Thursday, April 28, 2016

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 It is an outdated model and a risky one.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.

Mr. Hernal pleaded guilty in 2013 to a conspiracy charge and is awaiting sentencing.  In addition to Ms. George and Mr. Hernal, the other defendants convicted in the investigation are: Ana Nerissa Tolentino (a nurse and former part owner of Rosner); Armando Tolentino (a nurse and former part owner of Rosner); Frederick Magsino (a former part owner of Rosner); Dr. Emmanuel Nwaokocha(an Illinois physician); Dr. Masood Syed (an Illinois physician); Jennifer Holman (an office manager in a medical office); Titis Jackson (a marketer who referred Medicare patients to Rosner); Lionel P. Gassman (a Rosner nurse who treated patients in their homes) and Gloria Zisman (a Rosner nurse who treated patients in their homes).

In addition, Dr. Arthur Davida, an Illinois physician who allegedly falsely certified some of Rosner’s patients for home-health services, including some referred by Ms. George, was convicted of health care fraud in a related case. Dr. Davida was sentenced earlier this year to two years in prison.

Posted by Tracy Green, Esq.
Office: 213-233-2260
Green and Associates, Attorneys at Law


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