Saturday, March 5, 2016

Southern California Prosecution of More Than Ten Individuals For Billing Medicare for Physical Therapy Services Never Provided

Physical therapy services billed to Medicae are governed by a wide array of rules and regulations. These rules govern ownership, documenting services billed, which services are covered, where the services are provided, payment of referral fees, management arrangements, and every facet of the business. Anyone operating a physical therapy clinic needs to be aware of and compliant with rules and regulations in order to avoid being charged years later with Medicare fraud. 

The U.S. Department of Health and Human Services – Office of Inspector General (OIG) and the U.S. Attorney's Office are aggressively pursuing physical therapy clinics, businesses that provide management and billing for them, and marketers who provide patients to the clinics. Many of the cases being filed now relate to claims submitted years ago. It is not uncommon for charges to be filed right before the expiration of the statute of limitation.

In recent months more than ten individuals have been charged with Medicare fraud relating to physical therapy. A number of these cases include billing massage and acupuncture as physical therapy in the Korean American community which is not covered under Medicare. The cases also involve management arrangements between clinics and other individuals or entites that were billing.

The cases involve numerous clinics in the Los Angeles and Orange County areas. One group of criminal cases revolve around clinics called Rehab Dynamics, RSG Rehab and Innovation Physical Therapy that operated at various locations in Los Angeles and Orange counties. These clinics were allegedly owned and operated by Joseff Sales, a licensed physical therapist, and Daniel Goyena, a licensed physical therapist assistant – who were indicted in October. Mr. Sales pleaded guilty on January 25, and Goyena pleaded guilty on December 17. Both men pleaded guilty to health care fraud and paying illegal kickbacks before United States District Judge Dean D. Pregerson, who is scheduled to sentence them later this year.

A chiropractor David Y. Kim is a former owner/operator of New Hope Clinic was indicted and he is currently a fugitive who is currently being sought by federal authorities. Mr. Kim is charged with four counts of health care fraud, five counts of receiving illegal kickbacks and two counts of aggravated identity theft. An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

Another individual Simon Hong of Brea, who owned several clinics in Walnut, Torrance and other locations operating under companies called Hong’s Medical Management, CMH Practice Solution, and HK Practice and Solution was charged in January 2016. The case against Mr Hong alleges that Medicare beneficiaries who came to his clinics sometimes received massages, acupuncture or therapy treatment plans, but they did not receive any services that are reimbursable under Medicare rules. Nevertheless, according to the indictment, from the spring of 2009 until November 2013, bills were submitted to Medicare that claimed the “patients” had received physical therapy treatment from Rehab Dynamics and RSG Rehab, which led Medicare to pay nearly $3 million. Mr. Hong is charged with eight counts of health care fraud, nine counts of receiving illegal kickbacks and two counts of aggravated identity theft.

Previously in this investigation, four other defendants pleaded guilty and are pending sentencing. They are: (1) Marlon Songco, the president of Rehab Dynamics, pleaded guilty in June to conspiracy; (2) Eddieson Legaspi, an employee of Rehab Dynamics, pleaded guilty in August to conspiracy to commit health care fraud; (3) Ohun Kwon, the owner/operator of E.K. Medical Management, which referred patients to Rehab Dynamics, pleaded guilty in August to conspiracy to commit health care fraud; and (4) Leovigildo Sayat, an employee of RSG Rehab, pleaded guilty in October to conspiracy to commit health care fraud.

The charge of conspiracy carries a statutory maximum sentence of five years in federal prison, conspiracy to commit health care and the substantive health care fraud counts carry a maximum sentence of 10 years in prison, the kickback counts carry a maximum sentence of five years in prison, and aggravated identity theft carries a mandatory two-year sentence.

Additional prosecutions and plea agreements are expected over the next six months. Anyone operating without a compliance plan, especially where there is a high percentage of Medicare billing, is not appreciating the risk that can affect the business and the owners and licensed therapists for years to come.


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