Medicaid

June 1, 2016

Florence Bikundi and her husband Michael D. Bikundi Sr., owners of home care agency Global Healthcare Inc., were sentenced to prison for 10 years and 7 years, respectively, for health care fraud, money laundering, and other charges stemming from a scheme in which they and others defrauded the District of Columbia Medicaid program of over $80 million.  They were also ordered to forfeit over $11 million seized from 76 bank accounts; their $1 million residence; $73,000 in cash seized from their residence and five luxury vehicles.  The court also imposed a forfeiture money judgment of roughly $40 million and ordered them to pay roughly $80 million in restitution to D.C. Medicaid.  The government’s evidence showed the Bikundis led a scheme to bill Medicaid for services that were not fully provided, recruiting others, including family members, into the scam and creating fraudulent paperwork to hide the illegal activity.  DOJ

May 26, 2016

New York announced that it has entered into a settlement agreement with Vascuscript, Inc., d/b/a Mobile Pharmacy Solutions, to resolve allegations that it billed Medicaid for prescriptions which were written by an excluded Medicaid Provider. The Attorney General’s investigation determined that from April 21, 2010, through January 25, 2013, Vascuscript, Inc. submitted and received payment on approximately 4,600 claims to Medicaid for prescriptions that were written by Dr. Mikhail Strutsovskiy. The Department of Health had previously excluded Dr. Strutsovskiy from the Medicaid program, rendering prescriptions written by him ineligible for Medicaid reimbursement. Before filling a prescription, pharmacies are required under Medicaid billing rules to first ascertain whether the prescriber’s services are eligible for reimbursement. Because Vascuscript did not do so, it filled and delivered the prescriptions written by Dr. Strutsovskiy that were not eligible for Medicaid reimbursement. NY

May 13, 2016

A Somerville-based ambulance services provider has been sued for allegedly overbilling the state’s Medicaid program (MassHealth) for more than $600,000 in ambulance services that reflected a higher level of care than was actually provided. The complaint against Cataldo Ambulance Service, Inc. (Cataldo), filed on Thursday in Suffolk Superior Court, alleges that from 2005 to November 2015, Cataldo billed MassHealth for Emergency Advanced Life Support (ALS) services when, in fact, the patient’s condition at the scene only required, and the patient only received, Emergency Basic Life Support (BLS) services. Cataldo provides a variety of transportation services, including emergency ambulance services, throughout the Greater Boston area. According to the complaint, Cataldo’s inappropriate billing practices persisted despite being notified that, in many instances, the patient’s condition and the services rendered were insufficient to justify billing at an ALS level. MA

April 27, 2016

Pharmaceutical giants Wyeth and Pfizer, Inc. agreed to pay $784.6 million to resolve allegations that Wyeth violated the False Claims Act by reporting to the government false prices on two of its proton pump inhibitor (PPI) drugs, Protonix Oral and Protonix IV.  Under the state Medicaid programs, drug companies must provide Medicaid rebates based on the best prices they offer other customers.  According to the government, Wyeth hid from Medicaid bundled discounts it provided to thousands of hospitals across the country on Protonix Oral and Protonix IV.  By failing to report these bundled discounts, Wyeth allegedly avoided paying hundreds of millions of dollars in rebates.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Lauren Kieff, a former hospital sales representative for AstraZeneca and William St. John LaCorte, a physician practicing in New Orleans.  They will collectively receive a whistleblower award of roughly $98 million from the proceeds of the federal and state settlements.  Whistleblower Insider

April 14, 2016

Boston Medical Center (BMC) and two of its physician practice organizations agreed to pay $1.1 million to resolve allegations they violated the False Claims Act by improperly billing Medicare and Medicaid.  Specifically, the government charged that (1) BMC billed Medicare for more units of Rituxan, an expensive cancer drug, than BMC actually infused in its patients; (2) BMC billed Medicare and Medicaid for services at its pre-surgical treatment center even though the global fee for the subsequent surgeries covered those same treatments; and (3) BMC submitted claims to Medicare for outpatient podiatry services where the clinical documentation did not support the reasonableness and necessity of the services.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by BMC’s former Chief Compliance Officer, Kathleen Heffernan.  She will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery.  DOJ (DMA)

April 27, 2016

Michigan and 34 other states reached an agreement in principle to settle allegations against Wyeth, a subsidiary of Pfizer, Inc. The settlement will resolve allegations that Wyeth knowingly underpaid rebates owed under the Medicaid Drug Rebate Program for the sales, Protonix Oral and Protonix IV between 2001 and 2006. Both are drugs that are used to treat conditions such as acid reflux. Under the settlement Wyeth agreed to pay $784.6 million to the United States and the States. Over $371 million of this amount will go to the Medicaid Program. The settlement stems from two whistleblower lawsuits which were filed in the United States District Court for the District of Massachusetts. The United States, 35 states (including Michigan) and the District of Columbia intervened in the lawsuits. NY, NJ, MI, WA

March 29, 2016

New York announced the guilty pleas of licensed pharmacist Glenn Schabel, 55, of Melville, and his company, Glenn Schabel, Inc. in connection with a nation-wide scheme to sell diverted HIV medication to unsuspecting New Yorkers. Schabel pled guilty to Criminal Diversion of Prescription Medications and Prescriptions in the First Degree, and Commercial Bribe Receiving in the First Degree. Schabel will be sentenced to up to two and one-third to seven years state prison and forfeit $5,456,267 to the New York State Medicaid Program. Glenn Schabel Inc., pled guilty to Money Laundering in the First Degree. In April 2012, MFCU investigators arrested Schabel and three other individuals and charged ten companies, for using a network of bogus prescription medication wholesalers in Alabama, Mississippi, North Carolina, and California to launder money and to sell over $274 million in diverted prescription medications. NY

March 8, 2016

A Connecticut psychiatrist will pay $404,798 to settle a civil False Claims Act lawsuit alleging that she submitted false claims for payments to Connecticut’s Medicaid program. The state alleged that, from March 2010 to September 2013, while operating a private practice in Mansfield, Dr. Panoor submitted upcoded claims indicating that she provided Medicaid patients with both group counseling and either individual psychotherapy or a detailed examination on the same dates of service when, in fact, she did not provide psychotherapy or detailed examination sessions but instead provided medication management services or a brief meeting with the patient for the purpose of monitoring or changing a patient’s drug prescription – services that are coded, and thus reimbursed, at lower payment rates.

February 12, 2016

New Jersey Doctor Labib E. Riachi and two companies he owns, Riachi, Inc. and Center for Advanced Pelvic Surgery, agreed to pay $5.25 million to resolve allegations they violated the False Claims Act by billing Medicare and Medicaid for anorectal manometry and electromyography diagnostic tests, even though most of the tests were never performed.  The settlement also resolves charges that they submitted claims to Medicare for physical therapy services that should not have been paid because they were not performed by a qualified therapist.  DOJ (NJ)