Sunday, November 27, 2016

California Occupational Therapist Pleads Guilty to Medicare Fraud Conspiracy. Case Lesson: Danger of Medical Providers Working With Management Companies

On October 24, 2016, a licensed occupational therapist Keith Canlapan pleaded guilty in Los Angeles for his role in a $2.6 million Medicare fraud scheme that involved billing for occupational therapy services that were not provided. The plea was to one count of conspiracy to commit health care fraud before U.S. District Judge George H. Wu of the Central District of California.  Sentencing is scheduled for Feb. 16, 2017, before Judge Wu. 

As part of his guilty plea, Mr. Canlapan admitted that he was a licensed occupational therapist employed with JH Physical Therapy, an occupational therapy clinic located in Walnut, California.  Mr. Canlapan further admitted that through JH Physical Therapy, he billed Medicare for occupational therapy services when no such services were provided to the Medicare beneficiaries.  Instead, the Medicare beneficiaries received massage and acupuncture services, which are not reimbursable under Medicare rules, he admitted.  In fact, on dates that Mr. Canlapan purportedly provided occupational services to Medicare beneficiaries at JH Physical Therapy, Canlapan was admittedly not present at JH Physical and instead was either out of the country or at his other places of employment on some of those dates. 

Between approximately October 2009 and approximately December 2012, Mr. Canlapan, through JH Physical Therapy, admitted in his plea that he billed Medicare $2,669,618 in false and fraudulent claims, of which Medicare paid $1,860,786.

Mr. Canlapan was charged in an indictment returned on June 16, 2016, along with co-defendants Simon Hong, 54, and Grace Hong, 50, husband and wife, both of Brea, California.  Simon Hong is the owner and Grace Hong is the co-operator of JH Physical Therapy, and they are charged with one count of conspiracy to commit health care fraud and three counts of health care fraud.  Both are pending trial, which is scheduled for Jan. 17, 2017.  An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Attorney Commentary on Management Companies and Patients' Requests for Therapy:

This case is a lesson on what happens when a licensed health care worker goes to work for a management company which helps the occupational therapist (in this case) obtain a Medicare provider number and then does the billing and essentially runs the practice.

In the plea agreement, there is reference to billing for massage and acupuncture services. This is common in cases where the Medicare beneficaries are Korean-American and want acupuncture and massage rather than physical therapy. Giving patients that they want whe it is not a covered Medicare service and billing it under Medicare as physical therapy or occupational therapy is a significant problem in certain ethnic communities. The problems compounds since the records end up being changed to reflect the services "billed" and not provided which means the records are false.  

Before anyone works with a management company or a clinic, due diligence needs to be done. This is more common with young therapists or inexperienced ones who are seeking employment. Have a lawyer experienced in health care check out the clinic or management company. There is far too much risk to not do your homework. Any billing under your provider number must be done without violating the false claims act and must follow Medicare rules and regulations. Even if you only received a smaller percentage of the billings, you will be responsible for all the billings. 

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


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