Bakersfield Veteran Sentenced For Defrauding VA To Obtain Disability Benefits

Recently, there was a sentencing in an unusual disability benefits fraud case in Fresno, California. This case involved a former veteran, Roger Keith Remy of Bakersfield, who was convicted of altering medical records to obtain VA benefits by making it seem as if it was a service connected disability. As pensions become rarer and retirement savings are not enough for people to retire, I believe there will be an increase in prosecutions for persons who falsify information or documents in order to obtain disability benefits.

The evidence introduced at trial showed that Mr. Remy was a veteran who left the military in 1973. In 2002, he allegedly devised a scheme to get VA benefits for what he claimed was a service connected disability. To support this claim, he obtained medical records from Queens Medical Center in Hawaii relating to admissions he had to this facility in 1974 and 1975 for a tonsillectomy and circumcision. He allegedly altered the documents to make it appear he had been treated for a heart attack earlier in the year, when a heart attack would still be considered to have occurred during his time in the U.S. Army. He then made a photocopy of the medical records to hide the alteration, and submitted them to the Department of Veterans Affairs.

Mr. Remy's initial claim for benefits was granted, and he subsequently received over $200,000 in benefits. The plot thickened, however, in January 2005 when Mr. Remy asked for his benefits to be made retroactive to 1974. He supported his claim for retroactive benefits by resubmitting the same altered medical records. The altered records were discovered when the Veteran’s Administration noticed the documents looked a little odd, and they obtained copies of the real medical records directly from Queens Medical Center in Hawaii. The 2005 claim was thereafter denied. Had the claim been successful, he would have been entitled to receive retroactive benefits of over $570,581.

After a jury trial in the federal court in the Eastern District of California, Mr. Remy was found guilty on February 26, 2009 of three counts of submitting false documents and three counts of submitting false claims to the Department of Veterans Affairs.

On September 8, 2009, Roger Keith Remy of Bakersfield, was sentenced by United States District Judge Oliver Wanger to two years in prison. He was also ordered to pay $220,618 in restitution to the Department of Veterans Affairs. Judge Wanger, in sentencing Mr. Remy, said that he had not accepted responsibility for his crime, and that the magnitude and intent of the scheme required a prison sentence of 24 months.

Attorney Commentary: First, the sentence was lengthy in this case because the judge found that Mr. Remy had "not accepted responsibility for his crime" and this arises often after a defendant has exercised his right to go to trial. If there is a conviction after trial where a plea agreement was offered with a much lower sentence, there is essentially a "tax" for exercising one's constitutional right to have a jury trial.

If a defendant testifies at trial and is later convicted, there is a risk that in federal cases there will be an increase in the sentence based on "obstruction of justice" since the jury has found that they did not believe the defendant's testimony. In state cases, the defendant's testimony at trials can affect the judge's sentence depending on the credibility of the testimony.

Second, as noted above, the temptation for individuals to falsify information or documents in order to obtain disability benefits is strong especially when 401ks and retirement funds have lost much of their value and the old-fashioned pension is not available to most workers.

Third, when we see individuals making false statements or submitting false documents to insurance companies and governmental agencies it has not often been well thought out. It is often rationalized by the individual for various reasons (they have been paying for disability insurance for years, they are entitled to benefits, insurance companies are large, they have paid for insurance for years and never made claims, and the false representations will not adversely affect the company or government, etc.).

The conduct was usually not intended to be a "scheme to defraud" in their mind. This may be denial but we often find it to be true. It was usually never been considered what would happen if the false representations were ever discovered. Usually, they think that all they need to do is to repay the amount and there will not be criminal prosecution. Sometimes this is the case but there is now a higher risk of prosecution. The tolerance for "fraud" in this post-Enron/Madoff world where our economy has been crippled and governments are in deep debt has waned.

Fourth, if our clients are the subject of such investigations, we do our best to fully evaluate the case and the risks of prosecution at an early stage. If there is the opportunity to settle civilly, we pursue that angle and realize that there may not be much room to negotiate if it is not successful. Moreover, although civil settlement agreements cannot promise "no prosecution," often confidentiality clauses can help ensure that there will be no communications with prosecuting agencies.

Other times, we will advise the client to cease the conduct so that the statute of limitations will begin to run. The statute of limitations in fraud cases is lengthy and this is a waiting game. In Mr. Remy's case if he had not continued his conduct in 2005, he would not have been discovered or charged.

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green & Associates in Los Angeles, California. They focus their practice on the representation of professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have developed an expertise in health care, insurance fraud and disability insurance fraud cases over the past 20 years. The firm website is http://www.greenassoc.com/

Skilled Nursing Facility Administrator Charged Criminally For Allowing Staff To Forcibly Administer Psychotropic Drugs For "Staff's Convenience"

On February 19, 2009, I wrote about the California Attorney General’s Office filing a felony complaint and arresting a nurse, physician, and a pharmacist who worked at Kern Valley Healthcare District, a skilled nursing facility in Lake Isabella, California for “forcibly administering” psychotropic medications for their own convenience, rather than for their patients’ therapeutic interests.” That blog post can be reviewed here:

http://greenandassociates.blogspot.com/2009/02/nurse-physician-pharmicist-from-skilled.html

In a follow-up to that post, on September 8, 2009, the Attorney General's Office has filed charges against Kern Valley Hospital administrator Pamela Ott. She was not previously charged. Ms. Ott was charged on eight felony counts of elder abuse for allowing staff to forcibly administer psychotropic medications to patients for their own convenience, rather than for their patients' therapeutic interests. The government's position is that as the hospital administrator, Pamela Ott, was ultimately responsible for safeguarding the welfare of her patients. The case is pending in Kern County Superior Court.

Ms. Ott surrendered herself in court on September 8 and plead not guilty. She was released on her own recognizance on the condition that she not run a skilled nursing facility. A preliminary hearing is set for November 4, 2009.

There has been one plea in this case by Debbi Hayes, the former pharmacist at the Valley Healthcare District. On August 14, 2009, Ms. Hayes plead no contest to a felony charge of conspiracy to commit an act injurious to public health. She is a cooperating witness for the prosecution. Ms. Hayes was originally charged with elder abuse and assault with a deadly weapon.

The case is being prosecuted by the Attorney General's Bureau of Medi-Cal Fraud and Elder Abuse, with the co-operation and assistance of the Kern County District Attorney's Office.

Attorney Commentary: One troubling aspect of this case which continues to be an issue in white collar crime and health care fraud cases is the notion of vicarious liability -- holding a supervisor responsible for the acts of others. This theory can be applied to administrators, supervisors and physicians who are in a supervisory position.

For example, in this case the Attorney General has alleged that administrator Ms. Ott hired and supervised Director of Nursing Gwen Hughes who was charged in February 2009. It is also alleged that Ms. Ott was informed about the actions of Ms. Hughes when she allegedly ordered that Alzheimer's and other dementia patients be given high doses of psychotropic medications to make them more tranquil and easy to control, with two noisy or disruptive patients being held down and forcibly administered the medications. The government alleges that administrator Ott allowed this conduct to continue once she learned about it.

The skilled nursing facility is not being charged criminally since the state government prefers to prosecute individuals - especially when the businesses are not public corporations. Corporations have long been charged criminally under the theory of respondeat superior - especially in environmental crimes. Charging supervisors with criminal acts for the actions of their subordinates is becoming more common.

In our practice, we are seeing physicians, owners of health care businesses and other businesses charged with offenses because they are ultimately responsible even where there is little or no evidence that they committed any acts or even knew of the alleged wrongdoing. Part of this may be a practical tactic by the prosecutor. The lower level people may defend their actions that they are employees and did not benefit financially or were acting according to orders from above. By charging the supervisors and the ones who committed the alleged acts - there is less of an empty chair defense available and it encourages the lower level employees to plead and cooperate against the supervisor.

For example, in the past year we have defended two physicians who were charged with Medi-Cal fraud because there was billing for services not provided. The physicians were not involved in the billing, did not instruct anyone to bill for services not provided and the billing errors were either mistakes or the actions of an employee on their own. Because the physician is the one who would profit from such mistakes and received the money from the billing, the physician is an easy target. One case we got dismissed at preliminary hearing while it took over a year to get the physician dismissed from the other case. Prosecutors are becoming more aggressive in these types of cases.

For this reason, compliance plans, internal audits, employee manuals and well-established personnel policies will be more important in helping defend these types of offenses. In smaller businesses and corporations, these are often sorely lacking. Further, when there are errors or misconduct by subordinates, there is usually no record of discipline or any memoranda to indicate that these errors will not be tolerated in the future. We encourage our clients to think ahead and remember that they are regulated by the government and are subject to more intense scrutiny when they are billing the government.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal and Ann Schneider is a senior associate at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in health care cases. Their website is: http://www.greenassoc.com/

Insurance Fraud Conviction After Trial For Obtaining Health Benefits For Ex-Wife In Pomona, California

A recent case is a sign of the times: felony prosecution of a politician for applying for and obtaining health insurance for his ex-wife. The total value of the health insurance benefits was $4,000. On September 18, 2009, a jury in Pomona, California returned guilty verdicts against Xavier Alvarez, a board member of the Three Valleys Municipal Water District on counts of (1) misappropriation of public funds, (2) insurance fraud and (3) grand theft.

In 2006, Mr. Alvarez was elected by the voters of south Pomona to the Three Valleys Water District. The Three Valleys Municipal Water District provides medical insurance to its directors, their spouses, children and other dependents. Prosecutors contended that Mr. Alvarez failed to disclose that he had been divorced for five years when he applied for and received health insurance benefits for his ex-wife Juanita Ruiz from January to October 2007. The loss in health insurance premiums to the Water District was estimated at $4,000.

The case was prosecuted by the Public Integrity Division of the Los Angeles County District Attorney's Office. Mr. Alvarez was charged on September 19, 2008 and it took approximately one year for the case to go to trial. After the jury returned its guilty verdicts, Mr. Alvarez was remanded into custody even though he had been out of custody pending trial.

Attorney Commentary: First, if this had been a private company it is unlikely that there would have been a criminal prosecution. Since this was an elected position, the Public Integrity Unit became involved. When the government is dealing with "public funds" there is more of an incentive for the government to prosecute.

Second, Mr. Alvarez had other problems which probably led to this investigation. He is on federal probation for falsely claiming to be a Medal of Honor recipient which was a misdemeanor. Mr. Alvarez did not resign from the water board after pleading guilty to that misdemeanor count even though there was local pressure to do so. That prior conviction arose from a Walnut Valley Municipal Water District meeting where Mr. Alvarez said he retired after 25 years in the Marines, had been wounded many times and was awarded a Congressional Medal of Honor in 1987. He later admitted he was never in the military.

Third, as result of this recent felony conviction, Mr. Alvarez will be disqualified from holding any office in the state.

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal and Ann Schneider is a senior associate at Green & Associates in Los Angeles, California. They focus their practice on the representation of professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have developed an expertise in insurance fraud cases over the past 20 years. The firm website is http://www.greenassoc.com/

Self-Proclaimed "Natural Doctor" Charged With Treating Cancer Patients Without A License And Unauthorized Practice Of Medicine In Orange County

A recent arrest for the unauthorized practice of medicine shows the role that a newspaper article and a website can have on the government's decision to prosecute.

California law allows non-licensed persons to offer certain types of alternative treatments and not be accused of the unauthorized practice of medicine if the law is followed as set forth in California Business & Profession Code Sections 2053.5 and 2053.6. However, unlicensed persons using the term "doctor" and offering to "cure" certain diseases with nutritional supplements subject themselves to exposure to local prosecutors, the FTC and the FDA.

On September 24, 2009, Daryn Wayne Peterson, 37, was charged in Orange County Superior Court with one felony count each of the unauthorized practice of medicine, operating a health care service plan (HMO) without a license, treating cancer without a license, offering an unapproved drug for cancer treatment, and one misdemeanor count of misrepresenting himself as a licensed medical practitioner.

The genesis of the case was a newspaper article. On June 10, 2009, the Orange County Register featured Mr. Peterson in a color-picture article on the front page on the Life/Wellness section of the newspaper titled "A rejection of Western medicine with subheading, Clients swear by natural treatments, but many others doubtful." An online version of the article was headlined “‘Natural doctor’ says he can cure cancer, AIDS.”

The Register article discussed how Mr. Peterson charged his clients for listening to his approach to wellness, and how he encouraged them to drop their health insurance plans in favor of his “natural health insurance” plans, which the article said did not cover hospitalization or lab tests but did give patients a discount on vitamins and other supplements that he sold. The Register article also quoted a UC Irvine Medical Center oncologist who disputed Mr. Peterson’s assertion that cancer patients who refuse chemotherapy live longer than those who are in remission.

The day the article ran, the Orange County District Attorney’s Office (OCDA) began an investigation into the matter. In a statement, the OCDA said it was “alarmed by the potential health risks to the community and the recklessness of the article” and launched an investigation into Mr. Peterson’s practice. The OCDA's office also alleged that some of the patients featured in the Register article who spoke favorably of Mr. Peterson’s treatments were either friends or his blood relatives.

In the criminal caes, Mr. Peterson is accused of operating Natural Health Care Organization (http://www.naturalhealthcoverage.com/), a website offering “Natural Health Insurance” and claiming to provide pre-paid “subscribers” with unlimited access by email, telephone or in person to their “own Natural Doctor,” who has “success in stopping disease without drugs and surgery.” In the complaint, it is alleged that none of the purported “doctors” listed on the website are licensed to practice medicine in California. Mr. Peterson is accused of posting “testimonials” on the website, claiming to be from “patients,” asserting that Natural Health Care Organization “doctors” have cured diseases including leukemia, diabetes, crohn’s disease, prostate cancer, migraines, and restless leg syndrome.

In the course of the investigation, an undercover OCDA Investigator signed up on Peterson’s website as a potential “patient.” Mr. Peterson is accused of communicating with the “patient” online, and later meeting the “patient” at his apartment in Mira Loma, CA. After hearing that the “patient” had been diagnosed with lymphoma and was scared of the chemotherapy recommended by his doctor, Mr. Peterson is accused of telling the “patient” that he treats many cancer patients, that the chemotherapy would kill him faster than the cancer, and boasted an 88 percent success rate in treating all types of cancer, including Lymphoma. Mr. Peterson is also accused of telling the “patient” that he could “expect almost complete reversal” within one year of taking his “all-natural” vitamins and natural supplements on a daily basis. He is accused of performing a medical examination of the “patient,” including listening to his heart while asking him to breathe and looking in his eyes.

The OCDA's office also says Mr. Peterson of ran a website, www.naturalhealthcoverage.com, in which the “your doctors” section features Daryn Peterson and says he has a “Ph.D., HMD,” with a specialty of “internal medicine, natural medicine, toxicology, immunology and latrogenic diseases.” A catchphrase was listed in the website: “No Disease is Incurable.” The website was still up at the time of the arrest and did not appear to be compliant with the California Business & Profession Code.

Mr. Peterson is accused of offering patients an “insurance” plan or an HMO not licensed by the California Department of Managed Health Care or the Department of Insurance, as required by law. California law prohibits unauthorized and unlicensed businesses from offering pre-paid health services to protect consumers and patients from being defrauded. The law protects consumers from not receiving health care for which treatments were paid in advance.

One of the issues in the case is that the U.S. Food and Drug Administration (FDA) and the California Department of Health Care Services have not approved any of the supplements recommended by Mr. Peterson for the "treatment of cancer." Doctors are authorized by law to represent that they have an effective treatment for cancer only if the drug has been approved by the FDA. A medical “drug” is defined as anything approved by the FDA for treatment of a specific disease.

Attorney Comments: First, be aware that websites offer government regulators and prosecutors the opportunity to sit at their desks and investigate without ever leaving their offices. The websites offer detailed information which can help make an investigative case. This includes the FTC, FDA, the Medical Board and other regulatory agencies.

Second, there are legal ways in which alternative health care providers who are unlicensed can legally provide services to clients. However, they need to be compliant with the law and especially careful with written brochures and internet websites.

Third, criminal prosecution can devastate one's career and although the potential jail sentences are not lengthy, it can result in the closing of one's office. Practitioners who are alternative need to be compliant with rules and regulations even when it is apparent that their clients or patients understand they are not medical doctors and are not promising "cures" or "treatments" for diseases but are instead focused on preventative medicine and enhancing health.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal at Green & Associates and Ann Schneider is a senior associate at Green & Associates. They focus their practice on the representation of professionals, including alternative health care professionals. Ms. Green is on the Board of Directors of the California Naturopathic Doctors Association. Their website is: http://www.greenassoc.com/

Employee Pleads Guilty To Workers' Compensation Fraud In Ventura County After Testifying Falsely In Deposition

On September 10, 2009, Armando Landa (DOB 02/06/68) pleaded guilty to one count of felony workers' compensation fraud. The California Department of Insurance, Fraud Division, investigated the case. The facts alleged by the Ventura County District Attorney's Office were as follows. On May 4, 2007, while working at Chicago Ribs in Ventura , Mr. Landa brought a workers' compensation claim following an alleged injury to his right elbow. He received treatment for his injury and was granted leave from work. From May 25, 2007, to August 13, 2008, Mr. Landa was given tax-free, bi-weekly checks for living expenses, totaling $30,651.

On December 19, 2007, while still off work and receiving benefits, Mr. Landa obtained employment as a bus boy at Teppan's Steak House in Oxnard. At a deposition, under oath, Mr. Landa denied working anywhere since the time of his injury, despite the fact that he was working at Teppan's Steak House at the time of the deposition. Mr. Landa's conduct and false statement constituted fraud. Mr. Landa will be sentenced on October 20, 2009, at 1:30 in courtroom 12 in Ventura County Superior Court. The maximum sentence is five years in state prison although the sentence was probably determined by the plea agreement.

Attorney Commentary: The local district attorney's office are continuing to be aggressive in prosecuting workers who are not truthful in their depositions about their work-related injuries. On the one hand, workers' compensation fraud costs employers and businesses significant sums in higher premiums. On the other hand, the economy, financial pressures and the lack of health insurance are causing workers to exaggerate claims and deny working during depositions.

A felony charge can jeopardize an employee's future work opportunities. The best time to defend a workers' compensation fraud case is before charges are filed. Workers and their attorneys should be mindful of the fact that these cases are now being prosecuted and there no longer appears to be any reluctance in filing charges for small cases. The DA's Offices and the California Department of Insurance are also publicizing these cases in order to deter others from committing workers' compensation fraud.

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal and Ann Schneider is a senior associate at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have handled numerous workers' compensation fraud cases representing individuals, businesses, medical providers and attorneys. The firm website is http://www.greenassoc.com/

Pharmacy Owner Sentenced in Manhattan Federal Court to 78 Months in Prison for Medicaid Fraud

On September 23, 2009, the former owner of a Manhattan pharmacy, Yefry Burgos, 33, was sentenced in Manhattan federal court to 78 months in prison and ordered to pay $3,024,822 in restitution to the New York State Medicaid Program ("Medicaid"). The sentence was imposed by United States District Judge William H. Pauley III in the Southern District of New York.

Mr. Burgos' sentence comes after his guilty plea on March 23, 2009, in which he plead guilty to health care fraud for billing Medicaid for millions of dollars in medications that were not actually dispensed to Medicaid beneficiaries and to paying beneficiaries a kickback to use their billing information. The pharmacy's manager, Lourdes Bastardo, plead guilty to health care fraud on September 11, 2009 and is awaiting sentencing.

According to documents filed in this case and statements made during court proceedings, the background in this case is as follows:

Mr. Burgos owned Coral Pharmacy, a now-defunct pharmacy located at 4126 Broadway in Manhattan. Between December 2006 and January 2008, Coral Pharmacy billed Medicaid for prescription medications that were never dispensed.

Mr. Burgos and and Coral Pharmacy's manager, Lourdes Bastardo, purchased drug prescriptions from Medicaid beneficiaries for a fraction of the amount the Medicaid Program would reimburse to the pharmacy. In order to pay the beneficiaries cash, Mr. Burgos visited banks where Coral Pharmacy maintained its accounts to withdraw, on approximately a daily basis, thousands of dollars in cash—delivering a substantial portion to Ms. Bastardo to buy the prescriptions.

The pharmacy then submitted reimbursement claims to Medicaid for the full value of the drugs it falsely claimed were provided to Medicaid beneficiaries.

While imposing the lengthy sentence on Mr. Burgos, Judge Pauley stated that the defendant was "a poster child for part of the problem with the health care system," and "a predator who needed to be curbed."

Attorney Comments: There are a couple of notable points regarding this case. First, the patients (or beneficiaries) are involved. If the government wants to reduce health care fraud, there needs to be focus on the beneficiaries who are selling prescriptions or Medicare/Medicaid cards for cash. These beneficiaries need to be educated and learn that they could be prosecuted for health care fraud. Otherwise, the problem will continue.

Second, this is a trend of long sentences for white collar and health care fraud cases. Considering this was a guilty plea, the 78 month sentence is long and the Judge's comments show a tough stance on these cases.

Third, this was a joint federal-state investigation involving the Federal Bureau of Investigation, the New York City Human Resources Administration's Bureau of Fraud Investigation, and the Office of the Medicaid Inspector General of New York State.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal and Ann Schneider is a senior associate at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in health care fraud cases. Their website is: http://www.greenassoc.com/

Former President And Owner Of DME Company Arrested On Health Care Fraud Charges In Florida

On September 4, 2009, a seven-count Indictment was unsealed charging Alejandro Rodriguez, 53, of Miami-Dade County, with health care fraud, in violation of Title 18, United States Code, Section 1347. Each count carries a maximum of ten years’ imprisonment.

According to the Indictment, in February, 2000, Rodriguez acquired Complete Medical Center, Inc., (“CMC”) a Miami-based company that purportedly provided durable medical equipment (“DME”) to Medicare beneficiaries. Rodriguez obtained and maintained control of CMC by purchasing all of the shares of stock of CMC and by registering as the President, Vice-President, Secretary, Treasurer, Director, and Registered Agent of CMC with the State of Florida, Division of Corporations.

In April, 2000, Rodriguez notified Medicare that he was the new owner of CMC, the only officer and director of CMC, and the authorized representative for CMC. Later that month he opened up a business checking account for CMC, and was the sole signatory on that account. From the spring of 2000 through June 2008, CMC allegedly submitted approximately $3,570,502 in fraudulent claims to Medicare seeking reimbursement for DME items, such as oxygen concentrators, wheelchairs, and mattresses.

The Indictment alleges that Rodriguez falsely represented that these DME items and other services were prescribed by a doctor and had been provided to Medicare beneficiaries. As a result of such alleged false and fraudulent claims, Rodriguez caused Medicare to make payments to CMC in the approximate amount of $1,590,265, at least $280,157 of which was deposited into CMC’s business checking account.

An Indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov/.

Attorney Commentary: The health care fraud cases continue to be filed and Florida has more than its fair share with California and New York not far behind. Recently Florida has enacted state legislation to require certain health care businesses to post bonds. Florida is one of the few states in the United States that does not have a ban on the corporate practice of medicine. This means that non-licensed professionals can own medical offices and other health care offices.

We can expect other states such as California to consider requiring similar bonds for companies in the Medi-Cal program. The legality of such bonds might be an issue but to date the bar for opening a DME company and other health care businesses has been low in California and Florida. I expect the state legislatures to take some action in order to make it more difficult for companies to become Medicare or Medicaid/Medi-Cal providers. It appears that one of the problems is that provider enrollment does not conduct an adequate investigation before issuing provider numbers and allowing those providers to engage in good faith billing.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal and Ann Schneider is a senior associate at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in health care fraud cases. Their website is: http://www.greenassoc.com/

California Law Against Corporate Practice Of Medicine: Bill Pending In Legislature to Allow Certain Hospitals To Hire Physicians

California has one of the strictest laws against the Corporate Practice of Medicine (CPM). Presently, there is a bill pending in the Legislature, SB 726 (Ashburn), that would allow certain hospitals to hire physicians.

Under current law, hospitals are generally barred from hiring physicians as employees. The CPM Act prohibits corporations and other artificial legal entities from having professional rights, privileges, or powers in relation to the practice of medicine. Further, under the CPM doctrine, the state prohibits hospitals and other entities from employing physicians to provide professional services. This law was created to prevent corporations, other entities or non-professionals from unduly influencing the professional judgment and practice of medicine by licensed physicians.

There is a large and heated debate about this bill. The bill is sponsored by the California Hospital Association and is supported by AFSCME, a labor union interested in unionizing doctors. The California Medical Association (CMA) is vigorously opposing this bill.

The text of the bill can be found at:
http://info.sen.ca.gov/pub/09-10/bill/sen/sb_0701-0750/sb_726_cfa_20090428_105632_sen_comm.html

The argument in favor of this bill is that California's rural areas face a critical shortage of doctors. People are having difficulty seeing physicians, especially since the inland regions of the state have far fewer doctors than other areas. In addition, there is problem with access to doctors in the inner cities. Why is this? Because many in these areas are uninsured and doctors are reluctant to move to communities where they cannot make a living. Republican Senator Ashburn, who introduced this legislation, believes that one of the reasons is that California is one of the last few remaining states that do not allow hospitals to directly hire physicians.

The CMA opposes this bill on 5 grounds:

1) The ban on corporations practicing medicine is an important protection for patients in California hospitals. This protection ensures that those who make decisions that affect the provision of medical services (a) understand the quality of care implications of that medical service; (b) have a professional ethical obligation to place the patient’s interest first; and (c) are subject to the Medical Board of California.

2) The CMA contends that SB 726 will erode the quality of care in California hospitals. It will grant control over treatment decisions to hospital CEOs and administrative staff who have different motivations and mandates than physicians. This will create conflicted loyalties in an institution that must remain true to the patient’s interests, and will erode the quality of care patients receive in California hospitals.

3) CMA believes that placing doctors under the oversight of hospital administrators and CEOs who are under enormous pressures to cut costs or increase revenue will threaten the independent medical judgment necessary to ensure patients are protected.

4) CMA also posits that hospitals are already interfering with medical staffs’ ability to ensure quality care through independent self-governance. For example, some hospitals have adopted medical management protocols which have resulted in inappropriate hospital tests, procedures, and stays, jeopardizing patients and increasing costs.

5) Finally, CMA argues that allowing a hospital to directly employ a physician will NOT increase access to physician services. The hospital will push patients to their preferred provider thereby controlling the competitive market. Other non-employed physicians will not be able to compete and likely be forced out of town resulting in no increased access.

Attorney Commentary: We can expect to see shifts in the corporate practice of medicine doctrine in California over the next 10 years. There are exceptions for HMOs and the laws in other states are significantly different in allowing non-professionals to own medical practices and/or hire physicians. Regardless of whether this bill is passed or not, the debate about loosening the rules against the corporate practice of medicine in California will continue as there are proposals for significant changes to our health care system.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal and Ann Schneider is a senior associate at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is: http://www.greenassoc.com/

California Unveils Improved Prescription-Tracking System

On September 15, 2009, the California Department of Justice, Bureau of Narcotic Enforcement, CURES, unveiled improvements to their prescription medication tracking system, including the capability to instantly flag whether patients are abusing those drugs -- an issue highlighted with the deaths of celebrities Anna Nicole Smith and Michael Jackson.

This upgrade is a real-time access Prescription Drug Monitoring Program (PDMP) system which allows pre-registered users including licensed healthcare prescribers eligible to prescribe controlled substances, pharmacists authorized to dispense controlled substances, law enforcement, and regulatory boards to access real-time patient controlled substance history information.

The state’s database known as the Controlled Substance Utilization Review and Evaluation System, C.U.R.E.S, contains over 100 million entries of controlled substance drugs that were dispensed in California. Each year the CURES program responds to more that 60,000 requests from practitioners and pharmacists. The online PDMP system will make it much easier for authorized prescribers and pharmacists to quickly review controlled substance information via the automated Patient Activity Report (PAR) in an effort to identify and deter drug abuse and diversion through accurate and rapid tracking of Schedule II through IV controlled substances.

In order to obtain access to the PDMP system Prescribers and Pharmacists must first register with CURES by submitting an application form electronically at ttps://pmp.doj.ca.gov/pmpreg/. In addition, your registration must be followed up with a signed copy of your application and notarized copies of your validating documentation which includes: Drug Enforcement Administration Registration, State Medical License or State Pharmacy License, and a government issued identification.

You can mail your application and notarized documents to: Bureau of Narcotic Enforcement (BNE), Attn: PDMP Registration P.O. Box 160447 Sacramento, CA 95816.

Attorney Commentary: This will be critical for any physician or health care provider who is engaged in pain management or addiction treatment. It should be part of any compliance plan for these type of practices.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal and Ann Schneider is a senior associate at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers including, but limited to, those involved in addiction treatment and pain management. Their website is: http://www.greenassoc.com/

Manhattan Doctor Sentenced To 21 Months In Federal Prison For Illegal Medicaid Kickback Arrangement

On September 17, 2009, physician Muhammad Ejaz Ahmad ("Ejaz Ahmad") was sentenced to 21 months in prison and ordered to forfeit over $1.7 million for his role in an arrangement to pay illegal kickbacks to Medicaid recipients. The sentence was imposed in Manhattan federal court in the Southern District of New York by United States District Judge John G. Koeltl. The sentence followed Ahmad's guilty plea proceeding on May 22, 2008.

This case involved the physician paying kickbacks to patients and referring the patients to pharmacies which were owned by his wife, brother and brother-in-law. Those pharmacies also paid kickbacks to patients to keep their business. His brother and brother-in-law also plead guilty and his brother has already been sentenced.

According to documents filed in this case and statements made during court proceedings the facts are as follows:

Ejaz Ahmad was a physician, with an office in Brooklyn, who specialized in infectious diseases—including the treatment of HIV-positive patients. From January 2004 to August 29, 2006, Ejaz Ahmad attracted HIV-positive Medicaid recipients by paying an illegal kickback of $40 to patients at every visit, even though New York State only paid him $30 for the visit.

Ejaz Ahmad then referred these patients to one of three pharmacies that he owned and controlled through his wife: Staywell Pharmacy doing business as Nash Pharmacy located in Bayside, New York; Stay Slim Pharmacy in Brooklyn, New York; and ASA Drugs doing business as Script Depot, in Rego Park, New York. Each of these pharmacies was also affiliated with one of his relatives—either his brother, Muhammad Nawaz Ahmad, or brother-in-law, Mohammad Tanveer. Like Ejaz Ahmad, his brother Nawaz Ahmad and brother-in-law Tanveer also paid $40 kickbacks to the Medicaid patients in order to retain the patients' business.

Between January 2002 and September 2006, the New York State Medicaid program paid the pharmacies at least $2.5 million for services purportedly provided to patients to whom Nawaz Ahmad and his relatives had paid illegal kickbacks. It was alleged that most of these billings were for medications that were never ordered from legitimate wholesalers. Instead, the pharmacies allegedly provided these Medicaid patients with lower-priced, diverted, and black-market medications or, in some cases, billed Medicaid for drugs that were never dispensed.

For example, in 2005 alone, the pharmacies allegedly billed Medicaid over $1 million in excess of what the pharmacies had ordered from their legitimate wholesale drug distributors for three costly medications. The government claimed that the excess profits obtained from the Medicaid program paid for the kickbacks to patients.

Judge Koeltl ordered Ejaz Ahmad, 52, of Albertson, New York, to pay $1,783,020.06—the amount held in his pharmacies' bank accounts at the time of his arrest—to the Medicaid program in restitution. The monies held in the bank accounts had been forfeited in a parallel civil action.

His brother Muhammad Nawaz Ahmad, 41, of Floral Park, New York, pleaded guilty on May 22, 2008, to conspiring to pay illegal kickbacks to Medicaid recipients, and was sentenced by Judge Koeltl to 18 months in prison on December 14, 2008.

His brother-in-law, Mohammad Tanveer, 52, of Floral Park, New York, pleaded guilty on June 10, 2008 before Judge Koeltl. His sentencing is scheduled for September 25, 2009, at 4:00 p.m.

Attorney Commentary: This case is a laundry list of rules that were violated. From the kickbacks to the patients, to the self-referral to pharmacies that were owned or controlled by Ejaz Ahmad, the billing for medications that were not provided or billing for other black market medications, and other program violations - this case could be used as a sample health care fraud case. We have seen numerous cases where to get around the self-referral rule that providers will have a relative be the owner of the other health care facility. These arrangements usually do not stand up to scrutiny.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal and Ann Schneider is a senior associate at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in health care fraud cases. Their website is: http://www.greenassoc.com/

San Diego Podiatrist Sentenced In Health Care Fraud Case And Charged In Civil False Claims Act Case

On August 28, 2009, Dr. Clifford J. Wolf, DPM was sentenced in federal court in San Diego by the Honorable William Q. Hayes to serve five months in custody and five months home detention and pay a $5,000 fine based on Wolf’s conviction for one count of health care fraud in violation of 18 U.S.C. Section 1347. Dr. Wolf pled guilty on May 28, 2009. This is Case No. 08-CR-1542-WQH .

Dr. Wolf is a podiatrist with a primary office in Poway, California, who treated patients throughout San Diego County and was an approved Medicare provider. According to court documents, since at least 1999, Wolf engaged in a scheme to defraud Medicare by billing multiple times for surgical procedures called “incision and drainage” services that he did not perform for his patients, when instead he merely trimmed and filed the beneficiaries’ toenails. Dr. Wolf allegedly fabricated progress notes in the patients’ charts in an effort to have the records and diagnoses correspond to the services billed so that he could get paid.

As part of his guilty plea, Dr. Wolf pled guilty to count one of the fourteen-count indictment and admitted that he knowingly and willfully defrauded Medicare of approximately $66,347 from January 1, 2003 through December 31, 2006. Dr. Wolf paid that amount in restitution to the Medicare program prior to the sentencing.

On the same day as the sentencing, the United States filed a civil lawsuit today in U.S. District Court in San Diego against Dr. Wolf and his business, Wolf Podiatry Corporation, alleging violations of the False Claims Act. The False Claims Act provides that anyone who submits a false claim is liable for three times the monetary amount the government has been damaged and for penalties of $5,500 to $11,000 for each false claim submitted to the government. The government’s civil lawsuit against Wolf and Wolf Podiatry Corporation is Case Number 09cv1875JLS RBB.

Attorney Comments: This case is notable since the government is getting more aggressive about having a parallel civil case so they can recover treble penalties even where restitution has already been repaid. Further, the civil case was not filed until the doctor was sentenced.

Podiatric services have been heavily investigated by Medicare and Medi-Cal these past two years and we can expect to see more administrative overpayment cases in addition to the occasional criminal case. The fabrication of records here probably helped move this case to the criminal arena instead of leaving it as an administrative matter since the false records make criminal intent easier to prove.

We cannot stress enough the danger of altering records during audits or when records are requested by any company or government agency. Before you even think of altering or adding records -- seek the advice of experienced health care law counsel. There are ways to supplement your records and documenting the care rendered even if your patient records are inadequate to support the services billed. It may not be enough to obtain full payment or avoid overpayment - but fabricating records has negative consequences with the licensing boards and criminal exposure that make it unnecessarily risky.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal and Ann Schneider is a senior associate at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers including, but limited to, podiatrists. Their website is: http://www.greenassoc.com/

Health Care Practice Risk Management And FAQ - Treating Patients In A Difficult Economy

Health care practices are facing problems when patients become unable or don’t pay their co-pays or when they refuse to pay their physician charges. Just sending matters out to collections without finding out more can lead to Board complaints and lawsuits. Here are some frequently asked questions:

Question: When a patient is dissatisfied with care, can he or she dispute the charge with the credit card company?

Answer: A credit card customer can always request that a charge be questioned. Normally, when this situation occurs, the credit card issuer will open an investigation into the disputed charge. In the meantime, the card issuer may also withhold paying the credit charge amount to the physician.

Q: What is the appropriate response when an established patient comes in but is unable to pay?

A: Talk to the patient first. Investigate why the patient isn’t paying the bill; e.g., is he or she unhappy with the care? After that, you can consider alternative financing options, including bill collection. It is helpful to have a written policy summarizing the practice’s policy on financial matters that you give to each patient at the initial visit. A health care provider has the right to expect payment for services rendered. The practice should have a policy and apply it consistently in a nondiscriminatory fashion. When you can, “remind” a patient that he or she received a copy of your policy at the time of the first visit. It makes handling this type of difficult situation easier. If you decide to terminate the patient relationship for nonpayment, you must follow a formal process that includes giving the patient proper notice and treating emergencies in the interim.

Q: Can the health care provider refuse to establish a patient-physician relationship based on the patient’s inability to pay?

A: Yes, as long as the patient is not seeing you based on a referral from an Emergency Department where you were on call when the patient was seen. If the patient did not come to you as a result of an ED call and you have an established policy of not accepting patients who cannot pay, you can refuse to establish the relationship. Potential patients should be given some indication of your practice’s financial requirements when they make an initial appointment for treatment. If the potential patient is not aware of your financial requirements, he or she may delay making other arrangements for care while waiting for an appointment with you. If the patient then arrives for an appointment and you decide not to accept him or her for financial reasons, your decision can appear questionable in retrospect if the patient is injured by the subsequent delay in receiving medical care. A process in which the biller checks the status of coverage before the patient comes in can expedite your decision on whether to accept him or her as your patient.

If the patient was a referral from an ED call, determine the requirements of the particular hospital as established in the hospital’s medical staff bylaws and rules and regulations. You must follow those requirements. At a minimum, you will likely be required to see the patient at least one time to determine the patient’s status and whether he or she has an emergency medical condition under EMTALA. If the patient is in need of emergent treatment, you will likely be required to provide the care regardless of his or her ability to pay, although you can ask for payment or payment arrangements.

Q: When a patient is dissatisfied with the result of an elective procedure and demands a concession (a free revision, a refund, a discount, or refuses to pay credit card charges), what recourse does the physician have?

A: Selecting the correct patient, providing very thorough informed consent, and keeping the lines of communication open are your best defenses against patient dissatisfaction. However, once a patient who is dissatisfied asks for compensation, contact your attorney or your risk manager, who will help you evaluate the situation from professional liability and compliance standpoints. In some situations, making a concession may be viewed as a “courtesy” gesture and may be a positive factor in the defense of a claim. Other situations may warrant the use of a Release of Claims form.

One preventative measure is to put a time limit on any adjustments or revisions to the original procedure (such as 60 or 90 days from the procedure date). Otherwise, a patient could come in years later and request a revision that was discussed when the procedure was first done.

Q: What factors should I consider in choosing a commercial credit company to provide a line of credit to my patients? Where can I find a reputable company?

A: Some commercial credit companies hold the physician responsible if the patient defaults on a payment. Before using a commercial credit company, read the contract carefully to make sure you won’t be liable for a patient’s outstanding balance. You should also be aware of your state’s consumer protection laws regarding lending and disclosure and make sure that your patients understand the terms and conditions of the financing. Your bank, local medical society, or professional society can help you locate a commercial credit company.

Q: How should my office handle credit card challenges?

A: A credit card company will notify the physician in writing about an inquiry into a charge that is being challenged. It is very important that you respond to the letter. If you don’t clarify the dispute, the charge will be disallowed. Educate your office staff so that they recognize these letters and they bring them to your attention. Be sure to respond to any letter related to charges that are in question.

One preventative measure is that if you accept a credit card for payment, you may want to consider a limit on allowable credit card charges. The limit can be a percentage of the total treatment charge or a dollar limit, e.g., $3,500, $5,000, or not more than 50 percent of the procedure cost.

Other preventative measures are (1) payment plans should be in writing and signed by the patient and (2) be sure to obtain a reference for credit applications. This will ultimately assist you in locating the patient if the account needs to be sent to a collection agency.

Q: Can I use a collection agency?

A: Yes, but sure you select a reputable collection agency. There are very specific state laws dealing with fair debt collection. A physician who selects an agency that violates state laws could face liability for negligent selection. We have had health care providers sued for what their collection agency did during the collection process.

As a preventative measure, identify poor payers early on and deal with the problem. Do not wait until the situation reaches a crisis point and puts your health care provider-patient relationship at risk.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal at Green & Associates and Ann Schneider is a senior associate at Green & Associates. They focus their practice on the representation of professionals, particularly health care professionals including individual physicians, corporate providers and group practices. Their website is: http://www.greenassoc.com/

CPA Charged With Grand Theft And Money Laundering For Taking Money From Rotary Club While Club Treasurer

On September 2, 2009, Patrick David Dugan, a Certified Public Accountant, was arraigned in Orange County Superior Court on charges of unlawfully taking $49,000 from the Los Alamitos Rotary Club (LARC) by transferring money into his personal account while serving as the club treasurer. Mr. Dugan is charged with one felony count of grand theft and two felony counts of money laundering. The bail was set at $49,000 - the loss amount. The maximum sentence on these charges is four years and four months in state prison.

According to the complaint, Mr. Dugan, a Certified Public Accountant, had worked as the financial officer for LARC since 1998 and was solely responsible for maintaining the club’s financial records and presenting financial statements to the executive board and club members. Between December 2005 and December 2007, Mr. Dugan is alleged to have taken $49,000 from LARC by transferring the money from the club into his personal account. Mr. Dugan is accused of attempting to hide the embezzlement by altering LARC’s financial statements.

The alleged offense was discovered in April 2008, when Mr. Dugan became ill and was unable to perform his duties for LARC. The theft was discovered in May 2008 when members of the club noticed discrepancies between official bank records and the financial reports presented by Mr. Dugan. LARC reported the theft to the Los Alamitos Police Department, who referred the case to the Orange County District Attorney’s Office for investigation to avoid the appearance of a conflict of interest.

Attorney Commentary: Embezzlement cases are becoming more common with the economic pressures facing our economy. Normally law-abiding people can be tempted when given unfettered access to funds. Even if the person intends to pay it back later, the unlawful or unauthorized taking is designated a theft. It also seems to be one of those offenses that once it begins, it is difficult to stop.

The best time to address one of these cases is before charges are filed. Civil settlements can be useful and help avoid criminal charges since often the company or business or individual simply wants the money returned. Thus, the ability to pay restitution is paramount. However, if someone has had financial problems, repayment can be an issue. This is the time to obtain a second job, cut every possible expense and do everything to amass funds for repayment.

In addition, bail arrangements need to be made in advance to ensure that there is self-surrender and a bail amount that is affordable. Usually in theft or embezzlement cases, the bail amount is the amount of the loss. There are creative ways to reduce bail in order to have more funds to pay restitution and to make sure the individual is out of custody and able to work to pay restitution.

If charges are filed, restitution is still critical. The days, however, when repayment alone will suffice are over in some jurisdictions. My clients and I have heard more than one blistering speech from a judge recently regarding "white collar crime." It takes a comprehensive plan to avoid jail time in these cases -- of which restitution and satisfying the alleged victim are key.

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com. Tracy Green is a principal and Ann Schneider is a senior associate at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have handled numerous civil and criminal cases where embezzlement or theft allegations or charges have been filed. The firm website is http://www.greenassoc.com/

Proposed Regulations On Glaucoma Certification For Optometrists

The California State Board of Optometry is currently considering draft regulations regarding glaucoma certification for optometrists. These regulations stem from SB 1406, 2008 legislation that mandated development of new certification requirements for optometrists who want to medically treat primary open-angle, exfoliative, and pigmentary glaucoma. The Board has until January 1, 2010 to implement the glaucoma certification requirements via regulations.

Signed into law last September and effective this year, SB 1406 grants optometrists the ability to diagnose and treat patients independently with glaucoma as well as greater prescriptive authority.

The California State Board of Optometry has a link for frequently asked questions regarding glaucoma certification:
http://www.optometry.ca.gov/faqs/glaucoma_cert.shtml

The standards recommended by OPES and approved by the State Board of Optometry allow those who graduate from an accredited school or college of optometry after May 1, 2008 to be glaucoma certified without any additional course or patient case management requirements. This is consistent with the Legislature’s intent with SB 1406, reflecting new graduates’ training in all aspects of glaucoma diagnosis and management.

Pre-May 1, 2000 optometric graduates will be required to take a 24-hour course in the diagnosis, pharmacological, and other treatment and management of glaucoma. All pre-2008 graduates also will be required to treat or manage 25 patient cases for one year, which can be fulfilled under the guidance of an ophthalmologist or an optometrist who is already glaucoma certified. Credit for 15 patient cases may be met via a 16-hour advance case management course or grand-rounds program.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com Tracy Green is a principal at Green & Associates and Ann Schneider is a senior associate at Green & Associates. They focus their practice on the representation of professionals, particularly health care professionals including optometrists. Their website is: http://www.greenassoc.com/

California Attorney General Launches Independent Inquiry Into HMOs' Handling Of Health Insurance Claims

On September 3, 2009, California Attorney General Edmund G. Brown Jr. announced that deputies in his office are launching an independent inquiry into how Health Maintenance Organizations review and pay insurance claims submitted by doctors, hospitals and other medical providers. This investigation is prompted by reports that California's five largest health-insurance providers are denying insurance claims at rates of up to 39.6 percent.

"These high denial rates suggest a system that is dysfunctional, and the public is entitled to know whether wrongful business practices are involved," Brown said. According to the AG's Office, in the coming days and weeks, deputies will review records and will speak with individuals who have relevant knowledge of the issues raised.

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com or 213-233-2260. The firm website is: http://www.greenassoc.com/

Former Cosmetic Surgery Owner Pleaded Guilty To Health Insurance Fraud In Manhattan Federal Court

In a case that has a lengthy history, on September 4, 2009, Arthur Kissel, a/k/a "Arthur Froom," a former cosmetic surgery clinic owner, pleaded guilty to a scheme to defraud health insurance companies of more than $900,000 in Manhattan federal court (the Southern District of New York). Mr. Kissel pleaded guilty to one count of conspiracy to commit mail fraud and health care fraud, and one count of mail fraud.

Mr. Kissel and his wife Sonia LaFontaine were originally indicted in March 1998. At that time, Mr. Kissel was in Canada where he and his wife ran another cosmetic surgery clinic. Ms. LaFontaine was arrested in the United States in 1998 and was found guilty on all charges on July 12, 2000, following a six-week jury trial. She was ultimately sentenced to ten years in prison. The United States initiated extradition proceedings against Mr. Kissel in 2000, which resulted in his August 2008 return from Canada on these charges.

According to the press release issued by the U.S. Attorney's Office which referenced the Indictment to which Mr. Kissel pleaded guilty; the evidence at the 2000 trial of Mr. Kissel's wife, Sonia LaFontaine, in the case; and statements made during Mr. Kissel's September 2008 bail hearing and his guilty plea proceeding before United States District Judge Denny Chin, the facts surrrounding this plea agreement are as follows:

Kissel and LaFontaine owned and operated LaFontaine Rish Medical Associates, a cosmetic surgery clinic located at 315 West 57 Street in Manhattan. LaFontaine—who had no medical license and was not acting under a physician's supervision—performed procedures which were billed as having been performed by licensed physicians. Kissel and LaFontaine's clinic also billed cosmetic procedures, such as "tummy-tucks" and liposuction, in the guise of medically necessary procedures, such as hernia repairs and lesion removals. They also submitted claims to insurance companies for procedures that were never performed, and exaggerated insurance claims by increasing the number and complexity of procedures that were actually performed.

Mr. Kissel faces a maximum sentence of five years in prison on each count; a maximum fine of the greater of $250,000 or twice the gross gain or loss resulting from the crime on each count; and forfeiture of the proceeds of his crimes. Mr. Kissel is scheduled to be sentenced by Judge Chin on December 15, 2009.

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com or 213-233-2260. The firm website is: http://www.greenassoc.com/

Important 9th Circuit Decision On Procedures For Government To Use In Search Warrants Examining Or Seizing Computers Or Electronic Storage Medium

On August 26, 2009, the United State Court of Appeals for the Ninth Circuit issued an important decision, United States v. Comprehensive Drug Testing, Inc., that will govern the procedures to be used when the government wishes to obtain a warrant to examine a computer hard drive or electronic storage medium in searching for certain incriminating files, or when a search for evidence could result in the seizure of a computer.

This is an important decision for white collar criminal practitioners and any criminal defense attorney where there is electronic evidence resulting from a search warrant.

A copy of the decision can be found at:

http://www.ca9.uscourts.gov/datastore/opinions/2009/08/26/05-10067eb.pdf

This decision may provide a great source for suppression of searches where there have been electronic/computer searches and evidence generated from those searches. The opinion is lengthy and interestingly enough written by Justice Kozinski (who knows something about computers due to his own personal issues). And an en banc opinion -- meaning it's from the entire Ninth Circuit which gives it more weight. It will be interesting to see if the U.S. appeals from this decision to the U.S. Supreme Court.

There are numerous procedures outlined in the opinion. U.S. Attorneys' Offices are probably looking at this opinion and realizing that for computer searches they are going to need a taint team separate from the investigation or else they are going to be facing valid motions to suppress. The reason this is important is that in the past, computers were searched and every file was examined as if it were a filing cabinet.

Under this opinion, plain view doctrine for computer searches has been severely restricted. As the opinion says: "Magistrates should insist that government waive reliance upon the plain view doctrine in digital evidence cases." And defense attorneys should look at this opinion for ideas on where there have been computer/electronic data searches for their own motions to suppress evidence.

Here is a section of the opinion where the procedures are summarized:

"Everyone’s interests are best served if there are clear rules to follow that strike a fair balance between the legitimate needs of law enforcement and the right of individuals and enterprises to the privacy that is at the heart of the Fourth Amendment. Tamura has provided a workable framework for almost three decades, and might well have sufficed in this case had its teachings been followed.

"We believe it is useful, therefore, to update Tamura to apply to the daunting realities of electronic searches which will nearly always present the kind of situation that Tamura believed would be rare and exceptional—the inability of government agents to segregate seizable from non-seizable materials at the scene of the search, and thus the necessity to seize far more than is actually authorized. We accept the reality that such over-seizing is an inherent part of the electronic search process and proceed on the assumption that, when it comes to the seizure of electronic records, this will be far more common than in the days of paper records.

"For those practicing white collar criminal defense, an important decision has been "This calls for greater vigilance on the part of judicial officers in striking the right balance between the government’s interest in law enforcement and the right of individuals to be free from unreasonable searches and seizures. The process of segregating electronic data that is seizable from that which is not must not become a vehicle for the government to gain access to data which it has no probable cause to collect.

"In general, we adopt Tamura’s solution to the problem of necessary over-seizing of evidence: When the government wishes to obtain a warrant to examine a computer hard drive or electronic storage medium in searching for certain incriminating files, or when a search for evidence could result in the seizure of a computer, see, e.g., United States v. Giberson, 527 F.3d 882 (9th Cir. 2008), magistrate judges must be vigilant in observing the guidance we have set out throughout our opinion, which can be summed up as follows:

"1. Magistrates should insist that the government waive reliance upon the plain view doctrine in digital evidence cases. See p. 11876 supra.

"2. Segregation and redaction must be either done by specialized personnel or an independent third party. See pp. 11880-81 supra. If the segregation is to be done by government computer personnel, it must agree in the warrant application that the computer personnel will not disclose to the investigators any information other than that which is the target of the warrant.

"3. Warrants and subpoenas must disclose the actual risks of destruction of information as well as prior efforts to seize that information in other judicial fora. See pp. 11877-78, 11886-87 supra.

"4. The government’s search protocol must be designed to uncover only the information for which it has probable cause, and only that information may be examined by the case agents. See pp. 11878, 11880-81 supra.

"5. The government must destroy or, if the recipient may lawfully possess it, return non-responsive data, keeping the issuing magistrate informed about when it has done so and what it has kept. See p. 11881-82 supra.

"Just as Tamura has served as a guidepost for decades, we trust that the procedures we have outlined above will prove a useful tool for the future. In the end, however, we must rely on the good sense and vigilance of our magistrate judges, who are in the front line of preserving the constitutional freedoms of our citizens while assisting the government in its legitimate efforts to prosecute criminal activity. Nothing we could say would substitute for the sound judgment that judicial officers must exercise in striking this delicate balance."

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com or 213-233-2260. The firm website is: http://www.greenassoc.com/

California Receives $37.5 Million As Part Of Nationwide Settlements With Pfizer Over Illegal Kickbacks and Improper Marketing

On September 2, 2009, California Attorney General Edmund G. Brown Jr. announced that California will receive $34.8 million as part of a nationwide settlement with Pfizer, Inc., resolving civil and criminal charges that the company paid "illegal kickbacks" and conducted improper marketing campaigns for more than a dozen of its drugs.

Here is a link to a September 3, 2009 article in the New York Times about the settlement: http://www.nytimes.com/2009/09/03/business/03health.html

This settlement is based on nine whistleblower (qui tam) cases that were filed on behalf of California and other states in the U.S. District Court for the District of Massachusetts, the U.S. District Court for the Eastern District of Pennsylvania and the U.S. District Court for the Eastern District of Kentucky. Actions were filed by private individuals under state and federal false claims statutes, including California's False Claims Act.

Under the nationwide agreement, Pfizer will pay a total of $2.3 billion to the federal government and all 50 states. This is the largest health care fraud settlement in the history of the U.S. Department of Justice. Brown announced that California will receive an additional $2.7 million in a separate settlement with Pfizer over the illegal off-label marketing of Geodon, an anti-psychotic medication. Under this agreement, Pfizer will pay a total of $33 million to California and 42 other states.

The U.S. Department of Justice, California and other states contend that Pfizer engaged in a pattern of unlawful marketing activity to promote drugs for uses which the Food and Drug Administration (FDA) had not approved. It is not illegal for a physician to prescribe a drug for an unapproved use, but federal law prohibits a manufacturer from marketing a drug for off-label uses not approved by the FDA. This promotional activity included:

- Marketing Bextra for conditions and dosages other than those for which it was approved;

- Promoting the use of the anti-psychotic drug Geodon for a variety of off-label conditions such as attention deficit disorder, autism, dementia and depression for patients that included children and adolescents;

- Selling the pain medication Lyrica for unapproved conditions;

- Making false representations about the safety and efficacy of Zyvox, an antibiotic only approved to treat certain drug resistant infections.

The settlement also contends that Pfizer paid illegal kickbacks to health care professionals to induce them to promote and prescribe Bextra, Geodon, Lyrica, Zyvox, Aricept, Celebrex, Lipitor, Norvasc, Relpax, Viagra, Zithromax, Zoloft and Zyrtec. These payments allegedly took many forms, including entertainment, cash, travel and meals. Federal law prohibits payment of anything of value in exchange for the prescribing of a product paid for by a federal health care program.

As a condition of the settlement, Pfizer will enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company's future marketing and sales practices.

California's pre-interest recovery of $34.8 million represents double damages, half of which will go to Medi-Cal. The remaining $17.4 million will be deposited, pursuant to state law, in the Attorney General's False Claims Fund, which is used to support ongoing investigations and prosecutions of false claims unlawfully filed at the expense of the state.

In a second settlement with Pfizer, it was alleged that Pfizer engaged in unfair and deceptive practices when it marketed Geodon for off-label uses between January 1, 2001 to December 31, 2007. Geodon is the brand name for the prescription drug ziprasidone. The drug has been approved by the FDA for treatment of schizophrenia in adults and for manic or mixed episodes of bipolar disorder in adults. The complaint contends that Pfizer promoted Geodon for a number of off-label uses, including pediatric use and use at dosage levels higher than had been approved by the FDA. As part of the settlement, Pfizer has agreed to change how it markets Geodon and has agreed to stop promoting off-label uses. California will receive $2.7 million in civil penalties from Pfizer.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com Tracy Green is a principal at Green & Associates and Ann Schneider is a senior associate at Green & Associates. They focus their practice on the representation of professionals, particularly health care professionals. They have handled numerous investigations and cases relating to the federal and state Anti-Kickback and Stark laws. Their website is: http://www.greenassoc.com/

Woman Pleads Guilty To Unauthorized Practice Of Medicine For Acting As Midwife Without Certification During Home Delivery Of Stillborn Baby

On August 29, 2009, Megan Marie Roy, 34, pleaded guilty to one felony count of the unauthorized practice of medicine in Orange County Superior Court. Ms. Roy had been charged by the Orange County District Attorney's Office with this charge based on the allegation that she had acted as a midwife without proper certification during the home delivery of a baby girl in which the baby was stillborn.

This is the type of charge that does not usually get brought to the authorities' attention unless there are some bad facts. In this case, the facts are bad and sad for all. The fact that the case was not charged more harshly may indicate that there was no evidence that the child would have been born healthy if a licensed provider had been present at the home birth.

The facts relating to the case are as follows. Pregnant victim Jane Doe wanted to deliver her baby at her Garden Grove home and hired another midwife for the delivery. Prior to the birth of the baby, the midwife moved out of state and introduced Mr. Roy to Jane Doe as a substitute. Ms. Roy told the victim that she was not certified to be a midwife.

On March 24, 2008, Ms. Roy acted as a midwife without medical certification for Jane Doe’s delivery. Ms. Roy did not have a doctor or any other qualified medical personnel present at the victim’s home during the delivery. It was alleged that Ms. Roy acted as the primary medical care provider to Jane Doe without the necessary skills, licensing or knowledge to deliver the baby, or handle medical complications.

After several hours in labor and obvious physical signs of distress, the baby’s father called 9-1-1. Jane Doe was transported to the hospital, where her baby girl was later delivered stillborn.

Ms. Roy was sentenced to three years of formal probation, 400 hours of community service at a facility caring for sick children, donate $2,000 to St. Jude Children’s Research Hospital, and ordered to pay restitution to the victim.

Any questions or comments should be directed to: tgreen@greenassoc.com or aschneider@greenassoc.com Tracy Green is a principal at Green & Associates and Ann Schneider is a senior associate at Green & Associates. They focus their practice on the representation of professionals, particularly health care professionals including individual physicians, corporate providers and group practices. They have also handled numerous unauthorized practice of medicine cases.
Their website is: http://www.greenassoc.com/