Friday, December 2, 2016

Ohio Psychiatrist Sentenced to Prison for Tax Evasion in Filing False Tax Returns. Lesson: Do Not Wait Till Things Go This Far - Get Help

On November 21, 2016 an Oregon, Ohio psychiatrist was sentenced to serve 18 months in prison in the U.S. District Court for the Northern District of Ohio for tax evasion. 

According to court records, from as early as 2005, Dr. Sandra Vonderembse failed to pay taxes and filed and caused to be filed with the Internal Revenue Service (IRS) false and fraudulent tax returns that included false statements regarding her income and the amount of tax due and owing. 

Why did this case go criminal? It is the false statements that get the "tax evasion" count rather than the lesser non-fraud offense of "subscribing false tax returns."  Additionally, from 2009 through 2011, Dr. Vonderembse falsely claimed to have no taxable income and to owe no taxes, despite earning more than $240,000 each year while working as a psychiatrist. It is due to Dr. Vonderembse allegedly using nominee entities to conceal income from the IRS, and sending fake financial instruments to the IRS in purported payment of her taxes.  

Wednesday, November 30, 2016

New Jersey OB/GYN Settles Civil Allegations on Pelvic Floor Therapy Claims, Pays $5.25 Million and Agrees to 20-Year OIG Exclusion

On November 15, 2016, a New Jersey OB/GYN, Labib Riachi, agreed to be excluded from participation in Federal health care programs, including Medicare and Medicaid, for 20 years to settle allegations by the U.S. Department of Health and Human Services, Office of Inspector General (OIG), that Dr. Riachi submitted thousands of claims for Pelvic Floor Therapy (PFT) to Medicare and Medicaid for services that were either never provided or were otherwise false or fraudulent. 

Dr. Riachi's exclusion follows a Qui Tam or False Claims Act (FCA) settlement agreement with the U.S. Attorney's Office for the District of New Jersey for false billing. On February 12, 2016, Dr. Riachi agreed to resolve his FCA liability for $5.25 million. In resolving this matter through settlement, Dr. Riachi has denied any liability.

Sunday, November 27, 2016

California Occupational Therapist Pleads Guilty to Medicare Fraud Conspiracy. Case Lesson: Danger of Medical Providers Working With Management Companies

On October 24, 2016, a licensed occupational therapist Keith Canlapan pleaded guilty in Los Angeles for his role in a $2.6 million Medicare fraud scheme that involved billing for occupational therapy services that were not provided. The plea was to one count of conspiracy to commit health care fraud before U.S. District Judge George H. Wu of the Central District of California.  Sentencing is scheduled for Feb. 16, 2017, before Judge Wu. 

As part of his guilty plea, Mr. Canlapan admitted that he was a licensed occupational therapist employed with JH Physical Therapy, an occupational therapy clinic located in Walnut, California.  Mr. Canlapan further admitted that through JH Physical Therapy, he billed Medicare for occupational therapy services when no such services were provided to the Medicare beneficiaries.  Instead, the Medicare beneficiaries received massage and acupuncture services, which are not reimbursable under Medicare rules, he admitted.  In fact, on dates that Mr. Canlapan purportedly provided occupational services to Medicare beneficiaries at JH Physical Therapy, Canlapan was admittedly not present at JH Physical and instead was either out of the country or at his other places of employment on some of those dates. 

Between approximately October 2009 and approximately December 2012, Mr. Canlapan, through JH Physical Therapy, admitted in his plea that he billed Medicare $2,669,618 in false and fraudulent claims, of which Medicare paid $1,860,786.

Mr. Canlapan was charged in an indictment returned on June 16, 2016, along with co-defendants Simon Hong, 54, and Grace Hong, 50, husband and wife, both of Brea, California.  Simon Hong is the owner and Grace Hong is the co-operator of JH Physical Therapy, and they are charged with one count of conspiracy to commit health care fraud and three counts of health care fraud.  Both are pending trial, which is scheduled for Jan. 17, 2017.  An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Attorney Commentary on Management Companies and Patients' Requests for Therapy:

This case is a lesson on what happens when a licensed health care worker goes to work for a management company which helps the occupational therapist (in this case) obtain a Medicare provider number and then does the billing and essentially runs the practice.

Saturday, November 26, 2016

California Man Who Refinanced Hotel Property Convicted Of Wire Fraud and Misstatements to a Bank in Federal Jury Trial

In the legal community, many of us expected white collar prosecutions for bank financing and mortgage fraud, including cases against lenders to be on the rise. There have not been as many cases as expected. The cases still seem to be against individuals who gave false information to get a loan. While some call these "liar's loans" - most frequently they are not prosecuted unless the borrower was not able to make the loan payments. A recent case involving hotel refinancing and construction loans show what kind of bank misstatement and loan fraud cases go criminal. In the cases we have worked on, the banks put together a large package of material to make it easy for the prosecutors to work up the case.

On November 9, 2016, after a 12 day trial, a federal jury convicted Sanjiv Kakkar of wire fraud and making misstatements to a bank. The government presented evidence at trial that Mr. Kakkar presented false information to a bank in connection with refinancing a hotel property he owned in Boulder Creek, Calif. There were three basic categories of misstatements or fraud: (1) falsifying income information and tax returns where income was overstated; (2) failure to provide updated financial and tax records; and (3) submitting false information to an escrow company to get reimbursement for construction costs.  

Friday, November 25, 2016

WakeMed Pays Penalties for Non-Employed Medical Director Fees. Learn From Their Experience.

Smaller hospitals and surgery centers often use medical director fees. One concern is that there is often not a great deal of effort into determining whether these medical director fees violate the bans on physician self referrals. Each case is different, howver, one case to review is a recent one involving WakeMed Health and Hospitals in North Carolina. OIG alleged that WakeMed paid remuneration to one non-employed medical director in the form of medical director fees.

After WakeMed disclosed conduct to OIG pursuant to its Corporate Integrity Agreement about payment of medical director fees, it agreed on October 26, 2016, to pay $146,235.38 for allegedly violating the Civil Monetary Penalties Law provisions applicable to physician self-referrals and kickbacks. 

Before your facility considers whether it should pay a directorship fee or whether as a physician or provider you should receive one, ensure that you have obtained a true legal opinion as to why that payment meets the safe harbor and is within federal and state laws and regulations.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Office: 213-233-2261

Thursday, November 24, 2016

CleanSlate Addiction Treatment Centers Settle Qui Tam Allegations of Prescribing of Suboxone by Nurse Practitioners and Physician Assistants Without Proper Physician Supervision and Improper Billing

The addiction industry is facing a great deal of scrutiny at every level. The laws and regulations are changing and compliance is lagging behind. Noble efforts to get patients treated quickly for substance abuse due to the growing opioid abuse epidemic will cause problems if the federal and state laws are not followed carefully especially where Suboxone and other scheduled drugs are involved (due to potential for misuse and diversion). Further, where there is Medicare/Medicaid or insurance billing involved issues of medical necessity, proper billing and proper medical supervision is key.

Treatment centers need to be mindful that federal rules and regulations regarding prescribing and billing must be followed carefully. A recent qui tam case addresses the prescribing of Buprenorphine (Suboxone), a Schedule III controlled substance that also can be used to treat pain, by mid-level practitioners and what happens when federal law changes but state regulations are not adopted. Providers must follow state and federal laws and regulations.  

How did this qui tam case come about? Until recently, only a physician could prescribe buprenorphine for addiction treatment. Congress modified the law in July 2016, allowing nurse practitioners and physician assistants to prescribe buprenorphine for addiction treatment, provided they meet certain training and state-law licensing requirements.  In Massachusetts, those requirements have not yet been established.

A recent case shows the legal issues. On November 22, 2016, the U.S. Attorney’s Office in Boston reached a $750,000 civil settlement yesterday with CleanSlate Centers, Inc. and Total Wellness Centers, LLC d/b/a CleanSlate. This civil settlement resolved allegations that the two companies, which together operate opioid addiction treatment centers in Massachusetts and other states, improperly prescribed buprenorphine (Suboxone®) for opioid addiction treatment and improperly billed Medicare.


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