Patient Recruiter for Miami Home Health Agencies Convicted of Receiving Health Care Kickbacks and Conspiracy

A patient recruiter for several Miami-area home health agencies was convicted on April 1, 2016 for his role in a fraud and kickback scheme that resulted in the submission of millions of dollars in false and fraudulent claims to Medicare.

After a jury trial, Carlos Rodriguez Nerey was convicted of one count of conspiracy to defraud the United States and pay and receive health care kickbacks and one count of receiving health care kickbacks.  According to evidence presented at trial, Mr. Nerey presented that he worked at a staffing company called Sweet Life Staffing Inc. but was in fact a patient recruiter for Dand D Home Health Inc. and Mercy Home Care, Inc., two home health care agencies in Miami.  Evidence at trial was that Mr. Nerey's company received approximately $250,000 for payments for the referrals of patients. The Medicare billing for the referred patients involved more than $2 million in payments to D and D and Mercy.  Sentencing is set for May 27, 2016 before U.S. District Judge Gayles.

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

Chicago Marketer Convicted of Violating Anti-Kickback Statute for Receiving Money in Exchange for Marketing and Referring Elderly Patients to Home Health Company. Marketing Is Risky Business Unless Done Right.

Marketing for home health businesses and other health care providers is subjected to many federal and state statutes and regulations. Violation of those laws is a crime. Often people will ask "how can marketing can be a crime where the services were provided?" 

The marketing is so pervasive in the home health and hospice businesses that it is often difficult to persuade those in the business that just because everyone engages in "marketing" does not mean that it is legal. I spend hours in privileged attorney-client meetings trying to convince home health clients that their marketing model must be changed or they risk criminal prosecution, loss of licenses and their business. Often they do not know any other way of growing and keeping their business and do not understand the importance of compliance. It is an outdated model and a risky one. I would rather represent someone in compliance than work on a criminal investigation or Indictment but business models are not easy to change.

The federal and state governments are taking an aggressive stance towards marketing in home health.  This case shows how these cases are prosecuted.  Out of one home health business there were 11 convictions of marketers, nurses, doctors, office managers and owners of the home health business. The services were provided. That was not the issue. The issue was the marketing. Plain and simple.

On Mach 22, 2016, after a three-day "bench trial" where a jury was waived, U.S. District Judge Darrah convicted a Chicago marketer Jenette George of taking illegal payments in exchange for referring elderly patients to an Illinois home healthcare company Rosner Home Healthcare Inc. (Rosner). The government used a cooperating defendant to tape and record Ms. Rosner in order to provide hard evidence against her.

Ms. George was convicted on two counts of violating the federal Anti-Kickback Statute, and one count of conspiracy to violate the statute. Sentencing is scheduled for August 10, 2016, at 1:30 p.m.

Between January 2008 and July 2012, Rosner officials paid marketing payments (which the government calls "kickbacks and bribes") to doctors, marketers, medical office employees and nurses to refer patients to Rosner.  The marketing payments did not comply with the law which makes each of the billings that arose out of the marketing a "false claim." The government's view is that the referrals enabled Rosner to bill Medicare for home healthcare treatment that it subsequently provided.

“Physicians did not refer patients to Rosner; Defendant [Jenette George] did,” Judge Darrah wrote in an opinion supporting the verdict. Thus, Judge Darrah saw that while the physicians wrote referrals for home health a marketer decided what agency was selected based upon the amount of compensation she received rather than what is based for the patient. 

This is part of the reasoning behind the anti-kickback laws. One other reason for the rules is that marketers (and home health companies) may encourage physicians to order home health services that are not medically necessary so they can earn more  income.

Rosner has since closed. Ms. George operated Ttenej Senior Referral Agency, which provided senior citizens with referrals to home healthcare firms in the Chicago area.  Evidence at her three-day bench trial in October 2015 revealed that Ms. George received approximately $500 from Rosner for each patient she referred to the company.  

In one undercover surveillance video presented at trial, Ms. George is seen counting out the cash that she received from Edgardo Hernal, a former Rosner employee who by then was cooperating with federal authorities.  Evidence at trial further showed that nurses at Rosner regularly put false information into patient charts to make Rosner’s services appear to be medically necessary, and to make patients appear to be sicker than they actually were.

California Podiatrist Sentenced to 3 Years for Federal Health Care Fraud for Upcoding, Providing Services Not Medically Necessary or Performed By Unlicensed Staff, and Altering Records

On April 15, 2016, a podiatrist Dr. Neil Van Dyck of Roseville, California was sentenced by United States District Judge Garland E. Burrell Jr. to three years in prison and a $10,000 fine for committing healthcare fraud. This sentence came after a guilty plea on October 23, 2015.  

According to the plea agreement and court documents, Dr. Van Dyck was a California-licensed podiatrist who operated a podiatry practice in Roseville called Placer Podiatry. The issue in Dr. Van Dyck's case was whether the “spa”-like or routine foot care treatments were properly billed to Medicare, Medi-Cal, Tricare and other private insurers.  

The government and insurers alleged that Dr. Van Dyck falsely claimed that he performed more expensive procedures than he actually performed, or that the routine foot care that was provided was justified because of illness or symptoms that were not present. it was alleged that often the treatments were performed by unlicensed staff, sometimes when Dr. Van Dyck was not present at his practice. Additionally,  it was alleged that Dr. Van Dyck altered a single-use skincare patch by cutting it into pieces and billed Medicare for multiple applications. 

As typical in these cases, responses to audits are used to show scienter or criminal intent. The government alleged that in 2011, in response to a request for documents from an investigator for Medicare, Dr. Van Dyck altered patients’ medical records to justify his bills. Medicare, Medi-Cal, Tricare, and the private insurers paid Van Dyck over $1 million for his claims.  

There was a forfeiture component to this case.  Judge Burrell previously entered an order requiring Dr. Van Dyck to forfeit $1.2 million from a retirement account into which proceeds of the healthcare billing were traced. The date for a further restitution hearing is set for May 27, 2016.


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

Marin Doctor Pleads Guilty To Prescribing Controlled Substances (Oxycodone, Methadone, Hydrocodone) Outside Course of Professional Practice and Without Legitimate Medical Purpose

On March 9, 2016, Dr. Michael Roger Chiarottino pleaded guilty in federal court in Oakland to distribution of oxycodone outside the usual course of professional practice and without a legitimate medical purpose.

In pleading guilty, Dr. Chiarottino, 67, of San Rafael, admitted that on six occasions between February 12, 2013, and March 6, 2014, he prescribed large quantities of controlled substances (including oxycodone, oxymorphone, hydromorphone, methadone, and hydrocodone) to undercover DEA agents posing as patients in exchange for cash. 

On each occasion, Dr. Chiarottino admitted that he failed to conduct an appropriate medical examination of, or obtain a sufficient patient medical history from, the undercover agent to support a prescription for such a large quantity of narcotics. 

Georgia Doctor Pleads Guilty to False Billing to Private Insurers and Medicare for Surgical Monitoring Performed by Medical Assistant

Analysis of billing data is leading to more investigations, audits and prosecutions. Anonymous complaints to the HHS-OIG Hotline at 800-HHS-TIPS are also an increased source of investigations. One recent health care fraud case against a physician came about due to both analysis of billing data and anonymous complaints to the HHS hotline.

On March 25, 2016, Dr. Robert E. Windsor, an Atlanta-area physician, pleaded guilty to health care fraud for filing claims for surgical monitoring services he did not perform before U.S. District Court Judge Amy Totenberg.

According to the charges and other information presented in court: Dr. Windsor, a licensed Georgia physician, entered into a contract with American Neuromonitoring Associates, P.C. (ANA), a Maryland corporation, to provide a medical service called intra-operative monitoring. In this medical procedure, a physician monitors a patient’s nerve and spinal cord activity during surgery to reduce potential adverse effects to the patient.

The contract stated that Windsor would provide real-time monitoring services for patients in surgery via an online platform with technologists in the operating room. Windsor was responsible for providing a final monitoring report at the conclusion of each surgery, and ANA and its sister company would thereafter bill patients and health care benefit programs, including private health insurance companies, for the monitoring. Dr. Windsor was paid a fee for each surgery monitored.  

Between at least January 2010 through July 2013, Dr. Windsor instead assigned the monitoring to a medical assistant who impersonated Dr. Windsor by using Dr. Windsor’s log-in credentials in the online platform. The medical assistant was not a doctor and was not permitted to perform the monitoring under the contract with ANA. Dr. Windsor submitted final monitoring reports which by their nature falsely stated that he had conducted the monitoring, which ANA and its sister company relied upon in billing health care benefit programs for his services. On several occasions, Dr. Windsor allegedly billed ANA for monitoring services he purportedly performed when he was actually traveling on an international flight and this type of proof was used as an example of his conduct.

In total, after collecting reimbursements from insurers, it was alleged that ANA paid Dr. Windsor over $1.1 million for monitoring services he did not perform during this time period. Sentencing for Dr. Windsor is scheduled for June 3, 2016 at 10:30 a.m.

Attorney Commentary: Big data and billing data analysis is making audits for private and government carriers easier. I have seen an increase in the number of audits for even small providers since it is much simpler to see patterns in billing that trigger red flag audits. This ability to analyze billing data makes it more important than ever for providers to be compliant given that private insurers and government providers will pursue cases criminally if there is consistent billing for services not provided.  The old days of simply making an overpayment are going away.  The use of big data analysis, the allure of whistleblower lawsuits and anonymous complaints are also reason to self-report when appropriate.  

Respironics to Pay $34.8 Million in Qui Tam Case for Allegedly Paying Kickbacks in Form of Free Call Center Services to DME Suppliers That Bought Its Masks for Sleep Apnea Patients

On or about March 23, 2016, a national medical supply company Respironics Inc., based in Pennsylvania, agreed to pay $34.8 million to resolve alleged False Claims Act violations for paying alleged kickbacks in the form of free call center services to durable medical equipment (DME) suppliers that bought its masks for patients with sleep apnea.  

Respironics will pay roughly $34.14 million to the federal government and roughly $660,000 to various state governments based on their participation in the Medicaid program. 

The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE.  Claims submitted to these programs in violation of the Anti-Kickback Statute are also false claims under the False Claims Act.

The United States alleged that Respironics violated the Anti-Kickback Statute and the False Claims Act by providing free services to DME suppliers to induce them to purchase Respironics masks that treat sleep apnea.  Respironics allegedly provided DME companies with call center services to meet their patients’ resupply needs at no charge as long as the patients were using masks that Respironics manufactured; otherwise, the DME companies would have to pay a monthly fee based on the number of patients who used masks manufactured by a competitor of Respironics.  

The government alleged that the conduct began in April 2012 and continued until November 2015. The settlement resolves a lawsuit originally brought by Dr. Gibran Ameer, who has worked for different DME companies, under the qui tam provisions of the False Claims Act.  The Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery.   Under the civil settlement announced today, Dr. Ameer will receive $5.38 million out of the federal share of the recovery.

Posted by Tracy Green, Esq.
Email: tgreen@greenassoc.com

Office: 213-233-2260

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Premiertox Pays U.S. and Tennessee $2.5 Million to Resolve False Claims Act Lawsuit for Urine Drug Screening Services. Allegations of Unlawful Kickbacks, Lack of Medical Necessity

Quantitative urine drug screening ordered by physicians or other health care providers (such as drug treatment centers) and toxicology laboratories or the treatment and monitoring of patients have come under increased scrutiny and audits the past three years. 

The increased requirement of urine monitoring for pain management and drug addiction treatment resulted in companies and providers being more aggressive about the ordering of urine screenings. A recent case shows that qui tam relators are also filing actions against toxicology labs and the doctors who order the screeenings. At the heart of the case is the business relationships between the labs and referring providers.

Referral arrangements between ordering physicians and the laboratories are an issue. I expect to see many more qui tam lawsuits, civil lawsuits by insurance carriers and even some criminal prosecutions.

Understand that the government views providing free point of care testing cups is proving to be an illegal inducement. It also views ownership of any referring provider in the laboratory or a related entity which received profits from the urine tox referrals is also an illegal inducement. Labs and its marketing companies are coming up with creative ways to get referring physicians and drug treatment clinics, but be careful since this could be your company 3 years from now. A company like PremierTox can afford to pay millions but individuals tend to get more aggressive treatment (criminal allegations).  

On February 10, 2016, PremierTox 2.0, Inc. paid $2.5 million to resolve alleged violations of the False Claims Act. PremierTox previously did business in Tennessee under the name Nexus and is a company that provides drug urine screening services.  The government alleged that PremierTox submitted false claims when billing Medicare, TennCare and Kentucky Medicaid for drug urine screening services. PremiereTox 2.0 had a settlement and corporate integrity agreement back in 2014 that was a substantial (payment of $15 million) and it seems the company is resolving its legal matters from its old ownership. 

Los Angeles Area Insurance Company Owner Pleads Guilty to Misdemeanor for Allowing Unlicensed Employee to Advise Clients About and Sell Insurance

Insurance agents are required to be licensed. In an unusual case for criminal prosecution, an owner of an insurance agency and two of his employees were prosecuted for allegations arising from the alleged the unlicensed selling of insurance. 

This is a case where some of the charges alleged arose out of the response to the investigation (providing false information and hiding unlicensed activity). Another teachable moment in this case.

The case began in response to a complaint to the Department of Insurance (DOI). DOI investigators investigted whether Lindhl Lucas, owner of Lucas Insurance Services, allowed and encouraged employees to advise clients about insurance and sell insurance products without proper licenses. At this point, it appears that Mr. Lucas and Kelly Ann Lucas were interviewed and provided information to the DOI agents.

One employee Elaine Edey was previously licensed, but her licensed expired in 2008. DOI alleged that Ms. Edey continued to sell insurance despite her expired license status, which is unprofessional conduct and a misdemeanor (technically illegal). This was not an insurance fraud case, just a licensing issue that blew up.

DOI further alleged that during the investigation Mr. Lucas and Kelly Lucas knowingly provided false information and concealing material facts, in attempts to hide Ms. Edey's unlicensed agent activity. 

DOI referred the case to the Los Angeles District Attorney's for prosecution. Lindhl and Kelly Lucas were each charged with knowingly providing false information and concealing material facts, in attempts to hide the unlicensed agent activity. Ms. Edey was charged with transacting without an insurance license. 

In order to resolve the case, a plea agreement was reached. On April 5, 2016, Mr. Lucas, Kelly Ann Lucas, and Elaine Edey pleaded guilty in Los Angeles Superior Court to various misdemeanor charges and were sentenced to serve three years probation and ordered to pay $500 in fines. The charges here are small but they have consequences on the insurance licenses that are more severe than the criminal charges.

Attorney Commentary: Mistakes happen in running businesses. When investigations occur, it is important to not panic and to seek independent advice before undertaking a strategy that can backfire. With the Boards as well as prosecuting criminal agencies, any misrepresentation or falsification can create evidence of scienter (intent) and demonstrate a lack of credibility and honesty. 

Posted by Tracy Green, Esq.

Florida Pain Medicine Clinic and its Owners Agree to Settle Qui Tam Case Involving Allegedly Medically Unnecessary Nerve Conduction Velocity Tests

Nerve conduction studies (NCS) or nerve conduction velocity tests (NCV) have been a source of Medicare audits in California and Florida for years. Medical necessity is the usual basis for the audits but in this case, a billing employee brought a whistleblower lawsuit and the U.S. intervened.   

In a recent case, a civil qui tam case was settled on April 13, 2016 involving the billing of NCS procedures to Medicare and alleged violations of the False Claims Act. The case is United States ex rel. Gomez v. Florida Pain Medicine Associates, Inc., et al., Case No. 13-80856 CIV (S.D. Fla.).  

The allegations in the case were originally brought by Rosa Gomez under the qui tam, or whistleblower provisions of the False Claims Act. She sued Florida Pain Medicine Associates, Inc. (Florida Pain Medicine) and its owners, Drs. Bart Gatz, Alexis Renta, and Albert Rodriguez. Ms. Gomez had worked in Florida Pain Medicine’s billing department. The United States intervened in this case and took over primary responsibility for litigation. 

Ms. Gomez (and then the United States) alleged that patient records indicated that a substantial percentage of the NCSs that were performed at Florida Pain Medicine were medically unnecessary. It was alleged that the NCSs were often administered without an accompanying electromyography (EMG) test, thereby substantially decreasing the diagnostic value of the procedure. It was contended that this was especially true where the NCS was the sole basis for performing an epidural steroid injection. Florida Pain Medicine denied these allegations.

Ultimately, like many qui tam cases, the cases settled without any admission of liability. Florida Pain Medicine and its owners agreed to pay $1.1 million to resolve allegations that they violated the False Claims Act by billing Medicare for medically unnecessary nerve conduction studies (NCS).  The claims settled by the lawsuit are allegations only and there has been no determination of liability. Ms. Gomez will receive $242,000 as her share of the proceeds.

Attorney Note: One of the most important reasons for self-disclosure and compliance plans (including exit interviews) is to avoid the whistleblower lawsuits. In many cases, former employees are rushing to qui tam plaintiff attorneys to find grounds for filing cases. Although disclosure can seem painful and not necessary, the interest in employees seeking a payday in qui tam cases, even where the facts are weak, is an expensive and time consuming process. 

Posted by Tracy Green, Esq.
Email: tgreen@greenassoc.com
Contact: 213-233-2260

New Jersey Family Doctor Who Billed For Non-Existent Office Visits, Altered Patient Medical Records Sentenced To More Than Three Years In Prison

In the past, if there were Medicare audits for services billed but not performed, there would be a demand for overpayment and criminal prosecutions were rare. This is changing.  One recent case shows what can occur with billing for services not provided.

On March 15, 2016, a New Jersey family physician, Dr. Albert Ades, was sentenced to 37 months in prison for defrauding Medicare, Medicaid and private insurance companies out $280,000 by billing them for non-existent office visits after pleading guilty to Count One of a federal indictment charging him with health care fraud. 

According to the documents filed and statements made in court: From 2005 through June 2014, Dr. Ades, a licensed family medicine doctor fraudulently billed Medicare, Medicaid and various private payors for face-to-face physician office visits that never happened. Dr. Ades admitted to writing prescriptions, authorizing refills or performing other tasks without ever seeing those patients on the billed dates. 

Dr. Ades admitted that he altered patients’ medical charts by inserting fabricated blood pressure readings, other vitals and clinical notes on patients’ charts to make it appear as if they had visited Dr. Ades’s office on the billed dates.  

Dr. Ades admitted that, between 2009 and 2013, he caused a loss of approximately $280,000 to federal health care benefit programs and private insurers.  In addition to the prison term, Judge Salas sentenced Ades to three years of supervised release and ordered him to forfeit $280,000.

In the past, cases would not be prosecuted unless there were larger amounts at issue. This case as well as many others show that the threshold has changed for charging.

Posted by Tracy Green, Esq.

Former California Resident Sentenced to 30 Months in Federal Custody for Sale of Unapproved “Energy Wave” (Rife) Medical Devices

Former California resident David Perez was sentenced in federal court on April 4, 2016 to 30 months in custody for conspiracy to commit mail fraud (18 U.S.C. Section 371) selling unapproved “Energy Wave” medical devices (non FDA approved) over the Internet and mailing them to customers throughout the United States. These are known as "Rife" machines.

According to admissions in his plea agreement, Mr. Perez marketed the “Energy Wave” device using the website www.myenergywave.com[external link].

Rife machines have been around for years and some alternative practitioners use them. I had an unlicensed practice of medicine criminal case in which a Rife machine figured prominently. While I obtained not guilty verdicts on the multiple counts, my client was not the one who offered the Rife treatment. You can find many Rife machines for sale to this date. This particular "Energy Wave" device allegedly consists of a micro-current frequency generator with a digital readout, two stainless steel cylinders, two personal application plates with connectors and lead wire for the cylinders and plates.  

What caused Mr. Perez legal trouble was that allegedly when he sold them to users, his company also provided users with an operating manual and a list of Auto Codes that set forth over 450 digital settings for the device, directed to treat specific conditions from abdominal pain, AIDS and diabetes to stroke, ulcer and worms.  The Auto Codes and Manuel advised users to connect the cylinders or plates to the machine, and touch them to the body for a recommended run time to treat each condition. 

David Perez admitted selling each device for approximately $1,200-$1,500, and receiving gross proceeds of approximately $271,000.  He also acknowledged in his plea agreement that he intended to defraud and mislead the Food and Drug Administration by attempting to evade the agency’s oversight of medical claims made regarding the Energy Wave device by maintaining a separate website (rifecodes.com) to which he referred customers who needed to obtain the auto codes that allegedly were used to treat the various medical conditions.  Mr. Perez admitted that he knew or should have known a number of his customers were vulnerable because they had purchased the device in an attempt to cure cancer, and that they were marketing the device without the proper FDA approvals.

Given the loss amount and lack of prior criminal history, the 30 months is a high sentence and those selling or marketing non-FDA approved devices that are suggested to be used to cure any diseases (especially cancer) need to be mindful of the FDA's aggressive stance on such marketing and sales.

Posted by Tracy Green, Esq.

Napa Gastroenterologist Agrees To Pay $400,000 To Settle Allegations That He Upcoded Patient Visits and Unbundled Conoloscopy Charges To The Medicare Program

On or about April 1, 2016 Dr. Ali S. Vaziri, a gastroenterologist in private practice in Napa, California, agreed (without admitting any liability) to pay the United States $400,000 to settle allegations that he submitted false claims for reimbursement to the Medicare program in violation of the False Claims Act.

The U.S. Department of Health and Human Services and Office of Inspector General ("government") alleged that from 2007 to 2011, Dr. Vaziri allegedly billed Medicare for patient office visits that reflected more time and services than he actually spent with patients.  In addition, the governmet alleged that Dr. Vaziri allegedly billed Medicare for patient office visits that were required to be billed together with routine colonoscopies as one charge. Dr. Vaziri did not admit liability but entered into a settlement agreement in order to resolve the matter.

Settlements in these cases often make sense where the legal fees in challenging or litigating a false claims act case could easily exceed the amount of the settlement.  It also helps guarantee that no criminal charges for Medicare fraud will be filed.  In addition, for providers who see a significant amount of Medicare patients, it may be important to resolve administrative disputes with Medicare and to demonstrate an effective compliance plan is in place.

Posted by Tracy Green, Esq.

Woman Excluded By OIG Indicted For Health Care Fraud for Failing to Notify Employer Home Health Agency of Her OIG Exclusion

In the past, individuals and entities excluded by the Office of Inspector General (OIG) have usually not been prosecuted for fraud. A recent Indictment shows that the government is going to be more aggressive in pursuing individuals excluded by OIG if they fail to notify their employers of their exclusion. 

If OIG excludes an individual or entity it means that no payment can be made by a federal health care benefit program (or state program that received federal funds) for services provided by that individual. 

The United States Attorney’s Office for the Middle District of Pennsylvania announced on March 31, 2016 that China Scott of Pennsylvania was indicted by a federal grand jury for Health Care Fraud for allegedly failing to notify her employer at Cool Waters, a home health care agency that she was an "excluded person" by OIG. Ms. Scott was excluded by OIG due to two previous health care fraud convictions.

According to the Indictment, between November 2015 and January 2016, Ms. Scott provided home health care services to a disabled individual through her employment at Cool Waters, a home health care agency. Since Ms. Waters is an excluded individual, the home health agency cannot receive payments from Medicare or Medicaid or other federally funded programs for her services and must return any payments. Ms. Scott allegedly failed to notify the agency that she is an excluded person.

Indictments and criminal informations are only allegations. All persons charged, including Ms. Scott, are presumed to be innocent unless and until found guilty in court. The investigation was conducted by the U.S. Department of Health and Human Services.

Attorney Commentary: This is a reminder to those in the health care business to run background checks on their employees, independent contractors, and employees of independent contractors who provide services. And simply because Medicare or Medi-Cal or Medicaid is not being directly billed, there are many government programs through HMO contracts, TriCare and other entities that it is very difficult to tell when a patient is Medicare or Medi-Cal (Medicaid) or TriCare.  

In addition, individuals should also check their background since we have seen cases where individuals were excluded and did not know for reasons such as student loan defaults. Finally, if excluded, individuals and entities need to remember that they must apply for reinstatement. It is not automatic. 

Posted by Tracy Green, Esq.