In this case, it involves the Korean American community in Los Angeles and Orange Counties which is hardworking and entreprenurial but where some do not necessarily understand the full consequences when regulations are not followed. Those consequences? Audits, fines, civil lawsuits and, in this case, criminal cases with lengthy prison sentences.
On January 10, 2017, a California man Simon Hong (also known as Seong Wook Hong) who ran management companies which allegedly operated rehabilitation clinics in Walnut, Torrance and Los Angeles was sentenced to 121 months in federal prison by United States District Judge David O. Carter. At the conclusion of the sentencing hearing, Judge Carter ordered Mr. Hong remanded into custody.
This is not just a straight forward fraud case. One of the issues is providers giving patients in an ethnic community services other than physical therapy but billing and documenting for physical therapy. In addition, it is a businessman operating clinics and then getting a percentge of income for referring the business. There were traditional health care fraud issues present but it shows what happens when business people decide to operate or manage a clinic.
Mr. Hong owned or operated physical therapy clinics operated by companies called Hong’s Medical Management, Inc., CMH Practice Solution, and HK Practice and Solution, Inc. As part of his business, Mr. Hong recruited Medicare providers and beneficiaries and provided uncovered services like massage and acupuncture for the beneficiaries. Even though many of the beneficiaries did not receive actual physical therapy, those who worked with Mr. Hong billed Medicare for physical therapy, and then paid a large percentage (allegedly 56 percent) of the reimbursement funds back to Mr. Hong's management companies.
In October 2016, Mr. Hong was found guilty in October of eight counts of healthcare fraud, nine
counts of illegal kickbacks related to healthcare referrals and two counts of
aggravated identity theft. The loss amount to Medicare was approximately $3 million by billing for unneeded or unnecessary services.
The government alleged that Mr. Hong and the companies or providers he managed billed Medicare from the spring
of 2009 until November 2013 and received approximately $2,929,775 in
reimbursements, of which Mr. Hong or his companies received approximately $1,640,674. During the sentencing hearing, Judge Carter ordered Mr.Hong to pay $2,929,775 in restitution.
Mr. Hong is one of 10 defendants who were charged in 2015 and early 2016 for healthcare fraud related to
physical therapy. Eight others have pled guilty, and one remains a fugitive. Those previously convicted in the
investigation are:
Joseff
Sales, a co-owner and operator of Rehab Dynamics, who
pleaded guilty to one count of healthcare fraud and one count of illegal
kickbacks, and was sentenced last year to 51 months in prison;
Danniel
Goyena, a co-owner and operator of Rehab Dynamics, who
pleaded guilty to two counts of healthcare fraud and was sentenced last year to
51 months in prison;
Marlon
Sonco who pleaded guilty in June 2015 to conspiracy and is
scheduled to be sentenced on January 23;
Eddieson
Legaspi, an employee of Rehab Dynamics, pleaded guilty to
conspiracy to commit healthcare fraud and also was sentenced yesterday to 15
months;
Ohun
Kwon, the owner/operator of E.K. Medical Management, which
referred patients to Rehab Dynamics, pleaded guilty to conspiracy to commit
healthcare fraud and was sentenced last year to 27 months in federal prison;
Leovigildo
Sayat, an employee of RSG Rehab, pleaded guilty to conspiracy
to commit health care fraud and was sentenced last year to two years in prison.
In a separate case, Mr. Hong pleaded guilty last month to conspiracy to commit health care fraud in another case involving occupational and physical therapy services that were allegedly never provided to Medicare beneficiaries with a loss of approximately $2.4 million. Mr. Hong is scheduled to be sentenced in this case in Los Angeles federal court by United States District Judge George Wu on March 6.
The government contended at sentencing that Mr. Hong was the lead in the Medicare fraud case and claimed he directed numerous others from patient enrollment to billing to record keeping. This case shows that management companies will be charged along with the providers and owners and there is no insulation for management where there is control and direction.
Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Email: tgreen@greenassoc.com
Phone: 213-233-2260
