Claims Act.  The whistleblowers will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery.  DOJ (NDIA)

November 28, 2016

Iowa-based Hematology and Oncology Center of Iowa, P.C. and its only corporate officer, Dr. Magdy Elsawy, agreed to pay $176,460 to settle allegations that they violated the False Claims Act by submitting false billings for cancer drugs that were not approved, misbranded, or counterfeit, and by submitting office visit claims for visits that were either medically unnecessary or were upcoded to reflect more complex encounters than what actually happened.  DOJ (NDIA)