On March 26, 2009, Dr. Carmen Del Cueto and chemist Alexis Dagnesses each pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Paul C. Huck in the Southern District of Florida. Both defendants admitted to working at Midway Medical Center Inc. (Midway), a Miami clinic that purported to specialize in the treatment of patients with HIV.
According to plea documents, Del Cueto was a co-owner of and practicing physician at Midway. Del Cueto and her co-conspirators billed Medicare routinely for services that were medically unnecessary and, in many instances, never provided. Del Cueto admitted to purchasing only a small fraction of the medication that was purportedly being administered to Midway’s patients.
Most of the services allegedly provided to patients at Midway were billed to the Medicare program as treatments for a diagnosis of thrombocytopenia, a disorder involving a low count of platelets in the blood. According to court documents, none of Midway’s patients actually had low blood platelet counts. To make it appear that the patients actually had low platelet levels, Del Cueto admitted that she and her co-conspirators used chemists, including Dagnesses, to manipulate the blood samples drawn from Midway’s patients before the blood was sent to a laboratory for analysis. In her plea, Del Cueto admitted to ordering that patients at Midway receive medications to treat thrombocytopenia despite knowing that the laboratory results had been falsified and the patients did not actually have any such condition.
Midway was not the only clinic where Del Cueto purported to treat HIV patients with injection and infusion therapies. In her plea, Del Cueto admitted that she engaged in substantially similar fraudulent conduct at Diagnostic Medical Center Inc. (Diagnostic), another Miami-area infusion clinic. At Diagnostic, Del Cueto admitted that she and her co-conspirators also billed the Medicare program for HIV injection and infusion services that she knew were medically unnecessary and, in some instances, never actually provided. At the two clinics, Del Cueto admitted to causing the submission of approximately $9.5 million in fraudulent claims to Medicare.
Dagnesses admitted that he would obtain vials of blood drawn from Midway’s patients and place those vials in a blood centrifuge. After rotating the blood in the centrifuge for approximately 15 minutes, the blood would separate into its component parts, enabling Dagnesses to extract the platelets from the sample. Dagnesses would then return the adulterated blood to his co-conspirators at Midway, who would send it to a laboratory for testing. Dagnesses admitted that he was generally usually paid $1,000 for every vial of blood that he tainted for his co-conspirators at Midway. Dagnesses admitted he was aware that the purpose of tainting the blood was to obtain false laboratory reports for Midway’s medical files, which would make it appear that the medications allegedly provided at Midway were medically necessary, when in fact they were not necessary.
Attorney Comments - The Importance Of Compliance Plans For All Health Care Providers: The case was brought as part of the Medicare Fraud Strike Force. The government contends that since the inception of MFSF operations, federal prosecutors have indicted 106 cases with 196 defendants in Miami and Los Angeles. Collectively, these defendants billed the Medicare program for more than $577 million. We can expect significantly more cases to be filed in California and Florida in the next few years.
According to plea documents, Del Cueto was a co-owner of and practicing physician at Midway. Del Cueto and her co-conspirators billed Medicare routinely for services that were medically unnecessary and, in many instances, never provided. Del Cueto admitted to purchasing only a small fraction of the medication that was purportedly being administered to Midway’s patients.
Most of the services allegedly provided to patients at Midway were billed to the Medicare program as treatments for a diagnosis of thrombocytopenia, a disorder involving a low count of platelets in the blood. According to court documents, none of Midway’s patients actually had low blood platelet counts. To make it appear that the patients actually had low platelet levels, Del Cueto admitted that she and her co-conspirators used chemists, including Dagnesses, to manipulate the blood samples drawn from Midway’s patients before the blood was sent to a laboratory for analysis. In her plea, Del Cueto admitted to ordering that patients at Midway receive medications to treat thrombocytopenia despite knowing that the laboratory results had been falsified and the patients did not actually have any such condition.
Midway was not the only clinic where Del Cueto purported to treat HIV patients with injection and infusion therapies. In her plea, Del Cueto admitted that she engaged in substantially similar fraudulent conduct at Diagnostic Medical Center Inc. (Diagnostic), another Miami-area infusion clinic. At Diagnostic, Del Cueto admitted that she and her co-conspirators also billed the Medicare program for HIV injection and infusion services that she knew were medically unnecessary and, in some instances, never actually provided. At the two clinics, Del Cueto admitted to causing the submission of approximately $9.5 million in fraudulent claims to Medicare.
Dagnesses admitted that he would obtain vials of blood drawn from Midway’s patients and place those vials in a blood centrifuge. After rotating the blood in the centrifuge for approximately 15 minutes, the blood would separate into its component parts, enabling Dagnesses to extract the platelets from the sample. Dagnesses would then return the adulterated blood to his co-conspirators at Midway, who would send it to a laboratory for testing. Dagnesses admitted that he was generally usually paid $1,000 for every vial of blood that he tainted for his co-conspirators at Midway. Dagnesses admitted he was aware that the purpose of tainting the blood was to obtain false laboratory reports for Midway’s medical files, which would make it appear that the medications allegedly provided at Midway were medically necessary, when in fact they were not necessary.
Attorney Comments - The Importance Of Compliance Plans For All Health Care Providers: The case was brought as part of the Medicare Fraud Strike Force. The government contends that since the inception of MFSF operations, federal prosecutors have indicted 106 cases with 196 defendants in Miami and Los Angeles. Collectively, these defendants billed the Medicare program for more than $577 million. We can expect significantly more cases to be filed in California and Florida in the next few years.
A case like this HIV-infusion scheme is extreme. It would seem relatively simple to avoid engaging in this type of fraud. The harder cases are where physicians are not compliant with rules and regulations, violate the anti-kickback statute or are affiliated with others who commit fraud. One advantage of having an actual compliance plan is that it provides a safe harbor to avoid having billing errors or other arrangements characterized as criminal.
The collateral consequence of a physician or licensed health care provider is going to be the conviction, risk of going to prison, the loss of license, being excluded from Medicare for 5 years or more (even if the license is saved), being excluded from Medi-Cal (Medicaid) for an indeterminate number of years, and having the conviction reported to the National Practitioner Data Bank. There are many health care providers who did not set out to commit fraud but violated rules and regulations or did not have sufficient oversight of their practices or businesses. Compliance plans should be a prerequisite for anyone who is billing the government for their services.
Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings, with a specialty in health care providers.
