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Recent Case Shows Investigation and Prosecution of Federal Fraud by SSI Recipients Who Travel Outside the U.S. in Excess of 30 Days

We receive a fair number of calls by people being audited because their parent has been living in a foreign country for months at a time while receiving Supplemental Security Income (SSI) from the Social Security Administration (SSA). I have seen an increase in audits by the government, including OIG, for these SSI recipients. This is due to the government's enhanced ability to track federal travel by SSI recipients and a task force. A recent criminal case shows that some of these audits are not just seeking repayment but are filing federal criminal charges.

On December 11, 2019, Ahmad Yusuf Nuristani pleaded guilty in federal court to theft of public money, admitting that he received over $100,000 in government benefits by concealing foreign travel and residency between July 2015 and December 2018. As a part of his plea agreement, Mr. Nuristani has agreed to make full restitution to the SSA and the California Department of Health Care Services.  He will be sentenced before the Hon. Cynthia A. Bashant on March 9, 2020. 

During a hearing before U.S. Magistrate Judge Karen S. Crawford, Mr. Nuristani admitted that he applied for SSI from the Social Security Administration in July 2015. Mr. Nuristani acknowledged that he knew an SSI recipient must reside within the United States, and that he was required to report any travel outside of the United States lasting more than thirty days.  Mr. Nuristani admitted to concealing and repeatedly lying to the SSA about his foreign travel and residency, and to receiving $27,492.44 in SSI payments and to causing a loss of $73,090.34 to the State of California for health care payments and services as a result of his fraud. Since SSI recipients automatically qualify for Medi-Cal, this is why there was restitution owed to the State of California.

Northern California Physician Indicted for Prescribing Opioids to Patients Without a Legitimate Medical Need

Physicians continue to face charges for prescribing opioids to patients without a legitimate medical purpose. This is one area where physicians and advanced practitioners must exercise extreme caution. A recent case shows that federal charges will be filed in these cases.

On December 5, 2019, a federal grand jury brought a 14-count indictment against  physician Dr. Edmund Kemprud of San Joaquin County, charging him with prescribing opioids to patients outside the usual course of professional practice and not for legitimate medical purpose. An indictment is not evidence and the physician is presumed innocent.

According to the indictment, Dr. Kemprud maintained a medical practice in the California cities of Dublin and Tracy. The indictment alleges that on 14 occasions between September 6, 2018 and March 13, 2019, Dr. Kemprud allegedly prescribed highly addictive, commonly abused prescription drugs, including Hydrocodone, Alprazolam, and Oxycodone – outside the usual course of professional practice and not for legitimate medical purpose. 

In these type of cases, the DEA or investigating agency usually uses undercover patients in order to establish the proof to file such charges. Dr. Kemprud pleaded not guilty at his arraignment.

Attorney Commentary: Physicians, Osteopaths and advanced practitioners should review the Medical Board's published pain guidelines. It's a 90 page guideline published in 2014, and is now considered to establish the standard of care in California. There are also links in the document on topics such as benzodiazapenes (Xanax/Alprazolam) at issue in this case and how to taper patients from them ("the Ashton manual"). There is free web-based training on prescribing opioids from the CDC that should be reviewed and where a provider can earn free continuing education credits.

Posted by Tracy Green, Esq.

Green and Associates

San Francisco Acupuncturist Pleads Guilty To Health Care Fraud In False Billing for Union Members for Services Not Performed or Inaccurately Billed.

Federal prosecutors have focused investigations on the billing of labor union members’ health benefit plans especially in places like San Francisco where workers have generous union contracts. A recent case illustrates the types of cases that are being prosecuted.

December 6, 2019, acupuncturist Haichao Huang pleaded guilty to health care fraud, in violation of 18 U.S.C. § 1347, and making false statements relating to health care matters, in violation of 18 U.S.C. § 1035(a)(2), in the Northern District of California. The guilty plea was accepted by the Honorable Susan Illston, U.S. District Judge. 

According to the plea agreement, Mr. Huang was a health care provider who offered acupuncture, physical therapy, massage, and other services to patients in and around San Francisco. From February 2013 through June 2018, Mr. Huang admitted that he submitted and caused to be submitted false claims for reimbursement from health care benefit programs that he knew were not properly payable, including from programs provided through federal government and labor union healthcare plans. 

Mr. Huang's plea admits that he included false and inaccurate billing codes that artificially inflated both the type of service the patient received and the time he spent with the patient. The plea agreement gives examples of the ways in which Mr. Huang submitted false and inaccurate billings for reimbursement. For example, Mr. Huang submitted requests for reimbursement for acupuncture treatment when, in fact, the patient had received much shorter periods of treatment, no acupuncture treatment, or no care of any kind at all. 

Pittsburgh-area Lab Owner Charged with Paying Kickbacks in Connection with Medicare Claims for Genetic Testing Based on Telemedicine Visits

Genetic testing billed to Medicare, especially where telemedicine is used to generate the lab orders, has been a hot area of investigation by the U.S. Justice Department. A recent case illustrates the type of cases that are being targeted.

On November 26, 2019, Ravitej Reddy, the alleged owner of two testing laboratories—Personalized Genetics, LLC, d/b/a Personalized Genomics (PGL) and Med Health Services Management, LP (MHS) in Pennsylvania, was charged in federal court by criminal Information with 2 counts of conspiracy to pay and receive kickbacks, 1 count of conspiracy to pay kickbacks, and 1 count of offering and paying kickbacks. A criminal Information is not evidence and a defendant is presumed innocent.

According to the Information's allegations, Mr. Reddy's companies billed Medicare for 2 types of genetic testing: cancer genomic testing (CGx) and pharmacogenetic testing (PGx). CGx testing used DNA sequencing to detect mutations in genes that could indicate a higher risk of developing certain types of cancers in the future. CGx testing, however, was not a method of diagnosing whether an individual presently had cancer. PGx testing detected specific genetic variations in genes that impacted the metabolism of certain medications. In other words, PGx testing helped determine, among other things, whether certain medications would be effective if used by a particular patient. 

The Information alleges that from approximately May 2018 to April 2019, Mr. Reddy and a group of business consultants, marketers, operator of a telemedicine entity and others  acquired thousands of testing samples from Medicare beneficiaries located throughout the United States, as well as the corresponding prescriptions that PGL and MHS needed to bill Medicare for CGx and PGx testing. 

Los Angeles Orthopedic Surgeon Sentenced to 30 Months in Federal Prison for Receiving Kickbacks for Referring Surgeries to Pacific Hospital and Using Medical Hardware From Hospital-Related Entity

On November 22, 2019, an orthopedic surgeon specializing in spinal surgeries, Dr. Daniel Capen, was sentenced to 30 months in federal prison after he pleaded guilty. Dr. Capen pleaded guilty in August 2018 to conspiracy to commit honest services fraud and to soliciting and receiving kickbacks for health care referrals relating to Pacific Hospital and related entities. 

In his plea agreement, he agreed that he received at least $5 million in kickbacks for performing hundreds of spinal surgeries that were mostly for workers' compensation patients. 

U.S. District Judge Josephine Staton who sentenced Dr. Capen also ordered him to forfeit $5 million to the United States and pay a $500,000 fine. 

Dr. Capen is 70 years' old and the sentence appears to have taken into account his age and his acceptance of responsibility for the plea. One reason the sentence is 30 months is due to the total loss related to the kickbacks. When there is an illegal referral fee, the entire bill is considered a false or fraudulent claim. Given the cost of hospital bills for such surgeries, the plea agreement indicated that the illegal referral fees resulted resulted in more than $580 million in fraudulent bills being submitted, mostly to California’s worker compensation system.

This kickback arrangement centered on the now-closed Pacific Hospital in Long Beach, which specialized in surgeries, especially spinal and orthopedic procedures. Pacific Hospital’s owner, Michael Drobot who is serving a 5-year sentence for conspiracy and illegal kickbacks, paid kickbacks to doctors, chiropractors and marketers in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system.

New Civil Qui Tam Lawsuit Filed Against South Dakota Neurosurgeon and His Physician-Owned Distributorships (PODs) Alleging Kickbacks for Devices Used in Spinal Surgeries

2016 Senate Report on PODs

The issue of physician owned distributorships (PODs) is still an issue with orthopedic surgeons and neurosurgeons. The Justice Department is still filing qui tam actions and joining actions filed by whistleblowers. Physicians need to be very careful when forming their own device companies or distributorships. Since 2013, OIG has stated that PODs are "inherently suspect" under the federal anti-kickback statute.

Recently, on November 14, 2019, the United States filed a civil qui tam complaint against South Dakota neurosurgeon Wilson Asfora M.D. and his medical device companies Medical Designs LLC and Sicage LLC. The complaint alleges False Claims Act violations arising from the alleged payment of kickbacks to Dr. Asfora tied to the devices he used in spinal surgeries which were purchased from his own distributorships Medical Designs and Sicage.          

The Anti‑Kickback Statute prohibits offering or paying anything of value to induce the referral of items or services covered by Medicare, Medicaid, and other federal healthcare programs.  The government’s civil complaint alleges that Dr. Asfora, Medical Designs, and Sicage engaged in multiple kickback schemes designed to pay Dr. Asfora hundreds of thousands of dollars in exchange for Dr. Asfora using spinal devices distributed by Medical Designs and Sicage in his spine surgeries. 

The civil lawsuit also alleges that despite receiving numerous warnings that he was performing medically unnecessary procedures with the devices in which he had a financial interest, Dr. Asfora allegedly continued to perform such procedures while personally profiting from his use of devices sold by Medical Designs and Sicage. 

The case is captioned United States ex rel. Bechtold, et al. v. Asfora, et al., No. 4:16-cv-04115-LLP (D.S.D.).  The claims asserted against the defendants are allegations only, and there has been no determination of liability.

Former Merced Health Care Provider CEO Sentenced to 5 Years in Prison for Medi-Cal and Health Care Fraud

Health care fraud prosecutions continue to focus on nonprofit and community health clinics. At times, the community health centers are not run as rigorously as hospitals or larger entities but they are held to the same standard. Non-profits have special rules and founders or executives cannot run them for their own benefit. A recent case shows an aggressive prosecution against the founder and CEO of a nonprofit in California.

Photo: mvelez@mercedsunstar.com

On November 5, 2019, Sandra Haar, 59, of Merced, was sentenced in Fresno by U.S. District Judge O’Neil to five years in prison and ordered to pay $6,107,846 in restitution for health care fraud and conspiracy to receive kickbacks. Ms. Haar was ordered to self-surrender on Jan. 15, 2020, to begin serving her sentence. 

This sentence came after a guilty plea as there was no trial.  She had plead guilty in 2018 and as part of the plea agreement her daughter and husband would not be prosecuted. This is often an important part of the plea where other family members have been involved in a business.

Sugar Daddy Website Users: Pay Attention. San Diego Attorney Who Used Site Has Entered Federal Guilty Plea to Enticing and Coercing a Female to Engage in Prostitution.

Sugar Daddy websites that offer a “mutually beneficial relationship” are being investigated as part of human trafficking when they involve minors and young women. A recent case, has a San Diego attorney pleading guilty which will probably lead to prison time and potential loss of bar license. 

I hope this case causes people to think twice about the nature of these websites and how vulnerable young women can be lured to them. Professionals especially should be very careful since they are held to a higher level of conduct. This case did not involve an agent posing as a young woman but an actual minor female who claimed to be 18 year's old but was still in high school.  

On October 30, 2019, San Diego attorney William David Turley plead guilty in federal court to enticing and coercing a female to engage in prostitution in violation of 18 U.S.C. § 2422(a). U.S.D.C., So Dist, CA, Case No. 18-CR-4574-AJB.

According to his plea agreement, on or about April 30, 2018, Mr. Turley began communicating with an adult female victim whom he met on the website sugardaddymeet.com. Mr. Turley and the victim discussed entering into a “mutually beneficial relationship,” meaning that Mr. Turley would provide the victim with financial support and the victim would provide companionship for and engage in sexual acts with Mr. Turley.

Prosecutions for Immigration Fraud Are On the Rise: Federal Grand Jury Indicts Lawyer and Accountant in Visa Fraud Conspiracy for South Korean Nationals

While federal prosecutions for white collar crime have been cut in half the past three years, there is an increase in immigration fraud cases in large part due to the current administration's emphasis on preventing illegal immigration. A recent case illustrates this trend. 

On November 4, 2019, in the Central District of California, an indictment was unsealed charging two men with conspiracy to commit visa fraud by having a plan to obtain lawful permanent resident (LPR) status for South Korean nationals by allegedly submitting fraudulent visa applications that falsely claimed American businesses wanted to hire skilled foreign workers.

The named defendants are Weon Keuk Lee, a South Korean national who is also a licensed California attorney who previously operated an immigration law firm in Los Angeles; and Young Shin Kim, a naturalized United States citizen, who previously operated an accounting firm in Diamond Bar, California. An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

How to Write a Letter to the Court for Sentencing: Felicity Huffman Letter as a Case Study

Credit: SF Gate

In cases, we have clients and friends, colleagues and family write character and support letters. These are not easy letters to write. I'll use the recent letter written by Felicity Huffman as a case study. I view it as a first draft and think it could have been much improved. 

You can review the letter and see what you think. Here's the link to: Huffman Letter, page 1; Huffman Letter, Page 2; and Huffman Letter page 3

First, I tell clients when they write such letters that it is hard to truly apologize at the same time that you're crying for yourself and your family. The letter came off to me as being more about how this has adversely affected Ms. Huffman and her family than how she apologizes to the victims of the SAT cheating fraud and the college students across the country who took the same test her daughter did. She could have acknowledge in greater detail that her actions and bribe resulted in her daughter getting an additional 400 points on the SAT which is a big jump.

Second, I would have told her that her letter focused in my opinion too much upon herself and was too self-involved. Her statements that "I find Motherhood bewildering" and that she was in a "blind panic" when she decided to pay off the proctor would have been deleted by my red pen. Her husband's statements in his letter, see below, about how motherhood was "frightened" his wife did not help.

Director of California Cosmetic Surgery Center Who Fled Pending Trial Is Returned to U.S. to Face Federal Charges in Health Care Fraud Case For Billing Cosmetic Procedures to Insurance as "Medically Necessary"

Extraditions for health care fraud cases are more common now especially where the loss amounts are high. In a recent case, Linda Morrow, a Rancho Mirage woman married to a plastic surgeon, David Morrow, who had fled the United States after being named in a 31-count federal grand jury indictment in 2016, arrived in Southern California on July 1 after being deported by Israel, which had determined that she had entered that nation on a fraudulent Mexican passport. Ms. Morrow faces federal charges related to allegations that she fraudulently billed insurance companies $50 million for “medically necessary” cosmetic surgeries has been returned the United States after fleeing to Israel two years ago.

          

Ms. Morrow appeared in U.S. District Court in Santa Ana on July 2, 2019 and entered a not guilty plea to a separate grand jury indictment that charges her with contempt of court for fleeing while free on bond. During that hearing, she was ordered detained and a trial date in the contempt case was scheduled for August 27. She will make another court appearance later this month to discuss the status of the pending health care fraud case.

Ms. Morrow and her husband, David Morrow, were arrested in Israel on June 16. David Morrow, who pleaded guilty in 2016 in the health care fraud case and was sentenced in absentia to 20 years in federal prison, is pending extradition proceedings in Israel. David Morrow also faces contempt of court charges for fleeing while he was pending sentencing.

West Hollywood Doctor Charged With Health Care Fraud, False Statements and Witness Tampering Relating to Billing Medicare for Human Growth Hormone Serostim and Alleged Buybacks From Patients for Resale

On July 2, 2019, a doctor James T. Lee, who operated a medical clinic in West Hollywood where he specialized in treating HIV patients was taken into custody in Vienna, Austria after waiving extradition pursuant to federal charges that allege he defrauded health insurance companies in connection with the brand-name human growth hormone Serostim.

After a federal grand jury returned a 10-count indictment on June 6, Dr. Lee was arrested in Vienna at the request of the United States. Dr. Lee subsequently waived extradition and agreed to return to the United States. The indictment against Dr. Lee charges him with one count of conspiracy to commit health care fraud, six counts of health care fraud, one count of making false statements relating to health care matters, and two counts of witness tampering. Dr. Lee is presumed innocent and charges are not evidence.

The indictment has been unsealed and the arraignment was scheduled in downtown Los Angeles. The government claims that Dr. Lee allegedly engaged in a scheme to divert Serostim – an injectable human growth hormone that is FDA-approved for HIV-positive patients – from legitimate HIV patients to other people who purchased the drug for its purported anti-aging properties. The Food and Drug Administration has approved Serostim for use only by HIV patients with wasting or cachexia who are also receiving antiretroviral therapy. 

According to the Indictment, from at least May 2011 until February 2019, Dr. Lee wrote prescriptions for Serostim to HIV patients, who obtained the drugs and used their Medicare Part D benefits to pay for the drugs. Dr. Lee or those associated with him then illegally purchased the Sersotim back from patients, so that he could re-sell the Serostim. Dr. Lee allegedly re-sold the Serostim to other patients who were not HIV-positive, and who used the human growth hormone to build muscle and for other cosmetic purposes.

Orange County Psychiatrist Sentenced to More than Four Years in Federal Prison for Writing Illegal Opioid Prescriptions to Drug Dealer

On June 19, 2019, a psychiatrist who practiced at a Santa Ana clinic was sentenced to 57 months in federal prison for issuing prescriptions for controlled substances, such as oxycodone, hydrocodone, alprazolam and amphetamine salts, to a non-patient in exchange for cash, admitting in his plea agreement that the prescriptions were without a medical purpose and he knew the drugs would be diverted and sold on the street.

Dr. Robert Tinoco Perez was sentenced by Judge Andrew J. Guilford. Dr. Perez pleaded guilty on February 25, 2019 to one felony count of conspiracy to distribute controlled substances.

Dr. Perez admitted that he wrote prescriptions for “patients” he had never met or examined, including an undercover officer. Dr. Perez admitted that he created fictitious medical records for drug customers to provide justification for their prescriptions.

Sacramento Man Sentenced to 3 Years in Prison for Causing Misbranded Drugs to Be Sold Online As Weight Loss and Fat Burner Pills

The U.S. Food and Drug Administration (FDA) has stepped up criminal enforcement where misbranded drugs are being sold online to consumers. On May 29, 2019, Scott Edward Cavell of Sacramento was sentenced by U.S. District Judge John A. Mendez to three years in prison for causing misbranded drugs to be introduced into interstate commerce for weight loss. 

According to plea agreement and court documents, between 2015 and 2017, Mr. Cavell, with others, developed a plan to market and sell a drug, 2,4-Dinitrophenol (also known as DNP), as a weight loss drug and “fat burner” despite knowing that DNP is not approved by the FDA as a substance for human consumption. Mr. Cavell sold DNP in pill form and called it a fertilizer — a term under which is it legally sold in other circumstances.

Lengthy Sentence Imposed Upon Patient Recruiter for Home Health Services Where Illegal Kickbacks Were Paid to Doctors and Patients

A Houston, Texas patient recruiter and home health agency owner was sentenced to 188 months in prison today for her role in a $20 million scheme to pay illegal health care kickbacks to physicians and Medicare beneficiaries in order to fraudulently bill for medically unnecessary home health services, and to launder the proceeds. Health care fraud sentences continue to get longer. One recent case involved a lengthy sentence even though it was part of a guilty plea. 

On May 29, 2019, a Houston, Texas patient recruiter Egondu "Kate" Koko was sentenced to 188 months (over 15 years) in federal prison for her role in a federal health care fraud case where she admitted she paid illegal kickbacks to physicians and Medicare beneficiaries in order to fraudulently bill for medically unnecessary home health services for four other home health agencies and her own. 

The sentence came after Ms. Koko pleaded guilty in October 2018 to one count of conspiracy to pay and receive health care kickbacks and one count of conspiracy to launder monetary instruments. This sentence was lengthier than the norm since there was a money laundering count as in her plea she admitted she laundered the proceeds through another person's bank account. 

Podiatrist Sentenced in Upcoding Medicare Fraud Case for Patients Seen at Assisted Living Facilities

Years ago, health care fraud cases would generally only be brought for outright fraud where there was ghost billing for patients not seen or other type of fraud. However, upcoded billing is now being charged more often when there is a significant pattern. A recent case involving a podiatrist illustrates this.

On May 17, 2019, podiatrist Loren Wessel of Tucson, Arizona was sentenced by U.S. District Judge James Soto for his role in a Medicare fraud scheme to serving a 24-month term of imprisonment. Mr. Wessel had previously pleaded guilty to Health Care Fraud. The Court also ordered Wessel to pay $965,985 in restitution to the Centers for Medicare and Medicaid Services.

In the plea agreement, Mr. Wessel admitted that from 2008 through June 2016 that he as a licensed podiatrist defrauded Medicare out of hundreds of thousands of dollars. In his plea agreement, Mr. Wessel admitted he submitted false claims to Medicare. As part of his practice, Mr. Wessel conceded that he regularly provided routine podiatry care for patients at assisted living facilities in and around Tucson, but fraudulently billed Medicare for more complex and significantly more expensive services that he had not performed. To further this upcoding, Mr. Wessel admitted that he falsely documented patients’ medical records with alleged ailments they did not have and with care Mr. Wessel did not provide.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Ten Individuals Affiliated With Compounding Pharmacy, Including Owners, Pharmacist, Billing Manager, Sales Reps and Nurse Practitioner, Charged in Compounding Prescription Drug Case

In compounding cases, it is usually some very high billed creams that get attention. In a recent case, the government alleges that the defendants’ fraudulent conduct caused a prescription plan administrator to pay over $29,000 for one tube of a cream advertised as treating “general wounds.”
Another red flag in compounding cases are call centers with marketers. A recent case in Alabama has both. This case is also significant since it targeted many people who worked at the compounding pharmacy including sales representatives, billers, managers in addition to the owners and pharmacist.

On May 6, 2019, ten defendants were charged in a 103-count indictment, including a nurse practitioner, owners, a pharmacist, managers, sales representatives and billers, of an Alabama based pharmacy, Northside Pharmacy doing business as Global Compounding Pharmacy. 

The indictment charges them with fraudulently billing health care insurers and prescription drug administrators for over $200 million in prescription drugs.  An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.  The charges stem from a larger investigation that has to date resulted in 18 additional individuals being charged and signing plea agreements. 

According to the indictment, Global which allegedly described itself as “one of the top three largest compounding pharmacies in the United States,” primarily shipped compounded and other drugs from its Alabama facility, but did most of its prescription processing, billing and customer service at its “call center” in Clearwater, Florida. The company hired sales representatives who were located in various states and were responsible for generating prescriptions from physicians and other prescribers.  The company also worked with affiliated pharmacies.

The indictment describes a multi-faceted operation in which the defendants billed for medically unnecessary drugs.  The indictment alleges that the wrongdoing included:  

• paying prescribers to issue prescriptions; 
• directing employees to get medically unnecessary drugs for themselves, family members, and friends, to be filled and billed by Global and other related pharmacies; 
• altering prescriptions to add non-prescribed drugs including controlled substances such as Tramadol and Ketamine; 
• automatically refilling prescriptions—often as many as 12 times—regardless of patient need; 
• routinely waiving and discounting co-pays to induce patients to obtain and retain medically unnecessary drugs; and 
• billing for drugs without patients’ knowledge and hiding that conduct from patients by mailing the drugs to the home of Global's owner and president.  

According to the indictment, the defendants evaded and obstructed audits and questions about billings through various efforts, including by providing false information in response to audits and diverting their billing through affiliated pharmacies.  The defendants allegedly billed health insurance plans and their prescription plan administrators over $200 million and were paid over $50 million.

Owners of Arizona Home Health Care Business Sentenced to Prison for Medicare Health Care Fraud and Misprision of a Felony

A husband and wife owner of a home health business in Tucson, Arizona have been sentenced after guilty pleas in federal court. The case involved upcoding of services, billing for services of physicians or nurse practitioners when those professionals did not perform the services and for the forging of some names of the Medicare providers. Husband owner Stephen Allen Lamont pled guilty to federal health care fraud. 

The wife Elvia Lorena Lamont plead guilty to "misprision of a felony" which is a felony that does not have fraud as an element and we attorneys like to use it where possible as an alternative plea. Misprision of a felony is used where someone knows of a felony but conceals it and does not make it known to others. Usually, with misprision of a felony one would expect probation, but in this case both owners received a federal prison sentence.

In his plea agreement, Mr. Lamont admitted that he knowingly submitted false claims for services to Medicare. Mr. Lamont admitted that he fraudulently billed for services that were provided by nurses, medical assistants and a phlebotomist as if they had been performed by a medical doctor or nurse practitioner. Mr. Lamont also admitted that he upcoded or billed at the highest complexity level in order to increase the billings. 

On some occasions, Mr. Lamont admitted that he forged the signature of a medical doctor or other Medicare-approved provider before the claims were submitted for reimbursement. Elvia Lamont admitted that she knowingly shared in the proceeds from the Medicare fraud and concealed it from authorities.  

Kentucky Cardiologist Sentenced to 60 Months for Health Care Fraud and False Statements Relating to Implanting Medically Unnecessary Stents and Falsifying Degree of Stenosis in Medical Records

Credit: The Daily Independent

On May 2, 2019, well-known Kentucky cardiologist Dr. Richard E. Paulus was sentenced, by U.S. District Court Judge David L. Bunning, to serve 60 months in federal prison for health care fraud and false statements almost three years after his trial and an acquittal by the court that got reversed on appeal. 

In October 2016, a federal jury convicted Dr. Paulus of one count of health care fraud and ten counts of making false statements relating to health care matters, after hearing evidence that he exaggerated what he saw on patients' angiograms and then defrauded Medicare, Medicaid, and private insurers, by implanting medically unnecessary stents in his patients and falsifying the degree of stenosis in their medical records. The case was started by a complaint to the Board about the number of stent surgeries performed and their medical necessity.

After the trial, the district court granted Dr. Paulus’s motion for an acquittal.  The Sixth Circuit Court of Appeals later reversed that decision, on June 25, 2018, and reinstated Dr. Paulus’s conviction, resulting in his formal sentencing. This is very unusual that a district court grants the motion for acquittal and also unusual that the conviction was reversed on appeal.

After 6 Week Trial, New York Doctor And Physical Therapist Found Guilty Of Health Care Fraud, Conspiracy to Make False Statements Relating to Health Care Programs Medicare And Medicaid and Other Counts With Allegations of Sham Owner, Falsified Medical Records, Kickbacks.

A recent health care fraud case involved the alleged unlicensed practice of medicine and a  physician allegedly posing as the owner of medical clinics in order to satisfy New York  law that medical clinics be owned and operated by a medical professional. When that occurs the loss amounts can be large since the entire clinic can be viewed as a fraud with all billings suspect. 

On May 9, 2019, after a six-week federal jury trial, doctor Paul J. Mathieu and physical therapist Hatem Behiry were each convicted of one count each of conspiracy to commit health care fraud, mail fraud, and wire fraud; and conspiracy to make false statements relating to a health care program; as well as the substantive offenses of health care fraud, mail fraud, and wire fraud.  This trial was held in the Southern District of New York. 

Between 2007 and 2013, the government alleged that Dr. Mathieu fraudulently posed as the owner of three of six medical clinics in Brooklyn (the “Clinics”), which were all in fact owned by a non-physician and alleged co-conspirator Alexksandr Burman. Mr. Burman has already been sentenced in a related case to 120 months in prison. 

The government alleged that from 2009 to 2013, Dr. Mathieu also directly participated in the fraudulent billing practices of the clinics, by visiting several of the clinics on a weekly basis, where he would sign stacks of false and fraudulent medical charts, and issue referrals for expensive additional testing, occupational therapy, and physical therapy, including for physical therapy purportedly provided by Mr. Behiry. It was alleged at trial that during this time period, Dr. Mathieu did not see any patients and simply fabricated medical records falsely stating that he had seen and treated such patients. 

California Psychologist and Doctor Charged with Fraudulent Workers’ Compensation Evaluations Where Psychologist Was Not Certified as a Qualified Medical Examiner and Doctor's Certification Had Lapsed

In billing for evaluations of workers' compensation patients, health care providers should be very careful to ensure that they do not misrepresent themselves as a certified  Qualified Medical Examiner (QME) on a medical legal evaluation or billing statement. 

In addition, it is important to ensure that the bills for medical legal expenses have been reviewed so that the criteria for medical-legal billing has been met. A recent case shows how a report by two provider who were not properly certified QMEs led to criminal insurance fraud charges. 

On May 7, 2019, psychologist Danita Stewart and Dr. Catalino Dureza were charged for allegedly submitting fraudulent insurance claims for Medical Legal Evaluations. They are presumed innocent and charges are not evidence.

Dr. Stewart, a licensed psychologist, allegedly submitted 36 fraudulent insurance claims between April 2015 and June 2015 to five different insurers for Medical Legal Evaluations for a total of $90,714. A Medical Legal Evaluation is conducted to evaluate an employee’s work-related injury and is governed by the California Labor Code. 

Even though Dr. Stewart was a licensed psychologist she was not certified as a Qualified Medical Examiner as required to conduct and bill for Medical Legal Evaluations. Dr. Stewart allegedly conducted these fraudulent evaluations at clinics in Fresno, Tulare, and Kern Counties. Dr. Stewart was charged with 36 felony counts of Penal Code Section 550(a)(1) [one for each report], and 1 felony count of Penal Code Section 550(a)(7).

Dr. Dureza, a licensed medical doctor, had obtained the proper certification to conduct and bill for Medical Legal Evaluations, but his certification lapsed. Dr. Dureza allegedly continued to conduct and bill for Medical Legal Evaluations, and once he was recertified he conducted and billed for unauthorized Medical Legal Evaluations. Between January 2014 and May 2015, Dr. Dureza allegedly submitted 17 fraudulent insurance claims for Medical Legal Evaluations conducted in Fresno County to five different insurers for a total of $16,292. This is not a large loss amount but shows that they will prosecute for amounts under $25,000. Dr. Dureza was charged with 17 felony counts of Insurance Code 1871.4(a)(1).

Whether or not someone is a QME is a public record so it appears the insurance carriers must claim that they paid these bills understanding that the providers were CMEs. I have seen cases where a biller has placed a QME, IME and AME near the providers' name, not realizing that there could be confusion on what type of report is being billed. The carriers have been aggressive about billings for these reports even though the providers could have billed for treatment without a QME certification.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

California Pharmacist Pleads Guilty in Federal Court in Los Angeles to Illegal Distribution of Prescription Opioids and Laundering the Proceeds of the Illicit Sales

The government likes giving catchy names to certain  investigations. A recent federal and state investigation into corrupt pharmacies, for example, was called dubbed “Operation Faux Pharmacy.” 

One of the cases from this investigation has resulted in a pharmacist and pharmacy each pleading guilty in federal court to one federal count of distributing oxycodone and one count of money laundering relating to the revenue generated by the sales. 

On April 29, 2019, California pharmacist Pauline Tilton and her pharmacy Oasis Pharmacy pleaded guilty to a federal charge of illegally distributing the opioid oxycodone, admitting in the plea agreement that she filled hundreds of counterfeit prescriptions. The red flag in this case was that the DEA number of the prescribing physician on the prescriptions was of a retired doctor.

Fifteen California Chiropractors Charged in State Case Filed by L.A. District Attorney's Office Alleging Unlawful Referral Fees and Insurance Fraud

One issue that arises is when are referral fees illegal and when are they legal marketing, promotion or management fees? A recent case shows how important it is for medical professionals to obtain legal opinions before they enter into such agreements. 

Chiropractors in Southern California were stunned when fifteen chiropractors were charged by the Los Angeles County District Attorney's Office for alleged illegal referral fees from January 31, 2015 to June 30, 2018. A copy of the Felony Complaint can be downloaded here. 

The defendant chiropractors are presumed innocent and a felony complaint is not evidence. The charges include: 

🔺 insurance fraud in violation of Penal Code Section 550(a)(1) involving four carriers (Alliance United, Nations Insurance, Farmers Insurance and Geico Insurance); 

🔺 conspiracy to commit insurance fraud in violation of Penal Code Section 550(b)(3);

🔺  participating in patient referral rebates as licensed chiropractors.

In addition, the chiropractor who is alleged to have been the organizer of the referral business was charged with additional counts of money laundering (Penal Code Section 186.10) and failure to file tax returns for certain years. 

Given the provisions of the California Insurance Code, Business and Profession Code and Penal Code when it comes to accepting compensation for the referral of a patient, it is key to ensure that any referral arrangements are compliant with the law. 

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Pennsylvania Operating Officer Charged Along With Her Husband With Mail Fraud, Embezzlement from Healthcare Benefit Program for Alleged False Reimbursement Expenses

Given that hospital employees are paid essentially out of government healthcare and insurance funds, cases involving hospital officers and key employees are often prosecuted in a higher profile and federal manner than other types of businesses. In addition, government employees - especially those in law enforcement - can also be charged more harshly due to their position of authority and special skills. 

A recent Indictment shows how this played out for one couple where the wife worked as an executive at a hospital and the husband worked as a detective with the local district attorney's office. 

On April 19, 2019, Stephanie J. Roskovski and her husband, Scott A. Roskovski, were indicted by a federal grand jury in Pittsburgh on charges of mail fraud, conspiracy to commit mail fraud, embezzlement from a healthcare benefit program, conspiracy to commit money laundering, money laundering and false statement in a loan application. An Indictment is an accusation and is not evidence. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

The Indictment alleges that the Roskovskis, during the years 2011 through December 2017, perpetrated a fraud totaling more than $1.3 million on Butler Healthcare Providers, d/b/a Butler Memorial Hospital, where Stephanie Roskovski was employed and, for much of that time, served as the hospital’s Chief Operating Officer. 

During the time, Scott Roskovski was employed as a detective with the Butler County District Attorney’s Office where he conducted investigations involving fraud and other financial crimes. Counts One through 23 of the Indictment allege that the defendants conspired to and did defraud Butler Healthcare Providers by submitting requests to Butler Hospital for alleged business-related expenses that were used, or intended to be used, for personal expenditures.