Medical Billing Fraud

November 6, 2015

Valery Bogomolny, owner of Royal Medical Supply, was convicted for his role in a $4 million Medicare fraud scheme.  According to evidence presented at trial, Bogomolny used his company to bill Medicare for power wheelchairs, back braces and knee braces that were medically unnecessary, not provided to beneficiaries or both.  The evidence further showed Bogomolny created false documentation to support his false billing claims, including creating fake reports of home assessments that never occurred.  DOJ

November 6, 2015

Roger Rousseau, former medical director of defunct health provider Health Care Solutions Network Inc. (HCSN) was sentenced to 192 months in prison for his role in a scheme to fraudulently bill Medicare and Florida Medicaid more than $63 million.  Also sentenced to prison for their role in the scheme were therapists Liliana Marks for 72 months and Doris Crabtree and Angela Salafia, each for 60 months.  According to evidence presented at trial, HCSN purported to provide intensive mental health services to Medicare and Medicaid beneficiaries but these services were not medically necessary and were often never even provided.  HCSN also paid kickbacks to assisted living facility owners and operators who in exchange referred beneficiaries to HCSN.  In support of this scheme, Rousseau routinely signed what he knew to be fabricated and altered medical records.  And Crabtree, Salafia and Marks fabricated HCSN medical records to support the fraudulent claims.  In total, HCSN submitted roughly $63.7 million in false and fraudulent claims to Medicare.  DOJ

October 30, 2015

The Department of Justice reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices implanted in Medicare patients in violation of Medicare coverage requirements.  The devices, called implantable cardioverter defibrillators (ICDs), are electronic devices implanted near and connected to the heart to detect and treat chaotic, extremely fast, life-threatening heart rhythms, called fibrillations, by delivering a shock to the heart, restoring the heart’s normal rhythm.  Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare.  According to the government, from 2003 to 2010 each of the settling hospitals implanted ICDs during periods prohibited by the Medicare’s National Coverage Determination.  Most of the settlements originated from allegations first raised in a whistleblower lawsuit brought under the qui tam provisions of the False Claims Act by Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a health care reimbursement consultant.  They have so far received a combined whistleblower award of more than $38 million from the settlements.  The Department of Justice is continuing to investigate additional hospitals and health systems.  DOJ

October 29, 2015

Warner Chilcott US Sales LLC, a subsidiary of pharmaceutical manufacturer Warner Chilcott PLC, agreed to plead guilty to a felony charge of health care fraud as part of a global settlement in which Warner Chilcott agreed to pay $125 million to resolve its criminal and civil liability arising from illegally marketing the drugs Actonel, Asacol, Atelvia, Doryx, Enablex, Estrace and Loestrin in violation of the False Claims Act and Anti-Kickback Statute.  Specifically, the government charged that between 2009 and 2013, Warner Chilcott paid physicians to induce them to prescribe Warner Chilcott drugs.  The government also alleged that Warner Chilcott employees submitted false or misleading prior authorization requests and other coverage requests to federal health care programs for the osteoporosis medications Atelvia and Actonel.  The government further claimed that Warner Chilcott employees were instructed by members of the company’s management team to make unsubstantiated superiority claims when marketing the drug Actonel.  The allegations first arose in a whistleblower lawsuit by two former Warner Chilcott sales representatives filed under the qui tam provisions of the False Claims Act.  The whistleblowers will receive a whistleblower award of approximately $22.9 million from the federal share of the civil recovery.  Whistleblower Insider

October 26, 2015

Valentina Kovalienko, the owner of two Brooklyn medical clinics, pleaded guilty to, and agreed to forfeit almost $30 million for, her role in a $55 million health care fraud and money laundering conspiracy.  According to her admissions, from approximately February 2008 to February 2011, Kovalienko and others executed a scheme in which patients were paid cash kickbacks to subject themselves to medically unnecessary physical and occupational therapy, diagnostic tests and office visits that were not performed by licensed professionals, and for which the clinics billed Medicare and Medicaid.  Kovalienko also admitted that to support the fraudulent claims she paid occupational and physical therapists to falsify patient charts and billing records.  DOJ

October 15, 2015

Shreveport, Louisiana community mental health center Westwood Mental Health LLC, and its parent company MedSouth LLC, agreed to pay $3.5 million to settle False Claims Act and Anti-Kickback Statute allegations that Westwood falsified patient records, billed for services not medically necessary, billed for services that were not rendered, provided bribes to Medicare beneficiaries who did not qualify for partial hospitalization services and provided bribes and/or kickbacks to employees to further or conceal the fraud.  DOJ (WDLA)

October 8, 2015

Evelio Fernandez Penaranda, owner of Miami-based Naranja Pharmacy Inc., was sentenced to 46 months in prison and to pay $1,876,241 in restitution for his role in the submission of more than $1.8 million in fraudulent claims to Medicare.  According to his guilty plea, Naranja Pharmacy submitted fraudulent claims to Medicare for prescription drugs not prescribed by physicians, not medically necessary and not provided to Medicare beneficiaries. DOJ

October 7, 2015

Phoenix-based Serenity Hospice and Palliative Care agreed to pay $2.2 million to resolve allegations it violated the False Claims Act by submitting false bills to Medicare for hospice services.  In addition, Ruth Siegel, a former nurse and the founder and former president of Serenity, agreed to be excluded from Medicare, Medicaid, and all other federal health care programs for five years.  The allegations originated in a whistleblower lawsuit filed by Cheryl Sifford under the qui tam provisions of the False Claims Act.  She will receive a yet-to-be-determined whistleblower award from the government’s recovery.  DOJ (AZ)

October 2, 2015

Guardian Hospice of Georgia LLC, Guardian Home Care Holdings Inc.and AccentCare Inc. agreed to pay $3 million to resolve allegations they knowingly submitted false claims to Medicare for hospice patients who were not terminally ill.  The allegations originated in a whistleblower lawsuit filed by former Guardian employees Rose Betts and Jennifer Williams under the qui tam provisions of the False Claims Act.  Ms. Betts and Ms. Williams will receive a whistleblower award of approximately $510,000.  DOJ

October 1, 2015

Nurses’ Registry and Home Health Corporation and the Estate of its former owner, the deceased Lennie House, agreed to pay $16 million to resolve allegations that Nurses’ Registry, at the direction of Lennie House, violated the False Claims Act by fraudulently billing Medicare for medically unnecessary home health services and for services tainted by kickbacks provided by the company and House to local physicians and others who referred patients to Nurses’ Registry.  According to the government, Nurses’ Registry falsified medical records to make it appear as if patients had a medical need for skilled nursing or therapy services, or appear as if the patients were homebound.  In addition to billing Medicare for unnecessary or non-reimbursable home health services, Nurses’ Registry and House provided tickets to athletic events and concerts, and provided other things of value, to doctors and referral sources in order to induce or reward patient referrals.  The allegations originated in a whistleblower lawsuit filed by former employees Alisia Robinson-Hill and David Price under thequi tam provisions of the False Claims Act.  They will receive a yet-to-be-determined whistleblower award from the settlement proceeds.  DOJ (KY)