Medicaid

January 31, 2018

New York announced that Home Family Care, Inc. ("Home Family") of Brooklyn, NY and its President, Alexander Kiselev, will pay $6.415 million to resolve allegations that they violated the federal and New York False Claims Acts by falsely billing the New York State Medicaid program for home health care services that were not provided or that were provided by unqualified staff. The settlement resolves allegations in a complaint filed by the State of New York and the United States that Home Family routinely permitted its aides to circumvent verification procedures purportedly put in place by Home Family to ensure that its aides were providing scheduled services to Medicaid recipients who depended upon them. As alleged in the complaint, even after Home Family put in place an electronic attendance verification system which purportedly required aides to call a central number to "clock in" and "clock out" of their shifts before their services could be billed, Home Family aides routinely ignored this requirement and failed to clock in or out of their shifts – yet were still paid for them. NY

January 22, 2018

Maryland announced it has joined the United States, the District of Columbia, and 19 other states in a settlement agreement relating to allegations against Benevis, LLC (formerly known as NCDR, LLC) and 133 Kool Smiles clinics that received non-clinical practice support from Benevis, LLC. Maryland will receive $1.022 million as a result of the settlement. The settlement will resolve allegations that Benevis/Kool Smiles knowingly submitted or caused to be submitted false claims to the Medicaid program related to dental services provided to pediatric patients. Under the settlement, Benevis/Kool Smiles agreed to pay $23.9 million collectively to the federal and state governments. The participating states will share $9.65 million of the total settlement. MD

January 10, 2018

Dental management company Benevis LLC (formerly known as NCDR LLC), and more than 130 of its affiliated Kool Smiles dental clinics for which Benevis provides business management and administrative services, agreed to pay $23.9 million to settle allegations of violating the False Claims Act by submitting false claims for payment to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid.  According to the government, Benevis and Kool Smiles clinics located throughout 17 states submitted false claims to state Medicaid programs for medically unnecessary pulpotomies (baby root canals), tooth extractions, and stainless steel crowns, in addition to seeking payment for pulpotomies that were never performed.  The government further alleged that Kool Smiles clinics routinely pressured and incentivized dentists to meet production goals through a system that disciplined “unproductive” dentists and awarded “productive” dentists with substantial cash bonuses based on the revenue generated by the procedures they performed.  The allegations originated in five whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.  Three of the whistleblowers -- former Kool Smiles employees Adam Abendano, Poonam Rai, and Robin Fitzgerald -- will receive a whistleblower award of more than $2.4 million from the proceeds of the government's recovery. DOJ

December 22, 2017

Kmart Corporation, a wholly owned subsidiary of Sears Holdings Corporation, agreed to pay $32.3 million to settle allegations that Kmart violated the False Claims Act through Kmart pharmacies offering discounted generic drug prices to cash-paying customers through various club programs without disclosing those prices when reporting to federal health programs its usual and customary prices. Usual and customary pricing is typically used by Medicare and the other federal health programs to establish reimbursement rates. The settlement is a part of a global $59 million settlement that includes a resolution of state Medicaid and insurance claims against Kmart. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by James Garbe. He will receive a whistleblower award of $9.3 million. DOJ

November 22, 2017

Thaddeus M.S. Bereday, the former general counsel of WellCare Health Plans Inc., a company that operates health maintenance organizations in several states, was sentenced to six months in prison for his role in a $35 million health care fraud scheme.  Specifically, Bereday and others were charged with submitting inflated expenditure information in the WellCare's annual reports to Florida Medicaid in order to reduce the WellCare HMOs’ contractual payback obligations for behavioral health care services.  DOJ

October 24, 2017

A federal judge awarded the government roughly $2 million in a verdict against Maryland-based home health care company Dynamic Visions, Inc. for violating the False Claims Act because its employees repeatedly and routinely falsified records to obtain funds from Medicaid.  Specifically, a government investigation found many of the company's patient files did not contain physician authorizations, called “plans of care,” as required under applicable regulations; contained plans of care that were not signed by physicians or other qualified health care workers; or contained forged signatures in order to cover up the lack of a physician’s authorization. DOJ (DDC)

September 5, 2017

National dental chain Dental Dreams, LLC agreed to pay $1.375 million to resolve allegations it improperly billed the Massachusetts Medicaid program for unnecessary and unjustifiable dental procedures.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Dental Dreams former employee.  The whistleblower will receive an award from the proceeds of the government's recovery.  DOJ (DMA)

September 1, 2017

New Mexico-based Christus St. Vincent Regional Medical Center and its partner Texas-based Christus Health agreed to pay $12.24 million to resolve allegations they violated the False Claims Act by making illegal donations to county governments which were used to fund the state share of Medicaid payments to the hospital.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by a former Los Alamos County, New Mexico Indigent Healthcare Administrator.  The whistleblower will receive an award of $2.25 million from the proceeds of the government's recovery. DOJ

November 15th, 2017

New York announced the sentencings of Kenneth Cohn, Sharon Cohn, and Yellow Medi-Van and Taxi, Inc., for stealing hundreds of thousands of dollars in Medicaid funds and knowingly operating transportation services without Worker’s Compensation insurance. At sentencing in Broome County Court, the Cohns forfeited and released $455,604 currently being withheld by the New York State Department of Health, to the Attorney General’s Medicaid Fraud Control Unit. Each defendant also agreed to pay $50,000 in restitution, for a total of $100,000. Kenneth Cohn was sentenced to five years’ probation, and Sharon Cohn was sentenced to one year conditional discharge. Yellow Medi-Van and Taxi, Inc. was sentenced to three years conditional discharge. NY

October 16, 2017

Louisiana announced the arrests of three New Orleans women as a result of an investigation exposing over $2 million in Medicaid Fraud. Lanice Stamps, 44 of New Orleans and owner of A New Direction Support Services, was arrested on 10 counts of Medicaid fraud for allegedly providing false and fraudulent claims for behavioral health services not rendered. Many recipients were fraudulently diagnosed as moderately mentally retarded or severely autistic so that the claims submitted could be billed at a higher level and they had never received counseling services. LA