Remember: Alteration, Destruction Or Falsification Of Medical Records During Audit Can Result In A Separate Federal Criminal Charge. Case Example: Physician, Manager & Biller Of Physical Therapy Clinic Charged With Medicare Fraud, Kickbacks & Falsification of Records.

A physician who was billing for physical therapy at three clinics and his office manager (who was also a co-signer on the clinics' bank accounts) and the medical biller were charged on May 2013 in the Eastern District of New York in Case No. CR-13-0295. They were charged with Medicare fraud, violating the anti-kickback statute and creating fake medical documents to conceal fraudulent claims submitted to Medicare that were induced by kickback, not medically necessary and not provided. The defendants are presumed innocent and an Indictment is not evidence of wrongdoing.

Although this case has allegations that most medical and health care providers would not do in their practice, the issue of altering or creating records is becoming a more common charge in health care cases even where there is no provable fraud. The defendants here were charged with knowingly concealing, covering up, falsifying and making false entries in records relating to the treatment of Medicare beneficiaries, with the intent to impede, obstruct and influence the investigation and case within the jurisdiction of a department and agency of the United States, specifically, the Department of Health and Human Services. This is a violation of 18 U.S.C. Section 1519. Thus, any destruction, alteration or falsification of records in Medicare or Medicaid audits could result in a felony charge. 

Kickback Allegations.
In addition, the kickback allegations are a reminder for providers to adhere to regulations when providing patients items such as gift cards and lunches.  It is alleged that the defendants and others did the following:  (a) they artificially increased demand for medical services by providing Medicare beneficiaries with free goods and services such as massages, facials, lunches, gift cards and recreational classes; and (b) submitted and caused to be submitted claims to Medicare for medically unnecessary services to beneficiaries, such as office visits, physical therapy, lesion destruction and electrical stimulation treatment, which were medically unnecessary, not provided and otherwise did not qualify for reimbursement by Medicare. 

As for the kickbacks, it was alleged that the defendants paid kickbacks to patients and to marketers. For the patients, it was alleged that the defendants induced Medicare beneficiaries to attend three clinics with the promise of free, non-medical inducements, such as: (i) massages and facials, (ii) recreational classes, such as dancing classes; (iii) social events, such as birthday parties, (iv) free lunch, (v) gift cards to grocery stores, (vi) and prizes. It was alleged that once the Medicare beneficiaries arrived at the clinics, they were required to give their Medicare numbers to staff members and to see a doctor, regardless of medical need, in order to receive the free, non-medical inducements.

It was also alleged that the once there were collections, the defendants paid a pre-determined percentage of the money from Medicare to, among others, marketers Elaine Kim and Gilbert Kim. It was alleged that the nature of these payments were concealed by fake invoices with fictional expenses described as "rent," equipment and furniture," "management," "medical records and supplies," "repair and maintenance," "marketing," "telephone and cable,"  "supplies," "administration," and "management and operation."

Physical Therapy Allegations.
As for the physical therapy, the allegations that those services were induced by free goods and services, not medically necessary and not provided. For example, it was alleged that physical therapists at these three clinics did not perform evaluations and did not perform physical therapy on Medicare beneficiaries. Rather, beneficiaries were ushered to unlicensed massage therapists for massages, and fraudulent paperwork was completed purportedly reflecting that actual physical therapy services had been provided to the beneficiaries by licensed physical therapists, when such services had not been provided. The government also determined when the physician had been outside of the United States and charged dates when he was outside the U.S. and there was billing under his number and supervision. 

Obstruction Allegations During Audit.
The government alleges that the defendants engaged in a fraudulent scheme to obstruct the functions of the Department of Health and Human services ("HHS") by creating fake medical documents to conceal fraudulent claims submitted to Medicare that were induced by kickback, not medically necessary and not provided.

It was alleged that after one of the clinics received letters from Medicare asking for documentation supporting medical services and after an unannounced visit, fake medical documents were created in support of purported chiropractic services.  Those fake medical documents were allegedly sent to Medicare in order to deceive Medicare and to obstruct the lawful function of HHS. It was also alleged that one of the defendants falsely told the investigators that the medical records could not be provided because the services were performed at a different location.

This case is pending in the Eastern District of New York (Brooklyn) and no trial date is set yet.

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