Medicaid

August 5, 2016

A series of anesthesia businesses collectively known as Sweet Dreams Nurse Anesthesia agreed to pay roughly $1 million to settle charges they violated the False Claims Act, Anti-Kickback Statute and Georgia False Medicaid Claims Act by paying unlawful kickbacks to health care providers for referrals.  According to the government, one alleged scheme involved Sweet Dreams’ provision of free anesthesia drugs to ambulatory surgery centers (ASCs) in exchange for granting Sweet Dreams an exclusive contract to provide anesthesia services at those ASCs.  A second alleged scheme allegedly involved the agreement of an affiliate of Sweet Dreams to fund the construction of an ASC in exchange for contracts for Sweet Dreams’ selection as the exclusive anesthesia provider.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Adam Nauss.  He will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery.  DOJ (MDGA)

August 1, 2016

St. Joseph’s Hospital Health Center agreed to pay $3.2 million to resolve allegations it violated the federal False Claims Act and New York False Claims Act by billing the state Medicaid program for mental health services provided by unqualified staff.  Specifically, the government alleged that St. Joseph's billed Medicaid for mobile-crisis outreach services that failed to comply with Comprehensive Psychiatric Emergency Program (CPEP) staffing requirements.  The allegations originated in a whistleblower lawsuit filed by registered nurse Catherine Lembo under the qui tam provisions of the federal and New York False Claims Acts.  Ms. Lembo will receive a whistleblower award of $560,000 from the proceeds of the government’s recovery.  Whistleblower Insider

August 1, 2016

New York and the Justice Department announced that St. Joseph’s Hospital Health Center (St. Joseph’s) will pay $3.2 million to resolve allegations that it violated the federal and New York False Claims Act by presenting false claims for payment to the state Medicaid program for mental health services rendered by unqualified staff. settlements resolve allegations that St. Joseph’s knowingly presented false claims for payment to Medicaid for mobile-crisis outreach services rendered from January 1, 2007 through February 29, 2016 by personnel who failed to satisfy the basic CPEP staffing requirements. By submitting claims for payment to Medicaid without disclosing that its CPEP staff failed to meet the regulatory staffing requirements, and by accepting payment for these claims, the governments allege that St. Joseph’s misrepresented its compliance with mental health staffing requirements that are central to the provision of counseling services and, by doing so, violated the False Claims Act. As part of the settlements, St. Joseph’s admits that it was improper to have conducted mobile crisis outreach visits without a member of its CPEP professional staff present and then bill Medicaid for such services. NY

July 29, 2016

A judgment for $4,752,101.50 was entered against LXE Counseling, LLC and its owner Lexie Darlene George (a/k/a Lexie Darlene Batchelor) for violations of the False Claims Act, the Oklahoma Medicaid False Claims Act and the Oklahoma Medicaid Program Integrity Act.  Specifically, LXE and Batchelor were found to have submitted claims to Oklahoma Medicaid for services that were, among other things: provided by unqualified persons; based on falsified time and service records; double billed; unauthorized or not provided.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery.  DOJ (WDOK)

July 25, 2016

Florida announced the arrests of three individuals for operating a $1 billion Medicare and Medicaid fraud scheme involving numerous Miami-based health care providers. Attorney General Bondi’s MFCU, as part of the HEAT Strike Force, assisted in identifying more than $100 million of Medicaid fraud in connection to this scheme. According to the indictment, Philip Esformes, 47, operated a network of more than 30 skilled nursing homes and assisted living facilities that gave access to thousands of Medicare and Medicaid beneficiaries. Many of these beneficiaries did not qualify for skilled nursing home care or for placement in an assisted living facility. However, Esformes and co-conspirators admitted the beneficiaries to Esformes Network facilities, and received medically unnecessary services billed to Medicare and Medicaid. The defendants also allegedly received kickbacks by steering the beneficiaries to other health care providers, including community mental health centers and home health care providers, who also performed medically unnecessary treatments billed to Medicare and Medicaid. In order to hide the kickbacks from law enforcement, the kickbacks were often paid in cash, or were disguised as payments to charitable donations, payments for services and sham lease payments. FL

June 27, 2016

Ten North Texas companies and individuals agreed to pay $1.125 million to resolve charges they violated the False Claims Act for failing to comply with rules and regulations governing Medicaid transportation services.  The companies include: Irving Holdings, Inc. (together with its predecessor companies Big Tex Taxi Corporation, Terminal Taxi Corporation, Choice Cab, Inc., Yellow Checker Cab of Dallas, Inc., and Yellow Checker Cab of Fort Worth, Inc.); JetTaxi, Inc.; Dallas Taxi, LLC; US Cab, LLC; Terminal Taxi Corporation of Irving; Classic Shuttle Acquisition Corporation, Inc.; and Dallas Car Leasing, LLC.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Robert Spence, Mike Jones, and Cheryl Jones.  They were employees of Irving Holdings, one of the largest taxicab companies in the US.  They will receive a whistleblower award of $202,500 from the proceeds of the government's recovery.  DOJ (EDTX)

July 7, 2016

A Bedford-based transportation service provider has agreed to pay more than $700,000 to resolve allegations that it submitted false claims to the state’s Medicaid program (MassHealth) for medically unnecessary wheelchair van rides, Massachusetts announced. It also allegedly submitted claims for services that should have been provided at a lower cost through a MassHealth transportation broker. The AG’s investigation revealed that REM Transportation Services, LLC (REM) submitted the false claims from January 5, 2010 to December 31, 2014. Many of the MassHealth members allegedly receiving the rides were ambulatory and did not use wheelchairs or need assistance, as required under MassHealth regulations. MA

June 24, 2016

Florida arrested two Panama City mental health counselors for allegedly defrauding the Florida Medicaid program out of more than $360,000. The investigation revealed that Laurie Lynne Kidd, 54, who has a doctorate in psychology, hired Courtney Ann Hill, 27, to provide individual and group therapy to assisted living facilities. Hill is an unlicensed and unqualified employee and allegedly submitted false reports claiming that Hill provided therapy to the residents, when, in fact the defendant did not. Kidd billed Medicaid for the services never rendered as if Kidd herself performed the services. Kidd allegedly submitted more than $400,000 in fraudulent claims and received more than $360,000 from the Florida Medicaid program due to the fraudulent claims. Hill is allegedly responsible for $99,000 of Kidd’s fraudulent claims. FL

June 22, 2016

New York announced a $28 million settlement of a civil lawsuit that claimed the owners of Medford Multicare Center for Living, Inc. (“Medford”) located in Medford, New York looted the corporation and committed fraud and illegality in operating a business. The civil lawsuits claims were based on a history of criminal conduct by employees of the nursing home, staffing and service cuts and diversion of Medicaid funds to themselves and their controlled entities. The assurance of discontinuance provides that the settlement funds, which will be administered by an Independent Financial Monitor, will in part be used to establish a “Resident Care Fund” to fund care recommendations by the Independent Operator. That fund will provide the much needed reforms and improvements in the delivery of care and services to Medford’s elderly and frail residents. In addition, ten million dollars will be returned to the Medicaid program. The Medford corporation was also sentenced for its role in the cover-up of a patient death in 2012.‎ NY

June 20, 2016

New York announced the arrest of Joseph Wright, 52, of Middletown NY, for allegedly stealing over $5 million dollars from Medicaid. Prosecutors allege that Wright, as owner of a purportedly not-for-profit organization “Assistance By Improv II, Inc.” (ABI), located at 953 Southern Boulevard in the Bronx, lured thousands of low-income New Yorkers to ABI with the promise of affordable housing, arranged to have them subjected to unnecessary medical tests and then filed false claims for reimbursement with the State Medicaid program. Prosecutors alleged in papers filed in court that Wright unlawfully owns and operates ABI as a medical mill that masquerades as a charitable housing organization. Prosecutors allege that Wright ignored ABI’s professed charitable mission and duped potential clients, most of whom were Medicaid recipients, into surrendering their personal health care information and undergoing purported medical screening to qualify for housing. NY