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.

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.

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

Connecticut Office Manager Pleads Guilty to Health Care Fraud Charges for Billing for Psychotherapy Services Using Social Worker's Provider Number Who Did Not Provide Services

Mental health audits and prosecutions are on the rise in “behavioral health” which includes a wide variety of health care providers who provide care on an outpatient basis. These providers include psychiatrists, psychologists, licensed clinical social workers, licensed marriage and family therapists, licensed professional counselors, and licensed alcohol and drug counselors.  

Managers are often charged in health care fraud cases and a recent case relates to a manager's alleged participation in fraud and abuse in outpatient behavioral health. On December 14, 2016, office manager Maurice Sharpe of Connecticut waived his right to indictment and pleaded guilty before U.S. District Judge Bolden to one count of health care fraud. The facts relate to billing for psychotherapy services provided by unlicensed individuals, using another provider's Medicaid number or billing for services not provided. 

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

New Jersey OB/GYN Settles Civil Allegations on Pelvic Floor Therapy Claims, Pays $5.25 Million and Agrees to 20-Year OIG Exclusion

On November 15, 2016, a New Jersey OB/GYN, Labib Riachi, agreed to be excluded from participation in Federal health care programs, including Medicare and Medicaid, for 20 years to settle allegations by the U.S. Department of Health and Human Services, Office of Inspector General (OIG), that Dr. Riachi submitted thousands of claims for Pelvic Floor Therapy (PFT) to Medicare and Medicaid for services that were either never provided or were otherwise false or fraudulent. 

Dr. Riachi's exclusion follows a Qui Tam or False Claims Act (FCA) settlement agreement with the U.S. Attorney's Office for the District of New Jersey for false billing. On February 12, 2016, Dr. Riachi agreed to resolve his FCA liability for $5.25 million. In resolving this matter through settlement, Dr. Riachi has denied any liability.

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

Drug Medi-Cal Fraud Case Set for Trial in May 2016 For Alleged Submission of False Claims for Alcohol and Drug Treatment and Counseling for Students

Trial is set for May 10, 2016 in federal court in Los Angeles regarding the operation of a Caliornia Drug Medi-Cal provider Atlantic Health Services, formerly known as Atlantic Recovery Services (ARS) in which eight individuals were indicted and charged with health care fraud and aggravated identity theft.

The Drug Medi-Cal programs in the schools was a unique program and there may be very good defenses to this case given the County contracts, the approval of billing and submissions in the past, the State agency that regulated these programs and upon which the programs relied, and the aggressive tactics that Medi-Cal used when it decided to cut these programs.  

The overall allegation was that ARS submitted more than $50 million in fraudulent bills to a California state program for alcohol and drug treatment services for high school and middle school students that, in many instances, were not provided or were provided to students who did not have substance abuse problems. 

The eight defendants are all former employees of ARS, which received contracts to provide substance abuse treatment services through the Drug Medi-Cal program to students in schools in Los Angeles County. 

The schools included various sites operated by Soledad Enrichment Action and public schools in Montebello, California, Bell Gardens, Californina, Lakewood, and the Antelope Valley. ARS submitted claims for payment to the Drug Medi-Cal program for at least ten years and ARS shut down in April 2013, when California suspended payments to the company.

Four Home Healthcare Workers in Missouri Charged with Defrauding Medicaid - In Home Supportive Services Fraud

State programs pay home health care workers (IHSS in California) to take care of the non-medical needs of elderly and/or disabled patients who qualify for SSI. These services are performed at the patients' own homes since it is much less expensive than placing these patients in assisted living or nursing homes. 

This can be a great program. However, the concern about fraud threatens it. In addition, the individual providers are being targeted. These are not large companies but individuals who are often low paid workers. This article is to remind those providers to be careful and not to submit documents with false billing or entries on them regardless of the temptation. In California, it is considered Medi-Cal fraud.

Let's be clear. States are aggressively going after fraudulent billing in the home setting. California usually brings charges in state court but we can expect federal charges as well. Missouri just charged four individuals in federal court for billing for services not provided in November 2015, and they are expected to be sentenced in early 2016 following guilty pleas.

In Home Personal Care Worker Agency and Owners Agree to Civil Resolution of Federal False Claims Case in Wisconsin - Why Health Care Providers Need Compliance Plans

There has been an increased number of lawsuits filed under the qui tam – or whistleblower – provisions of the False Claims Act, which allows private citizens with knowledge of health care fraud on the state or federal government to bring a civil action on their behalf. These cases can also involve claims submitted to state Medicaid programs (Medi-Cal in California) since they are in part federally funded. 

I discuss below how to develop compliance programs so a health care provider can show that there are no "false claims" and reduce the risk of having a lawsuit filed against them. False claims are not claims that were negligent or mistakes. Instead, false claims only cover claims that were submitted with deliberate knowledge of the falsity of the claim or deliberate ignorance of the falsity of the claim. Compliance programs - even modest ones - help prevent a whistleblower from claiming that there was deliberate knowledge or ignorance. 

A recent case that was settled involved claims submitted for personal care worker services to the Wisconsin Medicaid Program. In California, this is known as the IHHS (In Home Supportive Services). The private citizen whistleblower alleged that Atlas Healthcare, Inc., and its owners, Deana Bajanen and Sheena Jones knowingly submitted false claims for personal care worker services to the Wisconsin Medicaid Program for patients that did not need the services or did not need the level of services for which Atlas billed the Medicaid program. Atlas is located in Wisconsin. 

78 Year Old Physician Assistant Sentenced to Three Years In Prison For Medicare Fraud - Older Physicians and PAs Are Often Solicited by Suspect Health Care Businesses That Engage in Billing Fraud and Abuse

A 78 year old Los Angeles physician’s assistant was sentenced on November 24, 2018 to three years in federal prison for defrauding Medicare by signing fraudulent prescriptions and other medical documents for durable medical equipment (DME) while working at two separate medical clinics in the Los Angeles area. This was after a guilty plea and not a trial.

Erasmus Kotey, 78, of Montebello, was sentenced by United States District Judge Margaret M. Morrow. In addition to the 36-month prison term, Judge Morrow ordered Kotey to pay approximately $3.5 million in restitution to the Medicare program. Kotey pleaded guilty in March to one count of health care fraud and one count of conspiracy to commit health care fraud in two separate cases. In a plea agreement filed earlier this year in United States District Court, Kotey admitted that he engaged in a scheme to commit health care fraud while working as a physician’s assistant at a clinic  located at 866 North Vermont Avenue in Los Angeles. (A co-conspirator in this scheme was Susanna Artsruni, a North Hollywood woman who owned a medical supply company and admitted that she got unnecessary prescriptions from physician assistants at three clinics was sentenced to over 6 years in prison for causing Medicare to pay $9.6 million for the $25 million in fraudulent claims submitted.) 

In addition to his role in the scheme at the clinic on North Vermont, Kotey admitted that he engaged in a conspiracy to commit health care fraud through his work as a physician’s assistant at another clinic at 943 South Atlantic Boulevard in Monterey Park.

At both clinics, Kotey admitted that he signed prescriptions and other medical documents for medically unnecessary power wheelchairs and other DME. Using these fraudulent prescriptions, DME supply companies submitted fraudulent claims to Medicare.

Kotey also admitted that he ordered medically unnecessary diagnostic testing at the North Vermont clinic. In the two cases combined, the government alleged that Kotey’s fraudulent prescriptions resulted in approximately $7 million in false and fraudulent claims to Medicare. Medicare paid approximately $3.5 million on those claims.

Attorney Commentary: Esasmus Kotey is 78 years old and our office often sees physicians and physician assistants who are older get caught up in Medicare or other fraud cases. There are a couple of reasons for this. One is that often the older physicians or providers are vulnerable in that they are having financial problems and are looking for a position and the only places that will hire senior citizens are health care businesses that are engaged in suspect activities or want to be able to take advantage of an older person's trusting nature. Sometimes these physicians retired and due to the economy or bad business investments need to work. 

In the past. these physicians were viewed as "victims" by the government but now they are being prosecuted alongside the individuals who created and profited from the fraud scheme. The older physicians and providers usually do not make much money from these schemes. If you or someone you know is an older provider be sure to perform due diligence on any clinic or health care business before working there especially when there is billing to government or insurance programs. 


Posted by Tracy Green, Esq. 

How Do You Appeal A Medi-Cal Temporary Suspension?

The Department of Health Care Services (DHCS) has the authority under the Welfare and Institutions Code to impose administrative sanctions on Medi-Cal providers. Some of the most common sanctions are withhold and temporary suspension.

The primary basis for "Temporary Suspension" is Welfare and Institutions Code, Section 14043.36 which provides as follows:

“If it is discovered that a provider is under investigation by the Department or any state, local, or federal government law enforcement agency for fraud and abuse, that provider shall be subject to temporary suspension from the Medi-Cal program, which shall include temporary deactivation of all provider numbers used by the provider to obtain reimbursement from the Medi-Cal program.”

The Medi-Cal application has providers agree to temporary suspension if they are under investigation for fraud or abuse; fail to disclose all information in their application or provide false information; or fail to remediate discrepancies found after an unannounced visit; submit claims for payment for any provider who is excluded on on the Ineligible list; or “when necessary to protect the interests of the Medi-Cal program.”

How can I appeal from a Medi-Cal temporary suspension? You do not have the rights to a full appeal with a hearing and the right to bring witnesses. Instead, you only have the right to what is known as an “administrative” or paper appeal under Welfare and Institutions Code, Section 14043.65. 

For this reason, the most important thing to do from the beginning is to begin the meet and confer process with DHCS to seek to resolve the issues. The appeal can be filed at the same time. We have had many cases where we were able to satisfy DHCS that there was no viable fraud or violation of program rules or where we reached agreements that allowed the provider to maintain their Medi-Cal provider number under certain written settlement agreements.

Before these meetings, it is critical to meet with an attorney and evaluate the evidence and to determine whether there is any exposure for fraud. If there are concerns, it may be important not to have meetings where the provider’s Fifth Amendment rights are waived since anything that is said at a meeting in Sacramento is evidence.

While the meet and confer process is ongoing, the appeal is filed and it must be supported by substantial evidence under oath in order to have any chance of winning this “paper” appeal. A judge does not rule on the appeal. It is a “hearing officer” from DHCS and there is no hearing or opportunity to cross-examine witnesses. Thus, any appeal submissions must be thorough.

Seeking input from DHCS in Sacramento is critical since “temporary” can last as long as 3 years while the Department claims that an investigation is ongoing. The meet and confer process with an in-person meeting in Sacramento is very helpful in helping prove to the Department the issues in the claimed “fraud” are non-existent (we have seen cases where the evidence was flawed and the statements were false) or that the errors were minimal and not grounds for a true temporary suspension.

One of the recurring issues is that often DCHS will refer the case to the State Attorney General’s Office – Bureau of Medi-Cal Fraud – and it is often required that the case be closed by their office in order to reinstate the provider number and lift the temporary suspension. 

Every one of these cases is different and it is critical to evaluate them at the earliest time possible. Usually these cases commence when there are on-site inspections and it may be necessary to obtain an attorney’s input at that time to ensure that all is handled professionally and that a referral for fraud and abuse will not be made. Often, providers do not take the on-site inspections as seriously as they should and do not sufficiently address the auditor or investigator’s concerns at the earliest level. If you need assistance with your audit, on-site inspection or temporary suspension, feel free to contact our office for a complimenary 15 minute consultation.  

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Phone: 213-233-2260

Email: tgreen@greenassoc.com

Tracy Green Quoted In Lengthy Investigative Article About Medi-Cal Drug Rehab

Tracy Green was quoted in an investigative article about Medi-Cal Drug Rehab programs and allegations of fraud and abuse. The article is entitled "Amid Fraud Allegations, Rehab Doctors OK Treatment Without Seeing Patients" and is by the Center for Investigative Reporting with contributions by CNN who also did a 3-part series called "Rehab Racket." This is one in a series about Medi-Cal programs for drug and alcohol counseling treatment. Tracy Green was interviewed about one of her clients a physician who had plead to a misdemeanor count for signing blank treatment forms after being charged with felony counts.

The article focuses on the "medical directors" and the fact that the doctors did not physically examine the patients without understanding that these drug and treatment clinics are not owned by the doctors or health care professionals and that there is no requirement that the patients must be seen by a physician. In fact, the Medi-Cal program does not pay for a physical examination. The reimbursement rates are so low that it would be financially impossible to have a physician see each patient. The program cannot have it both ways -- want physical exams but not pay enough to cover it -- and this reimbursement structure has helped create this problem. The medical directors were not responsible for these clinics and were paid fairly low monthly fees ($1,000 a month). To cast the blame on these physicians is missing the real problems by the owners and managers of these clinics.

Since this series of articles have been published, the Department of Health Care Services has taken action and suspended 73 clinics including 101 additional counseling sites. Not surprisingly, all of the clinics referenced in the article have had their Medi-Cal provider numbers temporarily suspended based on accusations of fraud and abuse.

The Department of Health Care Services has also referred 64 of the clinics to the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse for criminal investigation.  This referral will be used to justify the temporary suspensions of the provider numbers. Those clinics will have to address the administrative law issues as well as the criminal investigation.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
800 West Sixth Street, Suite 450
Los Angeles, California  90017
213-233-2260
tgreen@greenassoc.com

Owner of Rehabilitation Facility (CORF) Pleads Guilty To Mail Fraud For Submitting False Claims To Medicare

On June 21, 2013, an owner and chief executive officer of a comprehensive outpatient rehabilitation facility (CORF) pleaded guilty to mail fraud for submitting claims to Medicare for services that were not prescribed by treating doctors. This case had been pending for over two years since the Indictment was filed in March 2011.

This case involves Medicare billings by Fountain Valley Healthcare Center (FVHC), a CORF that Tuan Duc Tran owned and operated since 2001. Mr. Tran admitted that he submitted bills to Medicare based on false claims that Medicare beneficiaries had been referred to FVHC by a physician for physical and respiratory therapy. Mr. Tran admitted that the names of the referring physicians were falsely identified. In order for medical necessity to exist, the patients must be referred by a treating physician and these claims for payment violated Medicare rules because the treating doctors had not referred the beneficiaries for rehabilitation.

Under the plea agreement, Mr. Tran will be required to pay $777,291 in restitution to Medicare. Even though the services were provided, the entire amount collected is to be treated as a loss amount and required to be repaid as restitution. 

U.S. District Judge Josephine Staton Tucker scheduled Mr. Tran’s sentencing for November 8. The mail fraud count carries a maximum statutory sentence of 20 years in federal prison. However, under the plea agreement, Mr. Tran will be at an offense level 16 in the federal sentencing guidelines with a guideline sentencing range of 21 to 27 months although the parties can argue for a sentence outside the guideline range and Judge Tucker is not bound by the parties' agreement in the signed plea agreement.

Attorney Commentary: These health care fraud cases are often difficult for those charged to understand where the services have been provided and were even of benefit to the patients. In this case, part of the government's offer of proof was that Mr. Tran had agreed to be familiar with the Medicare rules and regulations and to comply with them. In his case, the fact that the physician names listed on the superbills were not the patients' referring physicians was one of the facts that shifted this case from a billing error case to a fraud case.

Posted by Tracy Green, an attorney specializing in representing and defending health care professionals in health care fraud, Medicare fraud and Medi-Cal fraud allegations, audits, investigations and charges. Email: tgreen@greenassoc.com  Office: 213-233-2260

Website: Green and Associates, Attorneys at Law 

California Department of Health Care Services (DHCS) Issues Temporary Suspensions Against 16 Alcohol And Drug Treatment Centers - More Suspensions To Come

On July 18, 2013, the California Department of Health Care Services (DHCS) announced temporary suspensions against 16 alcohol and drug treatment centers that are suspected of operating in violation of state and federal Drug Medi-Cal (DMC) laws. The disciplinary measures resulted from preliminary investigations of alcohol and drug treatment programs by DHCS’ Audits and Investigations Division. The investigations included reviews and onsite visits last week of 22 treatment centers.

It is believed that a total of 66 companies have been audited and that additional treatment centers have been suspended since July 18 based on reports by the Los Angeles Times. According to the Times, 29 companies that operate a total of 83 clinics have been temporarily suspended.

As DMC-certified clinics, they are reimbursed by the state for substance use disorder services provided to eligible Medi-Cal members. As a result of the investigations, the 16 centers received temporary suspensions of their Medi-Cal provider numbers, preventing them from submitting claims for reimbursement of services until investigations are complete.

"Temporary" suspensions can take over one year while the criminal investigation is pending. Temporary suspensions can result in the facility closing given that most of these programs are fully reliant on Medi-Cal payments. All 16 cases have been referred to the California Department of Justice for further investigation, which may lead to permanent sanctions (such as termination of provider number) or the filing of a criminal action.  However, the temporary suspension can be lifted early if the treatment centers can show that there is not reliable evidence of fraud or abuse. This action is the first phase of DHCS’ ongoing review of DMC, which came fully under its purview earlier this month.

 Allegations received by DHCS regarding DMC include claims that providers have hired individuals who are on the federal list of excluded providers. These individuals have been convicted of a felony or misdemeanor involving fraud or abuse in any government program, or they have been convicted of neglect or abuse of a patient while providing a health care item or service. Some centers are suspected of violating state and federal laws by providing services that are not deemed medically necessary and of fraudulently billing DMC for services that were not rendered. DHCS is working with counties, which contract directly with these clinics to provide services, to resolve any discrepancies between the actions of the centers and their billing of Medi-Cal.

On July 1, 2013, all substance use disorder programs from the Department of Alcohol and Drug Programs completed their transfer to DHCS. This allows for better coordination of the licensing, certification and program management of substance use disorder services to the benefit of individuals with substance use disorders.

Attorney Commentary Having represented Medi-Cal providers, including alcohol and drug treatment centers, who received temporary suspensions, it is critical to act quickly in assessing the merit of the allegations.  There are opportunities to seek a settlement conference and resolution with the Department especially where the allegations are weak or with little merit.

Posted by Tracy Green, Attorney
Green and Associates

Los Angeles Chiropractor Charged With Medicare Fraud, Aggravated Identity Theft And Forfeiture Allegations

Medicare fraud cases involving chiropractors are not very common. The reason for this is that Medicare severely limits coverage for chiropractic services to manual manipulation of the spine to correct a condition known as “subluxation.” The diagnosis of subluxation must be diagnosed and documented either by X-ray or a physical examination that is detailed and documented before Medicare will reimburse. Medicare does not pay for maintenance therapy or for chiropractic treatments that are for maintenance or to promote health.

In Los Angeles, a chiropractor, Danny Paveh (also known as Houshang Pavehzadeh) of the Sylmar Physician Medical Group, was charged in May 2013 with federal health care fraud (18 USC 1347), aggravated identity theft (18 USC 1028(A)(1), and forfeiture allegations. Dr. Paveh is presumed innocent and the fact that an Indictment has been filed is not evidence. This case is pending in the U.S. District Court for the Central District before Judge Manuel L. Real. Mr. Paveh was released on $100,000 bond and a trial date is not yet set.

The allegations in this case are that from 2005 to 2012 – a very long billing period – Chiropractor Paveh billed Medicare more than $1.7 million for chiropractic treatments for subluxation that were never properly performed.  The government alleges that the patients only received massages and other non-reimbursable treatments from Dr. Paveh and massage therapists who worked at his group. Essentially, the government alleges that these were “false claims” submitted to Medicare. It is also alleged that Dr. Paveh committed “aggravated identity theft” by taking the patients information and billing Medicare.

Attorney Commentary Regarding This Chiropractor Medicare Fraud Case

First, it appears that Dr. Paveh may have come to the government’s attention via an audit to be performed by OIG. According to the government, Dr. Paveh was the second-largest Medicare biller in California for chiropractic services – even though he was the only chiropractor in his group. The government also alleged that he was not in the United States when some of the  services were performed.

Second, although clients can panic when faced with an audit, the government alleges that when OIG investigators tried to conduct an audit of Pavehzadeh’s claims, he falsely reported to the Los Angeles Police Department that he had been carjacked and that patient files requested by the auditors had been stolen from his car. This could be used as a sentencing enhancement and to show false statements to government officials in conducting an audit.

Third, I often see clients who assume because they have billed certain procedures for years that it means that Medicare must not have an issue with the billing or documentation. Unfortunately, Medicare is known as “good faith” billing and it reserves the right to go back and audit and seek an overpayment in an administrative context or to seek criminal charges as was done here. Thus, years of billing does not guarantee that the government will not take action. Health care has changed over the years and Medicare has become much more aggressive in health care fraud cases.

Fourth, this case was being investigated for some years. This means that there was significant time to meet with the federal prosecutors and see if the case could be settled pre-indictment. In some cases, we are able to have the prosecutors offer a “reverse proffer” so the client and Medicare fraud attorney can see what evidence the government has so the case can be realistically assessed. 

Finally, forfeiture allegations were filed in this case which can often tie up a defendant's assets and make it more difficult to defend oneself or to support oneself pending a trial. In evaluating anyone's potential exposure, it should be assumed that forfeiture allegations will be filed in any federal health care fraud case. 

In cases like this, obtaining representation long before Indictment – and ideally at the audit stage – make the most sense so the case does not grow and if there are adverse facts, they can be handled at the earliest stage. If there is exculpatory evidence and facts that show innocence and good faith billing, then those facts can be presented as well.

Posted by Tracy Green, Esq.

Ms. Green is a very experienced health care fraud attorney who has handled hundreds of audits and investigations for Medicare, Medi-Cal and private insurance. In addition, she has defended health care professionals and companies in Medicare fraud, Medi-Cal fraud, mail fraud arising from false billing claims, aggravated identity theft and health care forfeiture claims. Feel free to contact her at 213-233-2260 or via email at tgreen@greenassoc.com to discuss your unique situation.

How Can I Learn How To Bill Medi-Cal Properly And Get My Billing Staff Trained?

For Medi-Cal providers, one of the most important things is for your biller, billing staff and office manager to understand the program, the rules and the upcoming changes. 

If you are a Medi-Cal provider, even one that only does occasional billing to the program, it is important to have your staff and biller as well. As a provider, you will be held responsible for what they do in billing.  So, what can you do that is cost effective?

First, even if your biller (third party or in-house) tells you what experts they are - remember that the rules and the way they apply them change constantly.  Anyone who says they know it all is to be regarded with caution. Change is the name of the game in healthcare billing.

Second, have your staff and even you sign up for the Medi-Cal Learning Portal. Anyone can sign up (even students or lawyers like me) and have access to recorded webinars, eLearning tutorials, quick links to provider manuals, information on upcoming seminars, contact information for regional representatives, and so on. You can even ask for a custom workshop through Medi-Cal. 

Third, have your billing staff attend Medi-Cal training seminars. For example, next month, on April 16 and 17, 2013, the Department of Health Care Services (DHCS) and Xerox State Healthcare, LLC [the DHCS fiscal intermediary] will conduct Medi-Cal training seminars.  This is also available for sign-up on the Medi-Cal Learning Portal linked above. On April 16, the training will for Allied Health, Long Term Care and CCS/GHPP providers only.  On April 17, the training will be for Medical, Inpatient/Outpatient, HAP, and  CCS/GHPP providers.

In order to be compliant and not have audits or accusations of fraudulent billing, keep records of the training and be vigilant about having your staff and outside billers staying on top of these issues. All too often, people are relying on old rules and the way things used to be and are not staying on top of or ahead of the issues.


  

Insurance Fraud & Kickback Case: Capper Accused of Paying People in Sober Living Houses For Insurance Information Pleaded Guilty In Los Angeles to Insurance Fraud

A recent case shows the interplay between the buying of insurance information from low income or government insured people (Medi-Cal and Medicare cards) and using that information to obtain prescriptions for opiate drugs. This case illustrates how this type of insurance fraud turns into selling prescription opiate drugs on the black market or street.


On February 24, 2012, George Randolph, 63, of Los Angeles, pleaded guilty to one count of felony insurance fraud. Mr. Randolph was arrested in November 2011 and was accused of being a “capper” or marketer. It was alleged that he recruited people from sober living houses – offering participants $50 for their insurance information for the purpose of seeking fraudulent prescriptions of opiate pills.  Mr. Randolph entered into a plea agreement in lieu of trial. 

It was alleged that Mr. Randolph recruited people from substance abuse sober living halfway houses by offering them $50 for their Medi-Cal and Medicare insurance information. With this information, he obtained fraudulent prescriptions for oxymorfone narcotic opiate pills with a street value of $60 per pill. Mr. Randolph was in possession of the illegal pills and a counterfeit prescription when he was arrested on November 16, 2011. 

Los Angeles Superior Court Judge David Horwitz immediately sentenced the defendant to four years in state prison. This was the term agreed upon in the plea agreement. It was a high sentence because Mr. Randolph had two prior felony robbery counts. The case was investigated by the California Department of Health Services. The prosecution was by the Healthcare Fraud Division of the District Attorney's Office.

Attorney Comments: A case like this can lead to other criminal cases. For example, how did Mr. Randolph use the Medi-Cal card and insurance information to obtain a prescription from a physician? How did Mr. Randolph decide what pharmacy to use? Often physicians and pharmacies can get caught up in these cases and they both need to be aware of the fraud in the community and to have safeguards and controls to eliminate the risk of fraud in their practices. Moreover, if there are government requests for interviews or documents, it is critical that there be representation by counsel in order to determine whether you or someone in your office are considered a potential target of the investigation.  

Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation. Any questions or comments  should be directed to Tracy Green, a very experienced insurance fraud attorney and kickback attorney. 

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 in criminal matters in California and throughout the country. Their website is: http://www.greenassoc.com

Tracy Green Interviewed On NPR Station On "Use Of Unappoved Birth Control Devices Common In U.S." National Issues With Physicians Using IUDs Manufactured In Other Countries.

Tracy Green was interviewed by radio station WRNI (Rhode Island's NPR Station) in a program entitled "Use Of Unappoved Birth Control Devices Common In U.S."

This is a program on OB-GYNs using IUDs from Canada. In the U.S. only IUDs from two companies are "FDA approved" even if the IUD is the same as ones purchased from other countries.

In the article and program, Green was quoted as follows:

"They just thought, wow, this is a great deal," said lawyer Tracy Green. " Don't be a knucklehead and over pay."   Green practices in Los Angeles, and she represented five doctors who did the same thing three years ago in California. She says the practice was pretty widespread.

"One of my doctors, it was another OBGYN who called him and said, Boy, my office, we found a great price.' And you know, they're all board certified OB-GYNs," Green said. "They just thought this was a great deal."

Green says the IUDs appeared to be identical to the ones the doctors usually prescribed. They even had the same packaging. The lawyer representing the Rhode Island doctors who bought the UN-approved IUDs declined to speak on tape for this story, but he's argued the same thing: There was nothing different about these devices; they were just cheaper because they came from Canada.

Attorney Commentary:  I have represented numerous physicians on this particular issue in California over the past three years.  The issue for physicians who bill Medicare or Medicaid (Medi-Cal) for non-FDA approved devices is that they cannot bill the programs and will be liable for repaying any claims submitted.  Whether a case proceeds to criminal prosecution will depend on whether there was criminal intent and if the physician knew it was a non-FDA approved device. It has been my experience that often the physicians are not buying the supplies, the non-FDA supplies were sold by pharmacies or other supply companies, and that just because the price was lower does not trigger a suspicion that it is non-FDA approved.

Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.  

Any questions or comments  should be directed to Tracy Green, a very experienced California FDA attorney, Medical Board attorney, Medi-Cal fraud attorney and physician attorney at tgreen@greenassoc.com.

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 in health care fraud related matters in California and throughout the country. Their website is: http://www.greenassoc.com/

Two Los Angeles Physicians, Alleged Clinic Owner And Four Clinic Workers Arrested For Performing Unnecessary Tests And Illegal Referral Fees

On October 30, 2010, seven people (including two physicians) were arrested and charged with seven counts relating to the operation of a medical clinic in North Hollywood. The criminal counts charged were: conspiracy, making fraudulent claims for healthcare benefits, making illegal referrals, and receiving illegal kickbacks.

This case is being prosecuted by the Los Angeles City Attorney's Office which makes it unusual since this office only has the jurisdiction to prosecute misdemeanors. However, the complaint seeks restitution to Medi-Cal and Medicare of $5 million. It is therefore clear that all prosecuting agencies are putting health care fraud as a priority.

The persons charged were: (1) two physicians, Dr. Eleanor Santiago Arthur and Dr. Rodney Stephen Barron, who were held on $500,000 bail; (2) the alleged owner of the clinic Artur Vic Manasarian who has also been charged in a federal health care fraud case; and (3) four individuals who worked at or on behalf of the clinic. All individuals are presumed innocent and a criminal complaint is not evidence or proof of guilt.

The allegations in the criminal complaint were that "cappers" recruited Medicare and Medi-Cal enrollees (including mentally ill homeless people) by paying them $100 each and drove them to and from the clinic. The government deemed it suspicious that some patients were recruited from Long Beach to go to the North Hollywood clinic. The clinic then allegedly performed unnecessary tests (such as abdominal ultrasounds) and other procedures at the North Hollywood clinic. This is the basis for the allegation that fraudulent bills were submitted to government insurance programs for seniors, the poor and the disabled.

One allegation was that in some instances, the patients' blood was drained into unsanitary, open containers and the clinic submitted the blood for tests under multiple patients' names so they could bill multiple times.  After the visits, the cappers drove the patients back to where they picked them up. The City Attorney alleges that the clinic billed the government for up to $1,000 worth of medical care per patient, and each physician saw 30 to 50 patients a day. 

Attorney Commentary:  These cases are not usually prosecuted by the City Attorney's Office since a misdemeanor count has a maximum of a one year sentence. However, the City Attorney's Office contends that if any of the charged individuals are convicted of all seven counts, the counts would be consecutive and they could face up to seven years in prison. This is one way for the City Attorney's Office to make misdemeanor counts serious for those charged with healthcare fraud and illegal kickbacks.

The City Attorney alleges that "owner" of the clinic is a non-physician indicating that there is the issue of the corporate practice of medicine in this case and it would not be surprising if there were allegations that the clinic was in control of the billing in this case. However, since only physicians can bill and receive payment from Medicare and Medi-Cal in California, the billing would have been in the names of the physicians and the City Attorney's Office will seek to hold them responsible even if they did not receive all the money received from Medicare and Medi-Cal. 

Thus, the days where these physicians were treated as "victims" appears to be over and physicians who work at clinics where there is illegal marketing, kickbacks and unnecessary tests cannot stick their heads in the sand and act like an "employee" when the billing and ordering of tests is under their name. Physicians must be very careful where they work and it is our experience that physicians who are young, elderly or have problems (such as medical, psychological, alcohol/substance abuse, or legal) are targeted to work at these illegal clinics. Even if a physician has trouble getting employment or making a living, working at any clinic which does not follow the law will cause more problems for the physician in the long run. We often advise physicians to do due diligence and make sure that their license and UPIN number will not be jeopardized. The short term benefits are not worth it.

Any questions or comments  should be directed to Tracy Green, a very experienced California health care fraud and Medicare fraud attorney at tgreen@greenassoc.com.

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 in health care fraud related matters in California and throughout the country. Their website is: http://www.greenassoc.com/