Thursday, April 30, 2009

Operator Of Transportation Services Company Convicted Of Medicaid Fraud And Sentenced In Indiana

On April 22, 2009, Dennis Lennartz was sentenced to 43 months imprisonment today by U.S. District Judge William T. Lawrence in the Southern District of Indiana following his guilty plea to Medicaid fraud.

The plea agreement stipulated that from August of 2006 through December of 2008, Mr. Lennartz submitted false and misleading representations regarding transportation services he or his agents had purportedly provided to Medicaid patients of approximately $964,852.59. The investigation of Lennartz revealed a variety of ways in which there was false billing:

■ Mr. Lennartz was billing Medicaid for transporting patients receiving radiation treatments claiming that the distance was 300 miles per trip when, in fact, the trip was 31 miles.
■ Mr. Lennartz also billed Medicaid for transporting a patient for rehabilitation claiming the distance was 220 miles when, in fact, it was only 33 miles.

■ Another Medicaid recipient Lennartz transported to Riley Hospital once a month resulted in Medicaid being billed for mileage claims 42 times in a period of three months.

Indiana Medicaid pays for the transportation services of its beneficiaries to and from Medicaid covered services. Transportation providers who bill for services to Indiana Medicaid must first undergo an enrollment process, agree to abide by the program's rules and regulations, and then become approved providers. These approved providers receive provider manuals which detail the Indiana Medicaid Program's rules and regulations as well as provide instruction on how to appropriately bill for services. These providers also receive periodic regulation "bulletins" from the Indiana Medicaid Program which are designed to remind providers of existing regulations or inform them of any changes.

Non-emergency transportation services are generally billed as either a Commercial / Common Ambulatory Service (CAS) or as a Non-Ambulatory Service (NAS). Indiana Medicaid regulations state that CAS services are to be billed when beneficiaries are ambulatory. That is, they are able to walk. This service is billed under a particular procedure code and providers are paid $10.00 for each one-way transport. However, in addition to billing this code, CAS providers can bill separately for mileage, as well as waiting time, and receive additional reimbursement. Mileage is reimbursed based on the amount of "loaded miles" which are the miles driven when the patient is in the transportation vehicle.

Attorney Comment: First, the sentence in this case is high for a plea agreement because Mr. Lennartz has a prior federal felony conviction (after jury trial upheld on appeal) for Medicaid fraud involving transportation services. See U.S. v. Lennartz, 948 F. 2d 363 (7th Cir. 1991). For those with prior health care fraud convictions who continue to work in the health care business, they will be ripe targets for subsequent prosecutions where there are fraud investigations.

Second, Mr. Lennartz allegedly provided these services under another entity's provider number. This may have been due to the fact that he would not have been approved as a provider due to his prior criminal conviction.

Third, the enrollment process (including the agreement to know and understand the rules), provider manuals and provider bulletins are used to help establish guilty knowledge and establish inferences of deliberate ignorance.

Any questions or comments should be directed to: Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings, with a specialty in health care providers including those accused of Medicaid, Medicare, Medi-Cal and health care fraud.


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