Colorado Doctor Indicted For Health Care Fraud, Distributing Controlled Substances And Other Charges Arising From Pain Management Practice

On August 26, 2013, a federal grand jury in Colorado issued an indictment last week for doctor Joel E. Miller in Craig, Colorado that accused him of prescribing controlled substances in quantities and dosages that resulted in abuse, misuse, addiction and death. A copy of the Indictment can be found here. There are 35 counts against him including health care fraud for billing to Medicare and Medicaid, distributing controlled substances, money laundering and forfeiture. 

This is a continued trend in physicians being charged as if they are drug traffickers. Any physician who prescribes scheduled narcotics needs to make sure that their practice is reviewed for all compliance and ensure that the evolving standard of care is being met. Even one patient in today’s world can result in charges since under the law, only if there is medical necessity and legitimate medical need (as established by the standard of care along with the record keeping required). 

Practicing physicians can learn from the allegations in the Indictment and think about them in the context of their everyday pain management practices. The Indictment alleges that Dr. Miller engaged in the following scheme which supports the charges filed against him :

(1) prescribed quantities and combinations of controlled substances to patients but failed to adequately medically address the misuse and abuse of the prescribed controlled substances of the patients; 

(2) prescribed controlled substances to patients knowing that his patients were addicted to the controlled substances, were misusing the controlled substances, or "doctor-shopping," and were requesting additional quantities of controlled substances to support the patients' drug habits;

(3)  prescribed controlled substances in quantities and dosages that would cause patients to abuse, misuse, and become addicted to the controlled substances;

(4) required patients to pay for follow-up visits to obtain additional prescriptions for controlled substances; 

(5) prescribed controlled substances to patients knowing that his prescribing endangered his patients' lives, and if taken as directed, his prescriptions would be expected to result in accidental overdoses;

(6) prescribed controlled substances to patients without determining a sufficient medical necessity for the prescription of controlled substances;

(7) prescribed controlled substances to patients in a manner which was inconsistent with the usual course of professional practice and for other than legitimate medical purpose;

(8) prescribed pharmaceuticals to patients for whom the prescription was not intended, and directed the persons to whom he prescribed the pharmaceuticals to give the prescription to third parties; 

(9) prescribed controlled substances to patients in such strengths and quantities that his prescribing became a contributing factor in the patients' overdose deaths; and

(10) pre-signed prescriptions and allowed office employees to distribute controlled substance prescriptions to patients in his absence and without a doctor's examination of the patient.

What can prescribing physicians learn from this Indictment even when they are doing their best to run a practice that is compliant? It is critical to address patients' abuse of prescribed substances, any addiction issues, potential diversion or misuse, and office procedures. The standard of care goes beyond the practice of medicine and it is critical that there is documentation and procedures in place that help follow up on any "red flags" or patients who are addicted, abusing or who have grown opiant tolerant or have dosages that pose risks to the patients. Make sure your practice is the type that an expert could review and indicate that you are following the standard of care with respect to these issues. Prevention in these cases is the best medicine. 

Posted by Tracy Green, Green and Associates, Attorneys at Law

Los Angeles Podiatrist Sentenced To Twenty-Four Months For His Role In Identity Theft And Bank Fraud To Obtain Money For His Medical Practice

Professionals, like anyone else, can make huge judgment and professional errors -- especially when it comes to making their practice financially viable during difficult times.  One recent case shows how one medical professional, a podiatrist, was charged criminally due to desparate measures.

On June 24, 2013, podiatrist Dr. Bill Releford, who founded the Releford Foot and Ankle Institute, was sentenced to 24 months in federal prison for his conviction on federal fraud charges related to a bank fraud scheme that used stolen identities to cause two financial institutions to suffer $3 million in losses. Dr. Releford specifically admitted in his plea agreement that he participated in the scheme to obtain money for his medical practice, which had offices in Beverly Hills and Inglewood.

Dr. Releford and five other co-defendants operated a scheme to defraud financial institutions by using stolen identities to establish business lines of credit which were fraudulently drawn down to provide money that was used for their personal expenses. After obtaining stolen personal identifying information – including dates of birth, Social Security numbers, credit profiles and driver’s license numbers from victims with high credit scores, including another physician from Pasadena – members of the conspiracy submitted fraudulent applications for business lines of credit to various banks. Once the applications were approved, the defendants liquidated the credit lines.

Over the course of the scheme, Dr. Releford helped the other defendants open at least two credit lines that provided funds for Dr. Releford’s medical practice. Dr. Releford also attempted to open a third credit line valued at up to $500,000, which he planned to use to fund a clothing business. Dr. Releford further participated in the scheme by helping to launder thousands of dollars from other fraudulently obtained credit lines. Dr. Releford had a minor role and two of his co-defendants went to trial, and their sentences were significantly longer (one received 88 months). 

In addition to the prison term, Judge Hatter ordered Releford to pay $218,237 in restitution and a $10,000 fine. At the sentencing hearing, Judge Hatter noted Dr. Releford’s attempts to rehabilitate himself – such as Releford’s offer to immediately pay $1,500 in restitution and his recent participation in charitable projects – and said this effort spared Releford from a longer prison sentence. It is therefore notable that post-offense rehabilitation is important at sentencing and even if defendants cannot pay the entire amount of restitution, efforts to make payments can be recognized at sentencing.  

Posted by Tracy Green

Green and Associates, Attorneys at Law  

Los Angeles Doctor Pleads Guilty In Federal Court To Distribution Of Hydrocodone And Agrees To Surrender Medical License As Part Of Plea Agreement

On August 12, 2013, a Los Angeles doctor, James William Eisenberg (age 72),  pleaded guilty before United States District Judge Michael W. Fitzgerald to one count of distribution of hydrocodone (Vicodin and Norco) in violation of 21 U.S.C. Section 841 for writing hundreds of prescriptions for various controlled substances after his DEA license was revoked.  As part of the plea, Dr. Eisenberg has agreed to surrender his medical license. This surrender agreement is becoming more common as part of plea agreements in the Central District of California. 

Dr. Eisenberg’s problems arose in December 2011 when his DEA license was suspended while he was working in Arizona.  In July 2012, a DEA administrative judge determined that Dr. Eisenberg acted as a “drug dealer” and issued an order permanently revoking his DEA registration. The orders issued by the administrative judge were based on findings that Dr. Eisenberg, who at the time was working out of a “medical marijuana” club in Arizona, “lacked a legitimate medical purpose and acted outside of the usual course of professional practice” when he wrote prescriptions for OxyContin and Xanax in exchange for $150 cash payments. The DEA judge also found that Dr. Eisenberg wrote “medical marijuana” recommendations to undercover officers posing as patients, and that Eisenberg prescribed OxyContin to one of the undercover agents “before [Eisenberg] had even performed a physical examination.”

DEA investigators later learned that Eisenberg continued to prescribe controlled substances, including hydrocodone, in violation of the DEA’s orders. A review of a California Department of Justice database that tracks prescriptions showed that, following the suspension of Dr. Eisenberg’s registration number, patients filled more than 1,700 of his prescriptions for controlled substances, including more than 1,200 prescriptions for hydrocodone.

DEA investigators executed a federal search warrant on one of Dr. Eisenberg’s West Hollywood offices on February 19, 2013. The affidavit in support of the search warrant shows that the government used surveillance and undercover operations to gather evidence on whether Dr. Eisenberg continued to write prescriptions for controlled substances in violation of the DEA’s revocation order. The evidence included an operation in which an undercover agent, posing as a patient, obtained a prescription from Eisenberg for hydrocodone and alprazolam (Xanax). Dr. Eisenberg was indicted on May 10, 2013.

Dr. Eisenberg is scheduled to be sentenced on December 9, 2013. The statutory maximum in this case is 10 years in federal prison but it is not expected that the sentence would be that high. The plea agreement has an agreed base offense level of 18 for the drugs prescribed and the U.S. Attorney’s Office will seek a 2-level enhancement for abuse of position of trust under USSG Section 3B1.3. Dr. Eisenberg will also receive a 2 or 3-level reduction for acceptance of responsibility. 

Without considering any other factors, this places him in the rough range of 24-33 months of custody under the guidelines which are not binding on the judge. Sentencing in federal cases is akin to a bench trial and there are many factors and considerations that come into play in determining the sentence. Dr. Eisenberg’s age and health may be a factor as well.

In our practice we often see that is the older physicians or ones who have had personal problems that end up with these issues and there are often mitigating factors and circumstances that can be raised at sentencing. However, it would be preferable if health care professionals realize the huge risks they are undertaking in today's world when they work at clinics where they write prescriptions without medical necessity or where other statutes and regulations are violated. I cannot imagine that this physician ever thought he would be charged as if he were a drug dealer and that this is how his career would end. It is quite tragic but hopefully others can learn from his case. 

Posted by Tracy Green

Green and Associates, Attorneys at Law

213-233-2260

www.greenassoc.com

Email: tgreen@greenassoc.com

City Councilman Charged With In Home Supportive Services (IHSS) Fraud For Billing Program While Mother Was Out Of The Country

There has been an increased filing of felony fraud cases involving California's In Home Supportive Services program. The latest to be charged is a Moreno Valley city council member who on August 12, 2013 was charged with eight felony counts relating to billing and collecting $15,000 for IHSS services provided to his mother while she was allegedly out of the United States in the Philippines and Taiwan. The felony charges included grand theft, filing fraudulent documents, presenting a false claim and fraud. The case is pending in Riverside County Superior Court.

The IHSS program is an excellent program in that it allows care to be provided at home and ultimately saves the State significant sums in hospital and nursing home costs.  However, the programs which are administered by local counties -- even though funded by Medi-Cal -- are being more aggressive on combatting fraud and billing for services not provided. Audits of these programs have criticized IHSS for being an open door for fraud and abuse. Since most caregivers are family members, friends or someone known to the beneficiary this increases the risk for fraud.

We have had a number of cases where billing was done for the Medi-Cal beneficiaries while the beneficiaries were out of the United States. Sometimes those cases were referred to the County by Social Security because the beneficiaries collected SSI while outside of the United States. Other times the issues were raised by on-site visits or care provided by family members who worked full-time at other jobs. We have also had cases where the person providing the IHSS services were out of the country while the services were provided. Other cases have involved the IHSS provider collecting the funds and hiring someone else to perform the services. And other cases involved claims that the total hours billed were not provided.

There are a number of ways that the County can refer a case criminally but the case often begins with an investigation. In those cases, it is important to find legal counsel before any interviews or incriminating statements are made. We have prevented a number of cases from being filed when involved at the beginning of the investigation. There are times, for example, when the billing errors were a result of not understanding the rules of the program. There are other times when there are suspicions but the government does not have any evidence of the wrongdoing and will not unless there is a confession by the caregiver. Other types of cases with difficult facts can be handled better if there is a strategy at the beginning rather than the time of an arrest. The city council member in the case referenced above resigned from his position due to this arrest and the charges are still pending with an arraignment scheduled for October 7.

Posted by Tracy Green, Green and Associates, Attorneys at Law
213-233-2260; Email: tgreen@greenassoc.com

California Medical Board Increases Request For Patient Records From Pain Management Physicians - Be Proactive Now And Stay Current

Physicians who treat for pain management physicians are clinicians. They did not go to medical school to become DEA agents, police officers or judges -- even though in today's climate it can seem like they feel pressured to take on these roles. In California and other states, physician who prescribe opioids or controlled substances for pain treatment are under greater scrutiny and have a greater chance of having their records requested by the Board or the DEA for review.

The Los Angeles Times ran an article entitled "Oxycontin maker guards its closely guarded list of suspect doctors" about Purdue Pharmacy and how it has sold $27 billion worth of Oxycontin since 1996. It criticizes the company for not alerting law enforcement or medical authorities to the physicians who are suspected of overprescribing or illegal prescribing. This is part of a series of stories ran by the Times regarding prescription drugs and is a reminder that practitioners in this field are currently under a microscope.

We have had a number of clients whose records have been reviewed by the Board to see if their patient care for pain management was within the standard of care. The request for records are often triggered by a single complaint (such as a pharmacy complaining about overprescribing for a single patient). The Board runs the CURES report on the physician and selects for additional review 8 to 10 patients who are younger, middle-aged or on high opioid treatment dosages or where there are some other red flags with these patients.

In these cases, it is important to get legal counsel immediately even for a consultation to ensure that you are well prepared for any interview and that your complete file is submitted (and in many cases with a summary of the patient's care). In some of our cases, we found weaknesses in our client's practices and procedures and while not conceding any problems, we made positive changes immediately and it was helpful in showing that we had responsible professionals who are staying current with the changing landscape. In some cases, early expert retention may be needed or we found that a patient or two was diverting medications and had to make adjustments at that point.

If pain management treatment is part of your practice, it is time to perform an audit of your practice and make sure that your record keeping, consent forms, screening tools, treatment agreements, referrals for depression, referrals to other physicians as needed, patient education forms, and monitoring practices (urine testing, CURES reports, pill counting, etc.) are keeping up with the changing standard of care and changing laws and regulations. Do you modify your treatment plan when the patient reaches in excess of 120 mg morphine equivalent dosage (MED)? Do you document with specifics how the benefits of opioid treatment outweigh the risks? Build this into your staff and practice so it's part of the process.

It is becoming more important to have "universal" precautions in dealing with patients to ensure there is no risk of diversion. We have had clients who run urine tests and CURES reports on some patients but not on others who seem low risk. However, you cannot simply assume that just because someone is elderly (for example) that they do not pose a risk for diversion. This also makes it easier in your practice in that you then can tell the patients -- this is how we manage everyone -- and they do not take it personally. Drug tests are becoming the standard of care since you're ensuring that the patient is taking the medication as prescribed and that there is not diversion. CURES reports are also the standard of care now since you're ensuring that the patient is not doctor shopping.

Keep up with new monitoring methods. For example, one relatively new practice is to have the patients bring their pill bottles in for a "pill count" (sometimes randomly) -- especially for high risk patients -- for additional monitoring. Follow up on any issues raised by family members or the patient (nodding off during the day, sleep issues at night, preoccupation with the prescribed opioid, etc. Use the opioid risk management tools to assess the patient especially since many of these such as SOAPP are available free on the Internet.

For those in California, review the California Medical Board website on pain management periodically for updates on pain guidelines. even though it is behind the times and do not set forth in detail the standard of care and medical necessity -- but it is does set forth the basic law and policies of the Board.  

Chronic pain is complicated and implementing audits for your practice will not only help with any investigation by the Board or DEA but will also help protect yourself against any potential malpractice case and help prevent any potential criminal liability. The law is clear that unless there is legitimate medical purpose for prescribing scheduled narcotics -- the prescription is not legitimate. If the records are not sufficient or if the patients are diverting medications, there can be a criminal or DEA investigation. We have also represented physicians in criminal investigations, search warrants and criminal cases involving pain management medications -- and our goal is to prevent such cases and investigations.

With the issue of prescription overdose deaths featured prominently in the press, physicians need to take these issues seriously even if they are board certified pain management specialists. We help practitioners ensure legitimate patients' access to appropriate pain care and the right of physicians to practice responsible pain medicine.

Posted by Tracy Green, Attorney at Law
Green and Associates,
(213) 233-2260
Email: tgreen@greenassoc.com

Owner of Rehabilitation Facility (CORF) Pleads Guilty To Mail Fraud For Submitting False Claims To Medicare

On June 21, 2013, an owner and chief executive officer of a comprehensive outpatient rehabilitation facility (CORF) pleaded guilty to mail fraud for submitting claims to Medicare for services that were not prescribed by treating doctors. This case had been pending for over two years since the Indictment was filed in March 2011.

This case involves Medicare billings by Fountain Valley Healthcare Center (FVHC), a CORF that Tuan Duc Tran owned and operated since 2001. Mr. Tran admitted that he submitted bills to Medicare based on false claims that Medicare beneficiaries had been referred to FVHC by a physician for physical and respiratory therapy. Mr. Tran admitted that the names of the referring physicians were falsely identified. In order for medical necessity to exist, the patients must be referred by a treating physician and these claims for payment violated Medicare rules because the treating doctors had not referred the beneficiaries for rehabilitation.

Under the plea agreement, Mr. Tran will be required to pay $777,291 in restitution to Medicare. Even though the services were provided, the entire amount collected is to be treated as a loss amount and required to be repaid as restitution. 

U.S. District Judge Josephine Staton Tucker scheduled Mr. Tran’s sentencing for November 8. The mail fraud count carries a maximum statutory sentence of 20 years in federal prison. However, under the plea agreement, Mr. Tran will be at an offense level 16 in the federal sentencing guidelines with a guideline sentencing range of 21 to 27 months although the parties can argue for a sentence outside the guideline range and Judge Tucker is not bound by the parties' agreement in the signed plea agreement.

Attorney Commentary: These health care fraud cases are often difficult for those charged to understand where the services have been provided and were even of benefit to the patients. In this case, part of the government's offer of proof was that Mr. Tran had agreed to be familiar with the Medicare rules and regulations and to comply with them. In his case, the fact that the physician names listed on the superbills were not the patients' referring physicians was one of the facts that shifted this case from a billing error case to a fraud case.

Posted by Tracy Green, an attorney specializing in representing and defending health care professionals in health care fraud, Medicare fraud and Medi-Cal fraud allegations, audits, investigations and charges. Email: tgreen@greenassoc.com  Office: 213-233-2260

Website: Green and Associates, Attorneys at Law 

California Department of Health Care Services (DHCS) Issues Temporary Suspensions Against 16 Alcohol And Drug Treatment Centers - More Suspensions To Come

On July 18, 2013, the California Department of Health Care Services (DHCS) announced temporary suspensions against 16 alcohol and drug treatment centers that are suspected of operating in violation of state and federal Drug Medi-Cal (DMC) laws. The disciplinary measures resulted from preliminary investigations of alcohol and drug treatment programs by DHCS’ Audits and Investigations Division. The investigations included reviews and onsite visits last week of 22 treatment centers.

It is believed that a total of 66 companies have been audited and that additional treatment centers have been suspended since July 18 based on reports by the Los Angeles Times. According to the Times, 29 companies that operate a total of 83 clinics have been temporarily suspended.

As DMC-certified clinics, they are reimbursed by the state for substance use disorder services provided to eligible Medi-Cal members. As a result of the investigations, the 16 centers received temporary suspensions of their Medi-Cal provider numbers, preventing them from submitting claims for reimbursement of services until investigations are complete.

"Temporary" suspensions can take over one year while the criminal investigation is pending. Temporary suspensions can result in the facility closing given that most of these programs are fully reliant on Medi-Cal payments. All 16 cases have been referred to the California Department of Justice for further investigation, which may lead to permanent sanctions (such as termination of provider number) or the filing of a criminal action.  However, the temporary suspension can be lifted early if the treatment centers can show that there is not reliable evidence of fraud or abuse. This action is the first phase of DHCS’ ongoing review of DMC, which came fully under its purview earlier this month.

 Allegations received by DHCS regarding DMC include claims that providers have hired individuals who are on the federal list of excluded providers. These individuals have been convicted of a felony or misdemeanor involving fraud or abuse in any government program, or they have been convicted of neglect or abuse of a patient while providing a health care item or service. Some centers are suspected of violating state and federal laws by providing services that are not deemed medically necessary and of fraudulently billing DMC for services that were not rendered. DHCS is working with counties, which contract directly with these clinics to provide services, to resolve any discrepancies between the actions of the centers and their billing of Medi-Cal.

On July 1, 2013, all substance use disorder programs from the Department of Alcohol and Drug Programs completed their transfer to DHCS. This allows for better coordination of the licensing, certification and program management of substance use disorder services to the benefit of individuals with substance use disorders.

Attorney Commentary Having represented Medi-Cal providers, including alcohol and drug treatment centers, who received temporary suspensions, it is critical to act quickly in assessing the merit of the allegations.  There are opportunities to seek a settlement conference and resolution with the Department especially where the allegations are weak or with little merit.

Posted by Tracy Green, Attorney
Green and Associates