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. 

Federal Charges Can Come From Billing Private Health Insurance: San Francisco Acupuncturist Indicted On Health Care Fraud Charges For Alleged False Billing and Upcoding

We are seeing an increase in investigation of acupuncturists and chiropractors relating to billings to private insurance companies. The charges can result from upcoding, billing on the wrong dates, miscoding and other acts and omissions. There is a difference between fraud and billing errors. Criminal fraud cases require proof beyond a reasonable doubt of an intent to defraud.

Health care providers have often thought that if they are not billing Medicare or Medi-Cal, they will not be the subject of federal investigation. Now that private insurance is subsidized by the government for low income individuals, there is a significant push to investigate these cases. In addition, private insurance companies are submitting the cases for prosecution. One recent case shows what these cases can look like. It also show that coding matters and claim submissions if not accurate can lead to fraud allegations.

On March 7, 2019, a federal grand jury indicted San Francisco acupuncturist Haichao Huang, charging him with health care fraud and making false statements relating to health care matters.  An indictment is not evidence and Mr. Huang is presumed innocent. 

According to the indictment, the government alleges that from February 2013 through June 2018,  Mr. Huang, age 46, was a health care provider who offered acupuncture, physical therapy, massage, and other services at his office in San Francisco.  The indictment alleges that Mr. Huang submitted claims for reimbursement to his patients’ health insurance plans, claiming that he provided reimbursable services and treatments when, in fact, he knew that the billings were false and not properly reimbursable.  

The indictment gives three examples of the ways in which Huang allegedly submitted billings for reimbursement.  First, Mr. Huang allegedly submitted requests for reimbursement for acupuncture and other treatments when, in fact, the patient had received either much shorter periods of treatment or no treatment at all.  This could be an upcoding situation or what is called "ghost billing" (billing for service that was not provided).

Second, after a patient reached the limit of acupuncture sessions allowed by the relevant insurance plan, Mr. Huang allegedly billed the plan for other types of treatments and services that were not provided in order to continue receiving improper reimbursements.  

California Board And Bureau Investigations: Frequently Asked Questions by Licensed Professionals During Board Investigations And Requests For Records

In our practice, we represent a variety of professions before the California administrative boards and bureaus. Here are nine frequently asked questions and answers:

1.  I have received a request for a patient or client file from my licensing board. What should I do?

This is the time to be the most proactive. The earlier you can prevent an investigation from going forward, the better. Once an Accusation or disciplinary charge is filed, it is difficult to unwind it. We find that often charges were filed because the professional did not adequately address the investigation at an early stage.

Each case is different and varies upon the facts. No one strategy works for each case. However, an experienced objective attorney can help you prevent complaint from turning into disciplinary charges or mitigating the problem.

One important piece of advice that applies to most cases (but not all): do not simply produce the file and nothing else. Here are some of the things, among many, that can be done at this early stage:

(1) Take the opportunity to ensure the board has full access to all relevant information.

(2) If there were problems with this particular client or patient, a letter or memorandum summarizing the history, facts and issues will help the investigator evaluate the case.

(3) Have an experienced attorney or other objective party review any submissions since you will have to live with them for several years if the case is investigated further and/or is the subject of disciplinary proceedings. Remember that everything you do is evidence.

(4) If there is significant handwriting in the file, dictate the notes so the handwriting is easy to read. Have your attorney or other objective party ensure that the records are easy to understand.

(5) If this case had a bad or poor outcome (even if that is part of the risk that was disclosed to the client or patient), it may be useful to have your attorney hire an expert and evaluate the file in order to help prepare a thorough response explaining the case or matter.

(6) The board can be contacted to determine what stage the investigation is at so that the appropriate response. This is often easier for your attorney to do since the investigator may be open with him or her. In addition, anything you say is evidence and even impromptu comments like "I didn't do anything wrong" or "I don't remember this person" can be used against you later in ways that are difficult to anticipate when they are said.

(7) Do not alter, backdate or create any records unless such records are properly created and dated.

(8) Once you hire an attorney, have him or her send a letter of representation so the board contacts the attorney and does not show up at your office for a surprise interview.

2.  My licensing board is accusing me of misconduct. What should I do?

A governing board will often state that it is investigating suspected fraud, abuse or other misconduct, but not tell you specifically why. You need to find out the facts supporting the board's accusation. An experienced attorney can help you immeasurably with this process. Once the board is notified that you have hired an attorney, it is not permitted to contact you directly. The attorney can speak with the agency's investigators to learn the factual basis of the allegations. The attorney can then direct you to take specific steps to protect your license.

3.  Why can't I (or shouldn't I) talk to the licensing board myself?

You do not need an attorney to communicate with your licensing board, but it is an excellent idea. An attorney can speak on your behalf and obtain information without making any admissions that might hurt you. Anything you say to a board, even though it may seem innocent, might be used against you later. In addition, it is difficult for you to be objective and create an intelligent and forward thinking strategy.

4.  I already spoke to the licensing board. Is it too late to hire an attorney?

No. Licensing boards do not always act quickly. An attorney can help you find out what the board is intending to do. The attorney may be able to help you submit additional information or documents for the board to consider. The attorney may also be able to negotiate a settlement that would allow you to keep your license.

5.  The licensing board has presented me with a proposed disciplinary order. Do I have to sign it?

No. You can reject it and try to negotiate other terms. If you and the licensing board cannot agree on terms, the board will likely bring formal disciplinary proceedings.

Having an attorney advise you is important. Attorneys who specialize in administrative law understand both the board's concerns and the nature of your profession. This insight often enables them to negotiate settlements that satisfy the board's need for oversight as well as your need to maintain profitability.

A settlement enables you to avoid formal disciplinary proceedings. When a settlement is not possible, you want representation by an attorney who is familiar with procedural rules as well as the laws and regulations governing your profession.

6.  I have an administrative hearing scheduled before a licensing board or regulatory agency. Do I need an attorney?

You are not required to have legal counsel, but it is an excellent idea. The agency will be represented by an attorney and, in fact, you will be at a disadvantage without one.

Many procedural and evidentiary rules must be followed in presenting a defense. Even if you feel you have a good defense, you might not be permitted to present it if you don't follow the rules. An attorney who specializes in administrative proceedings will be able to present your defense in the proper manner.

7.  I have been charged with or convicted of a crime. Will this affect my license?

It likely will. Many regulatory agencies require that you report a criminal charge or conviction, even if it seems unrelated to your practice. Certain charges or convictions may result in the suspension or revocation of your license. This is one reason why it is critical to coordinate any criminal defense with an attorney specializing in administrative law and board defense at the earliest possible stage.

An attorney specializing in administrative law will help you determine the reporting requirements relevant to your profession. If reporting is required, the attorney will help you present the facts in the best light possible. If you fail to report, this can be considered unprofessional conduct and can be used against you later. Honesty is the hallmark of professionalism and a subsequent dishonesty (or even lack of forthrightness) while you are defending your criminal charge can harm your professional license. If you have negative facts in your criminal case, you can win your criminal case and still face discipline from your board in many circumstances. We advise a global strategy that looks forward to the next several years and includes all criminal, civil, and administrative consequences.

8.  Can I apply for a license if I have a criminal record?

It is difficult, although not impossible, for an applicant with a criminal record to obtain a professional license. An attorney skilled in licensing law can help you submit evidence of your character and rehabilitation, so as to present your application in the best light possible. In short, you will need to have a thorough application, numerous support letters, and significant documentation to explain the charges and why you have changed and what you have done to warrant you being granted a professional license. It helps to have an objective attorney who can help you build the best administrative record possible.

9.  I want to avoid problems with my licensing board. How can I make sure I operate my business in compliance with the law?


Many professionals retain a law firm to review their business structure and office policies to ensure they are in compliance with the laws and regulations governing their business. An attorney skilled in administrative law will have knowledge of the common pitfalls for your particular business and can show you where your practice might be vulnerable to administrative scrutiny. The attorney can assist in educating your staff about the law relevant to your practice through in-office presentations or the preparation of formal office policy and procedure handbooks. It is also common for professionals to retain a law firm on an ongoing basis for a monthly fee to have access to an attorney to questions as they arise.

Posted by Tracy Green, Esq.  Any additional questions or comments should be directed to tgreen@greenassoc.com.  Tracy Green is a principal at Green and Associates. The firm focuses its practice on the representation of professionals, particularly health care professionals including individual physicians, corporate providers and group practices.

Tracy Green is one of the best Los Angeles Board attorneys, one of the best Los Angeles professional license defense attorneys and is committed to excellence.  You can email her at tgreen@greenassoc.com or call her at 213-233-2261.   Their website is: http://www.greenassoc.com/

Doctor & Acupuncturist Sentenced In Manhattan Federal Court For Operating Medical Clinic That Billed Under New York's "No Fault" Accident Law

On January 31, 2010, in Manhattan Federal Court, United States District Judge Lewis A. Kaplan sentenced Romilla Anwar (a physician) to 30 months in prison and Anatoly Sunik (an acupuncturist) to 12 months in prison on health care fraud charges relating to treatments relating to injuries sustained in automobile accidents billed under New York's "no fault" law.

This sentence came after the men each pleaded guilty in April of 2009, stemming from their alleged operation of the Avenue K Medical Clinic in Brooklyn, New York (the "Clinic"). The Avenue K Clinic was alleged to be primarily engaged in the treatment of individuals who filed no-fault insurance claims with insurance claims. Under New York state law, no-fault insurance enables the driver and passengers of a vehicle registered and insured in New York to obtain benefits of up to $50,000 per person or injuries sustained in an automobile accident, regardless of fault.

The arrests in this case were originally in July 2008 when 12 people were arrested. According to the Criminal complaint, Indictment, guilty pleas and court filings from May 2006 to June 2008, the Clinic routinely billed automobile insurance companies under the no-fault program for medical "treatments" which were either never provided or unnecessary, because the person being "treated" did not medically need the treatments.

In the first two years of its operation, the Clinic allegedly billed insurance companies a total of approximately $3.6 million for no-fault medical services on behalf of more than 500 patients and, as of June 2008, had received approximately $1.2 million from these insurance companies.

Dr. Anwar served as the Clinic's nominal owner and treating physician, and, in that role, she allegedly performed perfunctory examinations of patients and recommended treatments she knew to be unnecessary. At her guilty plea, Dr. Anwar stated: "On many occasions individuals were prescribed DME [Durable Medical Equipment] which were unnecessary because the individuals were either slightly injured or not injured at all. I also ordered MRIs which were unnecessary due to the fact that the individuals were either slightly injured or not injured at all."

Mr. Sunik, the acupuncturist, allegedly billed insurance companies for 30 minutes of acupuncture even though he often provided only a few minutes of treatment. A physical therapist was also charged in the original Indictment.

One of the Clinic's owners was already sentenced: Sviatoslav Jadan (30 months in prison). Another owner Samuel Vilshanetski is scheduled to be sentenced on March 19, 2010. It was alleged that the owners of the Avenue K Clinic engaged "runners" (who were three of the initially charged defendants) to recruit patients for the Clinic for treatment. The owners allegedly paid the runners an average of approximately $2,000 per patient but paid them only after the referred patients had received enough treatments for hte patient to be profitable.

There were law firm links a well since it was alleged that runners made more money when a patient was accepted as a law office client because certain law offices paid fees to the Clinic for each patient signed up as a client.

In cash kickback cases, one issue that arises is how was the cash obtained? In this case, it was alleged that there were various means. For example, money was allegedly laundered through one other defendant who owned medical transportation companies. The Clinic allegedly wrote checks to this defendants' medical transportation companies for sham invoices. This means that no transportation was provided but that the transportation company operated like a check cashing company where 90% of the money was returned to the Clinic and kept 10% for a check cashing fee. This enabled the Clinic to claim the invoices as a deductible business expense since kickbacks are not deductible.

In both California and New York, state and federal prosecutors are increasing the prosecutions of attorneys and health care professionals in the personal injury/automobile accident field. I expect to see more cases filed this year.

Any questions or comments should be directed to Tracy Green, a very experienced health care fraud attorney, at tgreen@greenassoc.com. Tracy Green is a principal at Green & Associates in Los Angeles, California.

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers and attorneys in insurance and health care fraud related matters in California and in other states, including New York and Florida. Their website is: http://www.greenassoc.com/