Drug Rehab Industry Reacts to Second Degree Murder Charges And Dependent Adult Abuse Charges Filed Against Murietta Drug Rehab Center and Four of Its Employees

A jolt has been sent through California's large drug and alcohol rehabilitation industry—an industry with more than 1,500 facilities across the state. 

As reported by the Los Angeles Times, the California State Attorney General's office has pursued second-degree murder charges against A Better Tomorrow and four of its employees relating to the death of a client in 2010.  This is the first time in California history that a drug and alcohol rehabalitation corporation has been accused of murder.

The criminal case against A Better Tomorrow and its employees is a warning to California's treatment centers. The prosecutor has argued that the company, in its drive for profit, accepted a client it was not prepared to care for (he was on oxygen and had just been discharged from a hospital for pneumonia) and killed him by failing to refill his oxygen and allowing employees with little or no medical training to give him drugs that were not prescribed by a physician (and were just in their stock of leftover drugs) that made it harder for him to breathe. 

Benefield was the fourth person to die after checking into the facility in a little over two years from 2008 to 2010 and that is what the State will attempt to use to prove recklessness or implied malice. There was a civil case that settled and it appears that the coroner found the death to be from natural causes which will cause problems for the prosecution.

It raises an issue for the industry which has gotten used to admitting addicts—some of whom have serious health issues without a clearance from a physician. If the treatment center was for eating disorders, there would be physical clearances and medical staff on site. The industry also has changed a great deal since 2010 when this death happened. It was 6 years ago but the prosecutors are seeking to ensure that the drug and alcohol rehabilitation industry recognizes how complex the medical conditions of addicts can be especially older ones with other health issues.

This was tragic and I cannot imagine that anyone intended that the client's health would be endangered but the law of uninended consequences can occur. Having physical and medical clearances before accepting clients to residential treatment programs will be the new norm. Addicts, even young ones, can have enlarged hearts and need to have EKGs and physicals before they are sent for detox and treatment at facilities that do not have full-time medical staff.

Texan Physician Pleads Guilty To Illegally Prescribing Pain Medication Norco After Search Warrant and Undercover Agent Visit.

The DEA and State Medical Boards are continuing to send in undercover agents to physicians to determine whether they are conducting physical examinations that comply with the standard of care before prescribing pain medications to patients. A recent Texan case illustrates how these undercover visits can result in a criminal prosecution.

On September 24, 2014, in Longview, Texas, a Board Certified Physical Rehabilitation and Rehabilitation, with over 15 years' experience in pain management, Dr. Sameer A. Fino evaluated an undercover law enforcement agent who was posing as a new patient.  During that visit, Dr. Fino did not perform any physical examination of the agent.  After meeting with the agent for approximately six minutes, Dr. Fino wrote the undercover agent a prescription for 60 units of Norco ® 10 mg, which is an opioid pain medication containing hydrocodone.  

The DEA targeted Dr. Fino due to his prescribing patterns and for other reasons. Search warrants by the DEA and Health and Human Services Agents were later executed on Dr. Fino's office and a pharmacy that was in the same building. At that point, he was the target of a criminal investigation. 

In order to resolve his criminal investigation and a related civil action, on February 17, 2016, Dr. Fino pleaded guilty before United States Magistrate Judge John D. Love for dispensing controlled substances outside the usual course of professional practice and not for a legitimate medical purpose.

Owner of Portable Diagnostic Provider Convicted of Health Care Fraud Where X-Ray, MRI and Ultrasound Interpretations Not Performed By Physicians. Finding That Two Patients' Deaths Caused By X-Rays Not Being Reviewed By Radiologist

One of the issues with diagnostic providers is that with electronic reports there are times when radiologists become concerned that the IDTF is using technicians to do draft reports and have someone sign their signatures to radiology reports without having a radiologist read the reports. Recently such a case was prosecuted and went to trial in Maryland.

On February 17, 2016, a federal jury convicted the owner of Alpha Diagnostics, Rafael Chikvashvili of multiple felonies: health care fraud and wire fraud conspiracy, healthcare fraud (including two counts of health care fraud resulting in death); wire fraud, false statements and aggravated identity theft. The total billings to Medicare and Medicaid were more than $7.5 million.  

Judge Bredar ordered that Mr. Chikvashvili be immediately taken into custody with a detention hearing to be held to determine whether he will remain in custody pending his sentencing.

According to the evidence presented at the two-and-a-half week trial, Mr.Chikvashvili formed Alpha Diagnostics Services, Inc., which later became Alpha Diagnostics, LLC, in 1993, and was the Managing Member, Authorized Official, Managing Employee, President and Chief Executive Officer for Alpha Diagnostics. Mr. Chikvashvili holds a PhD in mathematics, but was never a medical doctor or licensed physician. 

Timothy Emeigh was the Vice President in charge of Operations at Alpha Diagnostics and was a licensed radiologic technologist. Timothy Emeigh previously pleaded guilty to health care fraud and is awaiting sentencing.

Alpha Diagnostics was a portable diagnostic services provider, principally of X-rays, but also provided ultrasound tests, and cardiologic examinations.  Alpha Diagnostics’ clients included nursing homes whose patients were covered by Medicare and Medicaid. Alpha Diagnostics operated in Maryland, Delaware, Pennsylvania, Virginia and the District of Columbia, but was headquartered in Owings Mills, Maryland, where Mr. Chikvashvili worked full time.

Based on the evidence, the jury found that from 1997 through October 2013, Mr. Chikvashvili conspired with others to defraud Medicare and Medicaid by: 

- creating false radiology, ultrasound and cardiologic interpretation reports; 

Doctor Charged With Accepting Cash From Sales Representatives For Referrals To Lab Companies for Blood and DNA Testing

A New Jersey doctor with offices in Toms River, New Jersey, was indicted for accepting approximately $25,000 in cash bribes over a one year period from sales representatives in exchange for referring his patients to two lab companies that performed blood and DNA testing. It is contended that the laboratories did not know of or approve this arrangement.

On February 12, 2016, Dr. Vincent Destasio was indicted by a federal grand jury in Newark on one count of conspiracy to accept cash bribes and two substantive counts of accepting cash bribes. The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

According to the indictment and statements made in court, Dr. Destasio was paid cash kickbacks by two sales representatives (Daniel Gilman and Kenneth Robberson) who were partners operating PROMED, which was a marketing and sales company specializing in blood testing laboratories and DNA laboratory testing companies. 

Sales reps Gilman and Robberson have already both pleaded guilty to an information charging them with conspiracy to bribe a physician and are awaiting sentencing.  They admitted in their plea that from March 2014 through May 2015, Gilman and Robberson solicited Dr. Destasio by paying him cash bribes for referring patient lab work to two separate laboratories for which Gilman and Robberson provided marketing and sales. 

San Diego Physician Convicted of Eight Counts of Tax Evasion at Trial In Using A Trust to Not Pay Taxes

On January 28, 2016, a federal jury in San Diego convicted Dr. William Bailey, a  physician of osteopathic medicine, on eight counts of tax evasion (26 United States Code Section 7201 B).

According to evidence presented at trial, between 2004 and 2011 Dr. Bailey earned over $1.1 million in compensation for his services as a physician at two different local clinics and paid no taxes. Dr. Bailey allegedly concealed his income by having his paychecks directed to an account in the name of a trust.

In his own testimony at trial, Dr. Bailey admitted that he cut and pasted other documents to create the trust himself and signed the name of another person as the creator of the trust. As the grantor, sole trustee and also the beneficiary of the so-called trust, the income was attributed to Dr. Bailey as an individual.

Dr. Bailey spent the $1.1 million he deposited in the trust account to pay his personal expenses, including the purchase of a home, two cars, a time share and approximately $400,000 in credit card bills. Despite earning a significant income, Dr. Bailey reported no taxable income on the tax returns he filed. Evidence presented at trial showed that Dr. Bailey owed a total of $315,000 in unpaid taxes for the period from 2004-2011.

Dr. Bailey is scheduled to be sentenced on April 20, 2016, at 9:00 a.m., before U.S. District Judge Cathy A. Bencivengo. The maximum penalty on each count is 5 years imprisonment and a potential fine of $250,000 per count.  

Florida Health Care Clinic "Consultant" and Biller Pleads Guilty in Marketing Partial Hospitalization Program And Directing Payments to Patient Brokers in Exchange for Patient Referrals

In the past, aggressive health care entities would seek to avoid the limits of federal and state anti-kickback statutes and federal STARK laws by creating consulting, marketing and outreach agreements that appeared on their face to be compliant. 

Federal investigations are filing health care fraud cases based on the marketing arrangements that when reviewed reveal payments for the referral of patients with essentially no other "marketing" or services performed. 

When the marketing entities are investigated, they tend to show cashed checks, payments to others for referral of patients, and other evidence of payments for patients. Legal marketing payments are not supposed to include payments for the referral of patients.

A recent case shows that the government is being aggressive on illegal marketing arrangements.  Nery Cowan, a former Miami health care clinic consultant and Medicare biller, pleaded guilty on January 14, 2016 in connection with her marketing role for a defunct Miami-area health care provider. She pleaded guilty before U.S. District Judge Beth Bloom of the Southern District of Florida to one count of conspiracy to commit money laundering. Ms. Cowan will be sentenced by Judge Bloom on March 25, 2016.  

According to the factual basis, Ms. Cowan served as a consultant and Medicare biller for Greater Miami Behavioral Healthcare Center Inc. (Greater Miami), a partial hospitalization program (PHP) that purported to provide intensive treatment for severe mental illness. According to court documents, from 2006 through 2014, Greater Miami billed Medicare approximately $63 million for purported mental health services.

Ms. Cowan was involved in directing the payment of kickbacks to patient brokers and others in exchange for Medicare beneficiary referrals. Ms. Cowan admitted that she received a percentage of the Medicare reimbursement from Greater Miami’s PHP as compensation. This means that getting the percentage as a biller could be problematic when there is illegal referral fees being paid.

Ms. Cowan admitted that she, along with co-defendants Dean Butler and Irina Mora, took great lengths to conceal kickback payments to shell companies owned by “patient brokers” who, on behalf of Greater Miami, solicited Medicare beneficiaries from assisted living facilities, halfway houses and drug courts located throughout the Southern District of Florida.  

Ms. Cowan admitted that she, Butler and Mora disguised these monthly kickbacks as “outreach” or “marketing” payments through HNB-Stell Care Inc., a sham staffing company. On Nov. 30, 2015, Judge Bloom sentenced Mr. Butler to 16 years in prison and Ms. Mora to nine years in prison following their guilty pleas.

Posted by Tracy Green, Esq.

Former Owner and Operator of California Durbable Medical Equipment Supply Company Sentenced in Medicare Fraud Case

The power wheelchair Medicare fraud cases have still not run their course. The latest one involves the former owner and operator (husband and wife) of a durable medical equipment (DME) supply company based in Long Beach, California. 

On January 30, 2016 they were sentenced for their roles in a $1.5 million Medicare fraud case following their conviction at trial. At trial, on October 15, 2015, a federal jury convicted both of one count of conspiracy to commit health care fraud and five counts of health care fraud after trial. 

Amalya Cherniavsky and her husband, Vladislav Tcherniavsky, both of Long Beach were ordered to pay $614,418 in restitution.  U.S. District Judge Terry J. Hatter Jr. of the Central District of California ordered Mr. Tcherniavsky to serve 51 months in prison. His wife Mrs. Cheriavsky received a probation sentence.   

The evidence at trial demonstrated that Mrs. Cherniavsky owned JC Medical Supply, a purported durable medical equipment supply company that she co-operated with her husband Mr. Tcherniavsky.  Evidence further showed that the defendants paid illegal kickbacks to patient recruiters in exchange for patient referrals and paid kickbacks to physicians for medically unnecessary prescriptions—primarily for expensive, power wheelchairs—which the defendants then used to support bills to Medicare. 

With the referral fees to patient recruiters and lack of medical necessity, the government used that to argue that the claims were false and fraudulent. Between 2006 and 2013, the government presented evidence that the DME submitted $1,520,727 in claims to Medicare and received $783,756 in reimbursement for those claims.

Posted by Tracy Green, Esq.

  

Boston Dentist to Pay $650,000 in Civil Settlement for Improper Medicaid Billing

A Boston dentist has agreed to pay $650,000 to the state’s Medicaid program (MassHealth) to resolve allegations of improperly billing for dental work at her offices in Everett, South Boston.

The January 29, 2016 settlement resolves allegations that from February 2007 through July 2012, Dr. Ekaterina Mamulashvili and her professional dental practices improperly and frequently used multiple oral examination codes to bill MassHealth for services received by the same patients on the same day.

The matter was referred to the Attorney General's (AG) Office by MassHealth after an audit uncovered concerns about Dr. Mamulashvili’s billing practices. An audit of dentists and dental practices done by the State Auditor also found issues with billing for oral examinations, including with Dr. Mamulashvili’s practices.

The AG’s Office conducted an extensive investigation into Dr. Mamulashvili and her professional dental corporations, Everett Dental Management Corporation, Sameka Dental Management Corporation in South Boston, and Malden Dental Management Center, Inc.

Under the terms of the civil settlement, Mamulashvili and her businesses will pay MassHealth $650,000 as restitution for improper billing. The settlement also requires that Mamulashvili, her employees to review and comply with all applicable state and federal statutes, and all regulations governing participation in MassHealth.

These audits in California are handled by Delta Dental and a civil settlement is certainly preferable to any criminal investigation or referral. 

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

Check Out OIG’s Newly Updated List of Corporate Integrity Agreements to Understand Recent Compliance Issues

In keeping up on the latest compliance issues, reporting issues, and the government's view on health care law issues, one of a health care lawyer's regular tasks is to review the latest compliance agreements reached by Office of Inspector General (OIG) for Health and Human Services. 

OIG negotiates corporate integrity agreements (CIA) with health care providers and other entities as part of the settlement of Federal health care program investigations arising under a variety of civil false claims statutes. Providers or entities agree to the obligations, and in exchange, OIG agrees not to seek their exclusion from participation in Medicare, Medicaid, or other Federal health care programs. This is also usually part of an agreement not to pursue or file criminal charges.

We also have clients review them in order for them to understand the government's view on various business practices in health care. If your business is interested, here is the OIG's posted list of corporate integrity agreements.  They are in PDF and can be downloaded and reviewed. 

CIAs have many common elements, but each one addresses the specific facts at issue and often attempts to accommodate and recognize many of the elements of preexisting voluntary compliance programs.

A comprehensive CIA typically lasts 5 years and includes requirements to:

 1. hire a compliance officer/appoint a compliance committee;

 2. develop written standards and policies; 

 3.  implement a comprehensive employee training program; 

 4.  retain an independent review organization to conduct annual reviews; 

 5.  establish a confidential disclosure program; 

 6.  restrict employment of ineligible persons; 

 7.  report overpayments, reportable events, and ongoing investigations/legal proceedings;      and 

 8.  provide an implementation report and annual reports to OIG on the status of the entity's compliance activities.

Keep compliant and make sure that your health care entity does not end up on this list.

Posted by Tracy Green, Esq. 

West Virginia Physician Pleads Guilty to Federal Illegal Prescribing and Health Care Fraud

The number of prescribing cases filed in federal courts increases especially in areas that have been hit hard by prescription drug addiction.  Last month, on January 7, 2016, Jose Jorge Abbud Gordinho, M.D., of West Virginia, pleaded guilty in federal court to illegally prescribing the pain medication hydrocodone. Dr. Gordinho also pleaded guilty to defrauding Medicare and Medicaid by submitting materially false claims for medical services that were not medically necessary.

United States District Judge Irene C. Berger set Dr. Gordinho’s sentencing for April 26, 2016, in Beckley. Dr. Gordinho faces up to 10 years in federal prison, a $1,250,000 fine, and restitution to Medicare and Medicaid. Additionally, as part of the plea agreement, he will permanently surrender his DEA Certificate of Registration, ensuring that he will no longer be permitted to prescribe controlled substances. The sentence will be determined by Judge Berger and will depend on numerous factors and advisory guidelines.

Dr. Gordinho admitted that he routinely prescribed pain pills for illegitimate purposes and in a manner that was outside the bounds of medical practice. Dr. Gordinho further admitted that he defrauded Medicare and Medicaid when he sought and received payment for office visits, services, and prescriptons related to his illegal prescribing practices.