California Rehabilitation Therapy Company With 11 Skilled Nursing Facilities Settles Medicare False Claim Allegations for Alleged Unnecessary or Unreasonable Services

Qui Tam Case Involving SNFs

Skilled nursing facilities (SNFs) which offer rehabilitation therapy services have a large number of billing specific rules and regulations. The charting for the SNFs is also demanding on the staff. Issues with charting and following billing rules and regulations can create risks of audits and qui tam or false claim lawsuits for SNFs. A recent case shows how such issues play out. This case was initiated by a "whistleblower" who was a former director of rehab and will get a $360,000 payout as part of the settlement. The qui tam case is captioned United States ex rel. Pennetti v. Interface Rehab, et al., No. CV-14-4133 (C.D. Cal.).

On or about July 23, 2021, Interface Rehab (Interface), headquartered and operating in Orange County, California agreed to pay $2 million to resolve allegations that it violated the False Claims Act by causing the submission of claims to Medicare for rehabilitation therapy services that were allegedly not reasonable or necessary. The claims resolved by the settlement are allegations only and there has been no determination of liability. 
It is very common for these cases to settle since the legal and expert fees alone can cost hundreds of thousands of dollars. Worse, if the case goes to trial and the health care facility loses, the provider can be barred from Medicare. A settlement offers a certain result. However, these cases need to be fought aggressively in order to keep the settlement payments down or to get the cases dismissed if possible.  

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

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.

Northern California Pain Management Doctors Agree To Pay $260,000 To Settle Civil Claims Following DEA Inspection Regarding Adequacy of Controlled Substances Records

Drug Enforcement Administration (DEA) inspections can have significant financial repercussions if the logs and records of controlled substances are not properly maintained. A recent case illustrates how this happens and is a reminder for practices and pharmacies to be sure their business is compliant in this regard.  

In January 2014, the DEA inspected the controlled substance ordering and dispensing records relating to Pain Medicine Consultants, Inc., a medical practice which had offices in multiple Bay Area locations (Novato, Pleasant Hill, and Pleasanton). 

The government alleged that the DEA inspection uncovered multiple violations of the Controlled Substances Act, 21 U.S.C. § 801 by the practice and the physicians in the group who have the DEA registrations. The government specifically alleged that between January 10, 2012, through January 17, 2014, the medical practice and the physicians failed to:

(1) keep and maintain adequate records pertaining to controlled substances, as required by 21 C.F.R. § 1304, et seq.; 

Los Angeles Dermatologist Pays $2.6 Million to Resolve False Claim Allegations He Billed Medicare for Unnecessary Mohs Skin Cancer Surgeries

On April 10, 2017,  Dr. Norman A. Brooks, M.D., the owner of The Skin Cancer Medical Center in Los Angeles paid the United States $2,681,400 as part of a settlement to resolve allegations that he submitted bills to Medicare for Mohs micrographic surgeries for skin cancers that were medically unnecessary. In settling the case, Dr. Brooks did not admit liability in the matter.

As part of the settlement, Dr. Brooks and his entity entered into a three-year Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General. Under the Integrity Agreement, Dr. Brooks will establish and maintain a compliance program that includes, among other things, mandated training for him and his employees and review procedures for claims submitted to Medicare and Medicaid programs.

The settlement resolves allegations made in a lawsuit filed by Dr. Brooks' former Brooks employee Janet Burke under the qui tam, or “whistleblower,” provisions of the False Claims Act, which permit private parties to sue on behalf of the government and receive a share of any recovery. For her role in the case, Ms. Burke will receive $482,652.

          

The lawsuit alleged that Brooks falsely diagnosed skin cancer in some of his patients so that he could perform, and bill for, Mohs surgeries. Mohs surgery is a specialized surgical procedure for removing certain types of skin cancers in specific areas of the body, including the face. The surgery is performed in stages during which the surgeon removes a single layer of tissue which undergoes a microscopic evaluation. 

The surgeon performs additional stages, if necessary, until all of the cancer is removed. Given the complexity and time required to perform the procedure, Mohs yields a higher Medicare reimbursement than other procedures used to remove skin lesions.

Dermatology is under greater scrutiny by government billing programs (Medicare, TriCare, etc.) and we have seen an increased rate of audits. A compliance plan is never too late to start and can help prevent whistleblower cases when a practice self-reports or discovers the employee's allegations during employment or at an exit interview.

Posted by Tracy Green, Esq.
Email: tgreen@greenassoc.com
Work: 213-233-2260

Surrendering a Healthcare or Medical License While Disciplinary Charges Pending Will Get You a Medi-Cal Suspension

When a physician, nurse or any licensed healthcare provider has a state disciplinary proceeding pending, one of the issues that arises is whether they should surrender the license. In order to analyze this issue, one question is whether the person will be working in healthcare in any capacity in the future.

Imagine a case where a licensed physician or nurse decides to stop practicing medicine but still wants to work in healthcare businesses and wants to surrender his or her license while an Accusation is pending.  Another example is where the physician or nurse is not using their New York license and ends up on probation in New York due to being on probation in California and decides to surrender the New York license. What happens to their ability to work at a healthcare business that bills government programs?

Under California Welfare and Institutions Code Section 14043.6 if your healthcare license is suspended while an Accusation is pending (or revoked after a hearing), Medi-Cal will automatically put you on a "Suspended and Ineligible" List on the effective date of the suspension or revocation. If the individual is suspended from Medi-Cal, he or she cannot work, own or operate a business that receives Medi-Cal or Medicare funds in any capacity.

I am seeing more frequently people who surrendered their license and and did not understand that this is one of the harsh penalties of surrendering that is not set forth in the surrender agreement. It also seems some attorneys do not tell their clients that this will happen and the person finds out a year or more later of this consequence after they have been working in healthcare.

We have handled a number of cases in getting people reinstated to Medi-Cal in these situations and it is an unpredictable and long process. In one case, the healthcare provider surrendered one license and had another active one that was not surrendered but the suspension went into effect and jeopardized the ability to work in healthcare. In another case, a nurse surrendered a license while an Accusation was pending and then was not able to work at the healthcare business in which he was a part-owner in any capacity.  We have also handled audits for overpayment where a healthcare provider did business with an entity or person suspended under Medi-Cal.

In sum, in analyzing whether it makes sense to surrender any healthcare license in California, the licensee should understand that a surrender will prevent the person from working in any healthcare facility that takes government funds (Medicare and Medi-Cal) even if the person is not working as a licensed health care provider. Make sure you look at all the angles in making these decisions.

Posted by Tracy Green, Esq.
Green and Associates
Email: tgreen@greenassoc.com
Office: 213-233-2260

Dietary Supplements Are Subject to FDA Investigation. GNC Entered Into Agreement with Department of Justice to Keep Potentially Illegal Dietary Supplements Out of the Marketplace.

Nutritional supplements are often recommended or sold by practitioners such as chiropractors, naturopathic doctors and other providers. Determining what ingredients are in the products is difficult and a recent settlement shows that retailers will be held responsible for selling products with misbranded supplements or that promise to treat or cure a disease. 

All providers who sell supplements should ensure that the products do not include unlawful dietary supplements to the extent possible. How can a retailer determine if supplements are from natural plants or are synthetic? 

On December 7, 2016, the world’s largest dietary supplement retailer, GNC Holdings Inc. (GNC), entered into a wide-ranging agreement with the Department of Justice to reform its practices related to potentially unlawful dietary ingredients and dietary supplements, and has further promised to embark on a series of voluntary initiatives designed to improve the quality and purity of dietary supplements.

The non-prosecution agreement resolves GNC’s liability for selling certain dietary supplements produced by a firm currently under indictment.  As part of the agreement, GNC has agreed to pay $2.25 million to the U.S. government and cooperate in dietary supplement investigations conducted by the government.

A lengthy investigation conducted by the U.S. Food and Drug Administration (FDA), the U.S. Attorney’s Office for the Northern District of Texas, and the Consumer Protection Branch of the Department of Justice’s Civil Division resulted in allegations that GNC’s practices related to ensuring the legality of products on its shelves were lacking. 

According to an agreed-upon statement of facts that accompanies the non-prosecution agreement, GNC admitted it engaged in acts and omissions that allowed a misbranded supplement— OxyElite Pro Advanced Formula, a product of Dallas-based USPlabs LLC (USP Labs)—to be sold at GNC locations nationwide in 2013.  The statement of facts notes that GNC sold the product based on representations from USP Labs that ingredients contained in the product complied with the law.  It further notes that GNC did not undertake additional testing or require additional certifications to confirm such representations or to verify that the ingredients in the product were as represented. 

USP Labs was indicted in November 2015 and is awaiting trial.  The indictment alleges, among other things, that USP Labs engaged in a conspiracy to import ingredients from China using false certificates of analysis and false labeling, and then lied about the source and nature of those ingredients after it put them in its products.  According to the indictment, USP Labs told some of its retailers and wholesalers that it used natural plant extracts in some of its products, when in fact it was using synthetic stimulants manufactured in a Chinese chemical factory.

California Sleep Clinic Agrees To Settle False Claims Case for Billing Medicare for Diagnostic Sleep Tests. Pays $2.6 Million Fine and Loses Provider Numbers for 3 Years.

Diagnostic sleep studies have been under scrutiny and audit by Medicare and private insurers for the past 5 years. Recently, a false claims civil lawsuit resulted in a large settlement by a California sleep diagnostic clinic. 

One requirement of this recent civil settlement was that the business lose its provider numbers and not be allowed to re-enroll for 3 years. That essentially closes the business and does not allow it to be sold to a third party. Essentially, this shows the government decided it wanted this provider out of the program. 

On December 28, 2016, Bay Sleep Clinic, its related businesses — Qualium Corporation and Amerimed Corporation — and their owners and operators, Anooshiravan Mostowfipour and Tara Nader agreed to pay $2.6 million to settle allegations that they fraudulently billed the Medicare program. The claims resolved by this settlement are allegations only and there has been no determination of liability.

The allegations against the Defendants were set out in an amended False Claims Act complaint filed by the United States on August 8, 2016. According to the complaint, California residents Mostowfipour and Nader own Amerimed Corporation (that was doing business as Amerimed Sleep Diagnostics and Amerimed CPAP Specialists) and Qualium Corporation, which operated twenty sleep clinics doing business as Bay Sleep Clinic.  

The government alleged that as early as April 2002, Mostowfipour, Nader, and their businesses fraudulently billed Medicare for sleep tests performed by technicians lacking the licenses or certifications required by Medicare payment rules.  It was also alleged that there was billing to Medicare for sleep tests that allegedly were conducted at unenrolled and unapproved locations.  

Specifically, the government alleged that defendants regularly falsified documents to make it appear that a sleep test had been given at one of the two Medicare-approved locations when, in fact, the test had been conducted at another, unapproved facility.  

Owner Of Pennsylvania Medical Staffing Company Sentenced For Billing Medicaid for Services Not Provided, Provided by Others or Not Qualified to Provide Services

Medical staffing companies need to be careful when billing for services and for providers. One issue that arises is when a licensed provider is not available and the services are provided by a different person or someone who is not licensed yet. 

We have seen this with home health agencies as well. Companies must be very careful about controls on who performs services in staffing agencies. A recent staffing company case shows what can happen when there are shortcuts and false documentation. The case can go criminal.

On December 21, 2016, Rose Umana, owner and operator of Vision Healthcare Services, Inc. (Vision) of Pennsylvania, was sentenced by United States District Court Judge Sylvia H. Rambo to 36 months in prison. Vision is a medical staffing company and home care services provider servicing several Pennsylvania counties and has been enrolled under Medicaid since 2006. This sentence was for making false statements relating to health care matters, engaging in monetary transactions involving criminally-derived property, and identity theft.  

According to the United States Attorney's Office, between January 2012 and January 2014, Ms. Umana, in her position as owner of Vision, created false identification documents and fictitious occupational licenses for workers. It is also alleged that Ms. Umana and Vision: 
(1) submitted bills to Medicaid for medical services not provided by the workers, 
(2) billed Medicaid for services provided by someone other than the person claimed to be the provider, and 
(3) billed Medicaid for services not provided or provided by someone not qualified to provide the service.

Eyeland Optical Centers Settles Civil False Medicaid Claims Case For Billing for More Than 4 Lenses Per Year and Not Self Reporting

On December 6, 2016, Eyeland Optical Centers, a chain of eye care centers in Pennsylvania settled allegations under the False Claims Act with the U.S. Attorney's Office.  

The settlement resolves allegations that Eyeland had billed Medicaid for more than four lenses per year, in violation of Pennsylvania’s Medicaid regulations, and retained those payments even once it became aware that it had done so. This type of billing happens when patients lose glasses or break them but there are limits on what state programs pay for in order to avoid abuse.

The self-reporting rules in the OIG's Civil Monetary Penalties (CMP) Law are beginning to be enforced more aggressively.  The CMP law requires that overpayments must be reported and returned within sixty days of the date that the overpayment was identified or that a related cost report was due (whichever is later). The default penalty for this type of violation is $10,000 per item or service. 

In addition, computerized or "big" data is being used to identify billing irregularities or violation of billing rules. This case shows how this failure to self-report was used as evidence in the false claims case and how easy it was for the government to use big data to identify billing for services not allowed. Eyeland has agreed to pay $135,328.56 to resolve these claims.  

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law
Office: 213-233-2260
Email: tgreen@greenassoc.com

Owner Of New Jersey Mobile Diagnostic Testing Facility Sued For Submitting Claims To Medicare for Cardiologist Who Was on Pre-Payment Review

A recent federal criminal and civil qui tam case relate to a Medicare provider billing for services provided by another provider who was on pre-payment review. 

Pre-payment review is also called "paper billing" and is ostensibly designed to ensure that doctors or providers submit claims within established rules and regulations, and which required them to submit documentation, including medical records, to support the services being billed to Medicare. 

Under pre-payment review, claims for reimbursement that do not have the documentation necessary to support the services being billed are rejected by the Medicare contractor. When a provider is placed on pre-payment review, it is often the death knell for a health care business since collections grind to a halt and often legitimate claims are denied or rejected for arbitrary reasons. It used to be used to train providers but it is now often used as a way to shut down a provider's Medicare practice.

In this recent case, a cardiologist decided to find a way around the pre-payment review limitations which brought this civil case and a criminal case. On December 6, 2016, Vijay Patel of New Jersey, and his business Mobile Diagnostic Testing of NJ LLC were named in a civil federal qui tam lawsuit for allegedly knowingly submitting false claims to Medicare for thousands of diagnostic testing services they did not render.  

The civil complaint alleges that Vijay Patel had an associate who was a cardiologist and also a Medicare provider. It is alleged that from around 2009 through 2012, the cardiologist was on “pre-payment review.”  What happened is that instead of the cardiologist submitting the claims, from August 2011 through December 2012, Mr. Patel's entity and his brother's entity (Biosound Medical Services Inc. ) submitted the cardiologist's claims as if these entities had performed them instead of the cardiologist. 

Nursing Home Physicians, Be Careful. Illinois Psychiatrist Pays $908,000 to Settle Civil Allegations of False Billing for Evaluation and Management Services. 10 Year OIG Exclusion Part of Settlement.

On November 8, 2016,  a Springfield psychiatrist, Duttala Obul Reddy, settled allegations of false billing for services provided to nursing home residents in central Illinois.  The false claims lawsuit filed by the government alleged that from January 2008 through February 2013, Dr. Reddy allegedly submitted bills for evaluation and management services provided at long-term care facilities that either had not been provided or had not been provided to the extent claimed. 

Under the terms of the settlement agreement, Dr. Reddy denies the allegations that he submitted or caused submission of false claims for payment under Medicare and Medicaid for medical services. The terms of the settlement required Dr. Reddy to pay $908,000 and to agreed to his exclusion from participation in Medicare, Medicaid and all other federal health care programs for a period of 10 years. The settlement had the U.S. District Judge Myerscough enter judgment in favor of the government and against Dr. Reddy.

Attorney Commentary: Physicians who work at nursing homes are held to the same standards as private practitioners in billing. This particular psychiatrist had issues with the state licensing board due to alleged boundary violations and that may have triggered these audits. While nursing home visits may result in billing on a regular schedule, it is critical for doctors to ensure that visits are only billed if they occurred and to be very careful to avoid upcoding. The type of OIG exclusion that occurred in this case can be detrimental to a career given the pervasiveness of government funding of health care in hospitals, nursing homes and insurance.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Email: tgreen@greenassoc.com
Phone: 213-233-2260

California and Nevada Ortho Clinics to Pay $2.39 Million to Settle Civil Allegations of Improperly Billing Federal Health Care Programs for Reimported Osteoarthritis Injection Medications (Viscosupplements)

Medical offices often purchase medical devices or medications that are sold all over the world. The same product essentially will be far cheaper in Canada, France, Israel, Mexico or other countries. However, if it is not sold and approved by a U.S. company -- and covered by that company's product liability insurance and registered with the Food and Drug Administration (FDA) -- then it is NOT an approved medical device or medication.

There are many pharmacies and supply companies which sell imported devices or medications from foreign countries and the physicians or office managers do not realize that even though it is labeled the same - that an imported medication or device cannot be billed to a government program or private insurance.  For example, some years ago, we handled a number of cases here in California and Nevada where OB-GYNs bought IUDs (Copper T-380s) that were made outside the United States and were not licensed by Paraguard. There were audits by the state Medicaid programs and the doctors or clinics had to reimburse the programs and notify the patients that these were non-FDA approved devices.  None of the clients we represented had any bad outcomes, but the chain of custody is unknown and there are risks.

A couple of weeks ago in early October 2016, three orthopedic clinics agreed to settle federal and state False Claims Act allegations that they knowingly billed federal and state health care programs for reimported osteoarthritis medications, known as visco-supplements in a case out of Sacramento, California. Viscosupplements, such as Synvisc, Orthovisc, and Euflexxa are injections approved by the FDA for the treatment of osteoarthritis pain in the knee. Viscosupplements are reimbursed by Medicare, Medicaid and other federal health care programs at a set rate based on the average sales price of the domestic product.

Georgia Doctor Pleads Guilty to False Billing to Private Insurers and Medicare for Surgical Monitoring Performed by Medical Assistant

Analysis of billing data is leading to more investigations, audits and prosecutions. Anonymous complaints to the HHS-OIG Hotline at 800-HHS-TIPS are also an increased source of investigations. One recent health care fraud case against a physician came about due to both analysis of billing data and anonymous complaints to the HHS hotline.

On March 25, 2016, Dr. Robert E. Windsor, an Atlanta-area physician, pleaded guilty to health care fraud for filing claims for surgical monitoring services he did not perform before U.S. District Court Judge Amy Totenberg.

According to the charges and other information presented in court: Dr. Windsor, a licensed Georgia physician, entered into a contract with American Neuromonitoring Associates, P.C. (ANA), a Maryland corporation, to provide a medical service called intra-operative monitoring. In this medical procedure, a physician monitors a patient’s nerve and spinal cord activity during surgery to reduce potential adverse effects to the patient.

The contract stated that Windsor would provide real-time monitoring services for patients in surgery via an online platform with technologists in the operating room. Windsor was responsible for providing a final monitoring report at the conclusion of each surgery, and ANA and its sister company would thereafter bill patients and health care benefit programs, including private health insurance companies, for the monitoring. Dr. Windsor was paid a fee for each surgery monitored.  

Between at least January 2010 through July 2013, Dr. Windsor instead assigned the monitoring to a medical assistant who impersonated Dr. Windsor by using Dr. Windsor’s log-in credentials in the online platform. The medical assistant was not a doctor and was not permitted to perform the monitoring under the contract with ANA. Dr. Windsor submitted final monitoring reports which by their nature falsely stated that he had conducted the monitoring, which ANA and its sister company relied upon in billing health care benefit programs for his services. On several occasions, Dr. Windsor allegedly billed ANA for monitoring services he purportedly performed when he was actually traveling on an international flight and this type of proof was used as an example of his conduct.

In total, after collecting reimbursements from insurers, it was alleged that ANA paid Dr. Windsor over $1.1 million for monitoring services he did not perform during this time period. Sentencing for Dr. Windsor is scheduled for June 3, 2016 at 10:30 a.m.

Attorney Commentary: Big data and billing data analysis is making audits for private and government carriers easier. I have seen an increase in the number of audits for even small providers since it is much simpler to see patterns in billing that trigger red flag audits. This ability to analyze billing data makes it more important than ever for providers to be compliant given that private insurers and government providers will pursue cases criminally if there is consistent billing for services not provided.  The old days of simply making an overpayment are going away.  The use of big data analysis, the allure of whistleblower lawsuits and anonymous complaints are also reason to self-report when appropriate.  

California Medical Board Can Subpoena Medical Records From Physicians Even If Patients Object to Production

A recent opinion by the Court of Appeals is an administrative subpoena case that gives additional guidance to doctors and other professionals who have their records subpoened even when the patients or clients object to the production of records. The case is David Fett, MD v. Medical Board of California, No. B262469.

We often see cases where the Medical Board approaches patients and asks them to sign consent forms for records release while telling them at the same time that if they refuse to sign, they will simply subpoena the records. We have also had cases where the "patients" were undercover officers and the records release was simply a way to build a case against the physician.

Our experience has been that the Superior Courts will enforce the subpoenas even against the objection of the patient or where there is a criminal investigation.  This Court of Appeal case confirms that at this time, the courts will not allow patients to prevent the production of their personal medical records where the Medical Board can show good cause.

Boston Dentist to Pay $650,000 in Civil Settlement for Improper Medicaid Billing

A Boston dentist has agreed to pay $650,000 to the state’s Medicaid program (MassHealth) to resolve allegations of improperly billing for dental work at her offices in Everett, South Boston.

The January 29, 2016 settlement resolves allegations that from February 2007 through July 2012, Dr. Ekaterina Mamulashvili and her professional dental practices improperly and frequently used multiple oral examination codes to bill MassHealth for services received by the same patients on the same day.

The matter was referred to the Attorney General's (AG) Office by MassHealth after an audit uncovered concerns about Dr. Mamulashvili’s billing practices. An audit of dentists and dental practices done by the State Auditor also found issues with billing for oral examinations, including with Dr. Mamulashvili’s practices.

The AG’s Office conducted an extensive investigation into Dr. Mamulashvili and her professional dental corporations, Everett Dental Management Corporation, Sameka Dental Management Corporation in South Boston, and Malden Dental Management Center, Inc.

Under the terms of the civil settlement, Mamulashvili and her businesses will pay MassHealth $650,000 as restitution for improper billing. The settlement also requires that Mamulashvili, her employees to review and comply with all applicable state and federal statutes, and all regulations governing participation in MassHealth.

These audits in California are handled by Delta Dental and a civil settlement is certainly preferable to any criminal investigation or referral. 

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

Nation’s Largest Nursing Home Therapy Provider (Kindred/Rehabcare) Pays $125 Million to Settle Civil False Claims Act Allegations For Physical, Speech and Occupational Therapy Services Improperly Billed to Medicare

Skilled nursing facilities (SNFs) face many challenges in providing, documenting and billing therapies (speech, occupational and physical) to its patients. A recent large settlement in a false claims case brought by former employees, where the government intervened, against the nation's largest nursing home therapy provider shows other SNFs and therapy providers what they need to monitor in order to avoid similar allegations.

On January 12, 2016, contract therapy providers RehabCare Group Inc., RehabCare Group East Inc. and their parent, Kindred Healthcare Inc., agreed to pay $125 million to resolve a government lawsuit alleging that they violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary and skilled, or that never occurred.

The government’s complaint alleged that RehabCare’s policies and practices, including setting unrealistic financial goals and scheduling therapy to achieve the highest reimbursement level regardless of the clinical needs of its patients, resulted in Rehabcare providing unreasonable and unnecessary services to Medicare patients and led its SNF customers to submit artificially and improperly inflated bills to Medicare that included those services.  Specifically, the government’s complaint alleged that RehabCare’s schemes included the following:

(1) Presumptively placing patients in the highest therapy reimbursement level, rather than relying on individualized evaluations to determine the level of care most suitable for each patient’s clinical needs;

(2) During the period prior to Oct. 1, 2011, boosting the amount of reported therapy during “assessment reference periods,” thereby causing and enabling SNFs to bill for the care of their Medicare patients at the highest therapy reimbursement level, while providing materially less therapy to those same patients outside the assessment reference periods, when the SNFs were not required to report to Medicare the amount of therapy RehabCare was providing to their patients (a practice known as “ramping”);

California Podiatrist Pleads Guilty To Federal Health Care Fraud For Upcoding, Providing Services Not Medically Necessary, Using Unlicensed Staff, Improper Billing, and Altering Records

For over ten (10) years, podiatry has been a red flag for Medicare auditors. The rules for podiatry services are strict and a podiatrist recently agreed to plead guilty to Medicare fraud based solely on podiatry services.  

On October 23, 2015, a podiatrist, Neil A. Van Dyck DPM, who operated a podiatry practice in Roseville, California called Placer Podiatry pleaded guilty to health care fraud in the Eastern District of Caifornia. This was under a plea agreement and was negotiated between the government and Dr. Van Dyck’s attorney.

According to court documents, Dr. Van Dyck was a California-licensed podiatrist. Van Dyck offered “spa”-like treatments and performed routine foot care at his practice.

Between 2009 and 2014, however, the government alleges that Dr. Van Dyck submitted over $2.8 million in fraudulent claims for reimbursement to Medicare, Medi-Cal, Tricare and private insurers (where about $1 million was paid) by doing the following:

1.  Dr. Van Dyck allegedly falsely claimed that he performed more expensive procedures than he actually performed and that some of these procedures were “spa-like” rather than medical procedures;

2.  Dr. Van Dyck allegedly falsely claimed that the routine foot care that was provided was justified  because of illness or symptoms that were not present; 

3.  The treatments were allegedly performed by unlicensed staff sometimes when Dr. Van Dyck was not present at his practice; 

4.   Dr. Van Dyck allegedly altered a single-use skincare patch by cutting it into pieces and billed Medicare for multiple applications; and

5.  In response to a request for documents from an investigator for Medicare, Dr. Van Dyck allegedly altered patients’ medical records to justify his fraudulent bills.

Dr. Van Dyck is scheduled to be sentenced by Judge Garland E. Burrell Jr. on January 15, 2016. The plea agreement is sealed and thus the sentence that he faces is not know.  Dr. Van Dyck faces a maximum statutory penalty of 10 years in prison and a fine of $250,000 or twice the loss or gain but with a plea agreement it would be highly unlikely that the maximum sentence would be imposed. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Attorney Commentary: As I have seen in many cases over the years, the alteration of patient records in request to an audit or subpoena for records is being used to show fraudulent intent. While physicians may see issues in records and seek to correct them, they do not understand that changing records (unless those changes are noted in the charts on the date performed) can be used against the physician.

Moreover, physicians who bill services need a compliance plan and method for evaluating billing and procedures. Billing mistakes will happen but when it goes on for over 5 years, the billings add up. In fraud cases, it is the amount “billed” that is used for sentencing on loss amounts and not the amount “collected.” While the amount collected is relevant for sentencing, it is better for providers to catch mistakes themselves. Physicians will bill and be paid for years and assume that they must be doing it right.

Medicare is a “good faith” billing system. Medicare and Tricare pay and reserve the right to audit and challenge all billing for the prior 6 years. Do not assume that simply because you are being paid that the billing and documentation is correct. Get a compliance plan to keep your billing out of the claims that there is any “fraud,” “lack of medical necessity,” or “lack of documentation.”

Posted by Tracy Green, Esq.

Green and Associates

Email: tgreen@greenassoc.com

Office: 213-233-2260

Louisiana Psychiatrist Sentenced to Serve More Than 7 Years in Prison for Role in Medicare Fraud Case Involving Partial Hospitalization Psychiatric Services

A Louisiana psychiatrist, Dr. Zahid Imran, was sentenced in federal court in Baton Rouge, Louisiana, on August 25, 2014 to serve 86 months in prison for his role in a Medicare fraud case involving partial hospitalization psychiatric services. 

The sentencing followed his guilty plea. He was further ordered to pay $43.5 million in restitution and to forfeit all proceeds from the fraudulent scheme. Chief U.S. District Court Judge Brian A. Jackson of the Middle District of Louisiana imposed the sentence and ordered Dr. Imran to self-surrender by September 29.

According to documents filed in the case, Zahid Imran, M.D., 56, of Baton Rouge, served as the medical director of Shifa Community Mental Health Center of Baton Rouge, and co-owned Serenity Center of Baton Rouge and Shifa Community Mental Health Center of Texas.   As part of the alleged fraud, Dr. Imran admitted mentally ill patients to the facilities, some of whom were inappropriate for partial hospitalization, and then re-certified the patients’ appropriateness for the program in an effort to continue to bill Medicare for services. 

To support the fraudulent Medicare billing, it was alleged that Dr. Imran and others allegedly falsified patient treatment records to reflect services on dates when no such services were provided. Dr. Imran pleaded guilty on May 13, 2014, to conspiracy to commit health care fraud. There were allegations that the patients were brought in by buses from Memphis and other areas which is indicative of illegal marketing.

This was a wide-ranging prosecution that began with an investigation in 2011 into the three community mental health centers. This investigation has resulted in 17 convictions of individuals employed by the facilities, including therapists, marketers, administrators, owners and the medical director.  The companies billed Medicare for partial hospitalization program services for the mentally ill that were allegedly unnecessary or never provided over a period of approximately seven years. The companies, collectively, submitted more than $258 million in claims to Medicare during this period. Medicare paid approximately $43.5 million on those claims.

Attorney Commentary: The days where facilities could avoid fraud charges by seeing patients are over. Prosecutors are no longer afraid to tackle medical necessity. This is especially true in psychiatric cases where the people served are mentally ill, poor and not receptive to treatment. Add marketing and patients who travel for services and there are significant red flags for audits and investigations.

Posted by Tracy Green, Esq.
Email: tgreen@greenassoc.com
Phone: 213-233-2260
Green and Associates, Attorneys at Law

Did Your Office Receive OIG Or Grand Jury Subpoena For Records? Case Example Of Why You Should Not Destroy Records Unless You Want Obstruction Of Justice Charge.

I receive many calls from businesses and individuals where the government - federal, state, or administrative boards - or insurance companies are requesting records.  Some records are requested for an audit.  Other records are requested by a subpoena or grand jury subpoena. 

One of the keys in responding is not to panic. Obtain sage advice and proceed intelligently so you do not make matters worse. Even if there are some issues with the records, it may be a damage control case and you may not be objective or thinking clearly when receiving this request for records. 

One of the first things I tell clients is NOT to destroy records. Why? Destroying records does a number of things. First, it helps show intent to defraud. Second, it also provides a basis for an obstruction of justice charge. So even if the government decides not to charge health care fraud, it can charge obstruction of justice. Third, it also means you will not be able to use those records in your defense at any time and you do not know where the investigation is going at an early stage.  

A recent case shows what can happen when records are destroyed. On June 11, 2014, a New Jersey chiropractor, Mary Jean Negri, DC, RN, admitted destroying patient appointment records sought by federal agents investigating potential billing fraud at her medical office. Dr. Degri DC pleaded guilty in federal court to an information charging her with one count of obstructing an investigation of a health care offense. Dr. Negri DC had been practicing for 24 years and now this will cause her to lose her license and have a federal criminal conviction. 

According to documents filed in this case and her own statements made in court, Dr. Degri DC discovered in May 2012 that the FBI and the U.S. Attorney’s Office were investigating her chiropractic corporation for potentially fraudulent billing practices. Dr. Negri DC  suspected that investigators were interested in obtaining the clinic's patient appointment books as evidence of potential fraud. In an effort to obstruct the government’s investigation, she discarded those patient appointment books.

Dr. Negri DC's sentencing is scheduled for September 29, 2014. The maximum sentence on this charge is 5 years, a $250,000 fine, or twice the gain or loss caused by the offense. It is doubtful that she will receive the maximum but the sentence will depend on the judge and the facts and circumstances.  There will be significant collateral consequences to Dr. Negri DC as well such as being excluded as a Medicare provider by OIG and discipline to her license including revocation.  

Do not let your office respond to subpoenas or request for records in a manner that exposes you to greater problems. Seek advice and handle these requests in a professional manner. Even if you need to assert the 5th Amendment or are concerned about billing exposure, remember that not every case investigated is charged but it makes the government's job easier to prove fraudulent intent if there are records destroyed or "lost" in a flood or disaster.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Phone: 213-233-2260

Email: tgreen@greensasoc.com