Psychiatrist Who Saw Patients by "Skype" Pleads Guilty to Health Care Fraud for Treatment and Billing for Workers' Compensation Patients

When health care providers tell me that "telemedicine" is now "legal," I respond that the same standard of care applies and that they need to be very careful regarding how the patients are seen, referred, examined and ensure that the medical record keeping and reports also meet the standard of care. 

Health care providers who do telemedicine as a subcontractor also need to make sure they know who they are working for and how the visit is going to be billed. In addition, they need to see whether they are paying a third party for management fees or billing that could be classified as payment for referrals.

The number of health care fraud cases that arise where the patients have been treated or prescribed after "telemedicine" consultations or exams is on the rise.  A recent case shows how Skype was used to allow a psychiatrist to see patients but it appears the reports and billing may not have met the standard of care and even delved to the abyss of false billing.

Dr. John Thomas Terrence of Marina del Rey pleaded guilty on July 16, 2018  to health care fraud involving the alleged defrauding of California workers’ compensation insurers. This was an Indictment that had been filed in July 2015 and related to conduct from 2005 to 2012. Criminal cases often deal in ancient history or acts occurring years prior. 

Owner of Ventura County Cleaning Company Sentenced to 365 Days and Probation for Workers' Compensation Premium Fraud

Audits by State Compensation Insurance Fund and other workers' compensation insurance carriers (Zenith, Travelers, etc.) can turn into criminal cases if there is intentional evidence of underreporting of payroll. 

A recent case shows how a state case was handled in Ventura County which is known to be tough on sentencing. The last case we had in Ventura County resulted in a no time sentence and a corporate plea but full restitution was made in that matter.

On June 6, 2018, Victor Vega of Oxnard, the owner of Vega Cleaning Service, was sentenced to serve 365 days in Ventura County jail for committing workers’ compensation insurance fraud and 72 months' probation. Mr. Vega had plead guilty in April 2018 to four counts of Insurance Code Section 11760(a) relating to operation of his cleaning business from January 2010 to December 2015 and underreporting the number of employees and the total payroll.

Mr. Vega admitted the loss was $460,197 and had paid $100,000 in restitution at the sentencing hearing which was probably one reason why the sentence was 365 days in county jail (not state prison and which will mean that only 6 months will be served). One large advantage of a 365 day county jail sentence is that with no state prison time, the charge can be reduced to a misdemeanor upon sufficient proof to the Court and can be expunged.

The time to address these cases is early on and to ensure that any independent contractors are properly classified and to make sure that any reporting is accurate. If there are any errors, they should be fixed as soon as possible. If audits show issues, it is important to be proactive.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law

Medical Device Maker AngioDynamics Agrees to Pay $12.5 Million to Resolve False Claims Act Allegations

Medical device companies are being held responsible for false and misleading promotional claims as well as advising medical providers on what billing codes to use. A recent case shows how these cases can proceed.

On July 18, 2018, it was announced that medical device manufacturer AngioDynamics, Inc. agreed to pay the United States a total of $12.5 million to resolve allegations that the company caused healthcare providers to submit false claims to Medicare, Medicaid, and other federal healthcare programs relating to the use of two medical devices, LC Bead and the Perforator Vein Ablation Kit (PVAK). 

The claims resolved by the civil settlements are allegations only, and there have been no determinations of liability.  

AngioDynamics will pay $11.5 million to resolve allegations that the company caused false claims to be submitted to government healthcare programs for procedures involving an unapproved drug-delivery device that was marketed with false and misleading promotional claims.  

St. Louis County Doctor Pleads Guilty to Obstructing FBI Investigation When He Responded to Subpoena Requesting Medical Records

One way for the government to build a case against someone is by issuing a subpoena for records and seeing whether the business or person responding produces record that are false or misleading. This allows the government to not have to prove fraud or other criminal acts.

On July 13, 2018, Dr. Vidal Sheen of St. Louis County, Missouri pled guilty to obstructing an investigation by the Federal Bureau of Investigation (“FBI”) regarding whether he billed the Medicare program and private insurers for “face to face” office visits performed on dates when he was actually traveling outside of Missouri, and sometimes traveling outside of the United States.

According to his plea agreement, Dr. Sheen operated a medical office in St. Louis County, Missouri.  At the medical office, Dr. Sheen created medical records using a template that  recited patients’ symptoms and histories, and sometimes recorded vital signs (e.g. pulse rates) that did not change between patients’ visits. 

Moreover, from time to time, Dr. Sheen traveled to various destinations, including the Dominican Republic and Florida.  For the times when Dr. Sheen was out of town, the government alleged he created office notes with false entries reflecting that he had seen patients in his office, using his electronic signature.  Dr. Sheen's medical records did not discuss the role of the other employees in his office during the out-of-town visits, or his absence from the office on the dates of service. 

The United States served Dr. Sheen’s office with a subpoena requesting medical records regarding his office visits in late 2016.  In response to the subpoena, on December 1, 2016, Dr. Sheen produced medical records to the FBI in which he had made entries about face-to-face office visits when he was out of town.

California Pharmacy Pays $75,000 Settlement for Failing to Keep Accurate Records of Controlled Substances Inventory

As part of the Drug Enforcement Administration's (DEA) increased enforcement on prescription addiction and prescribing, pharmacies are facing an increased number of inspections and audits on their inventory and recordkeeping. 

Recently, in June 2018, a pharmacy in Lakeside, California known as Archana Corporation doing business as Leo’s Lakeside Pharmacy and its owners paid $75,000 to resolve allegations that they failed to properly account for controlled substances. This is a civil settlement but it can also raise issues with the Pharmacy Board. 

Failure to comply with DEA rules and regulations can result in fines or loss of DEA permit. Schedule II prescription and inventory records must be available for two years. It is always a good idea for pharmacies to review their procedures and ensure that these records are being maintained properly since an audit can turn into an expensive and time-consuming dispute with the DEA and create collateral issues with the Pharmacy Board. 

Posted by Tracy Green, Esq.

Green and Associates

Orange County Psychiatrist Arrested on Federal Charges Alleging Illegal Prescriptions for Opioids Without Legitimate Medical Need

The use of undercover officers who pose as "patients" are standard where physicians are charged with prescribing without legitimate medical necessity. A recent case used at least one undercover officer in its investigation.

A psychiatrist Dr. Robert Tinoco Perez who practices at a Santa Ana clinic was arrested on June 30, 2018 by special agents with the Drug Enforcement Administration on federal charges that allege he issued prescriptions for scheduled drugs, such as the opioid oxycodone, without a medical purpose.

    

Dr. Perez was named in a 14-count indictment returned by a federal grand jury on June 27. An indictment contains allegations that a defendant has committed a crime and is not evidence. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt in court.

Investigation Into Compound Prescription Marketing by TYY-Affiliated Pharmacies Charges a Marketer and Two Podiatrists in Los Angeles

Marketing payments are driving many of the federal criminal cases involving compounding pharmacies. A recent Los Angeles federal case fits that profile. 

An indictment unsealed on June 26, 2018, alleged a wide-ranging conspiracy that was responsible for more than $250 million in claims for prescriptions (allegedly fraudulent or involving illegal referral fees or kickbacks) that were filled by compounding pharmacies in Nevada and Southern California. An Indictment is not evidence and the defendants charged are presumed innocent. 

The indictment charges Irena Shut with allegedly paying kickbacks to two podiatrists to authorize prescriptions written on pre-printed prescription pads designed to maximize insurance payments, regardless of the medical need for an expensive compounded formulary for each “patient.”

The indictment alleges that TYY Consulting, a Las Vegas, Nevada-based company used a nationwide network of marketers to refer prescriptions to TYY-affiliated pharmacies (New Age Pharmaceuticals, Roxsan, Concierge Compounding, Precise Compounding) in exchange for payments that the government is alleging are "kickbacks." 

It is alleged that  the health care plans paid out nearly $175 million to the pharmacies. Ms. Shut, who worked as a marketer for TYY, received approximately $6.8 million, some of which was, in turn, allegedly given to the charged podiatrists.

The charged podiatrists, Domenic Signorelli of Irvine and Robert Joseph of Huntington Beach, along with several other unnamed co-conspirator doctors, allegedly received improper payments (kickbacks) for “writing” the prescriptions. Once the prescriptions were filled, it is alleged that other members of the conspiracy submitted fraudulent claims to federal, state and private insurers for the compounded drugs. The insurers include the Department of Defense’s TRICARE program as well as federal and state workers’ compensation programs.

In addition to paying the charged podiatrists and other medical professionals, the Indictment alleges that TYY induced other doctors to participate in the scheme by offering prostitutes, fancy meals, and expensive event tickets.  

This case is related to other pending federal cases and there are numerous alleged unindicted marketers and doctors. It seems there will be other federal cases - whether plea agreements or further indictments - coming out of this matter.