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.  

Former California Physician Sentenced to 2 Years in Federal Prison for Defrauding Medicare by Prescribing Unnecessary Home Health Services for Kickbacks and Illegally Prescribing Opioid Drugs

Physicians who order home health where it is not medically necessary can be charged with Medicare fraud. If that same physician orders medications, especially controlled substances, without seeing the patient on a regular basis, that can be another ground for a fraud charge. 

The loss amounts can be huge since the physician will be held responsible for the total amount of billings by the home health agency and the pharmacy's prescriptions. A recent case illustrates a physician who ordered home health in exchange for payments and then also prescribed some pain medications that were medically unnecessary.  

On January 6, 2020, Kain Kumar, a former doctor, was sentenced to 24 months in federal prison after having pleaded guilty in April 2019 to one count of health care fraud and one count of distribution of hydrocodone. Mr. Kumar practiced internal medicine, maintained medical offices in Palmdale, Rosamond, and Ridgecrest, California and surrendered his medical license last year.

He was sentenced by U.S. District Judge Philip S. Gutierrez. Mr. Kumar was also ordered to pay financial penalties totaling more than $1 million, consisting of $509,365 in restitution, $494,900 in asset forfeiture, and a $72,000 fine.

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

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

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

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

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

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

Sutter Health LLC, a Medicare Advantage Provider, Pays $30 Million To Settle Alleged Overpayment Based on Beneficiaries' Health Status Risk Scores

It is not just fee-for-service providers that have audits and civil qui tam cases. Managed healthcare is facing review as well. Even providers who are paid capitation fees should be mindful of the codes submitted to managed care. A recent case illustrates why. 

On April 12, 2019, Sutter Health LLC, a California-based healthcare services provider, and affiliated entities (Sutter East Bay Medical Foundation, Sutter Pacific Medical Foundation, Sutter Gould Medical Foundation, and Sutter Medical Foundation) agreed to pay $30 million to resolve allegations that these affiliated entities submitted inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans known as "risk scores," which allegedly resulted in the plans and providers being overpaid. Sutter Health is headquartered in Sacramento, California.  

   

Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed healthcare insurance plans called Medicare Advantage Plans (“MA Plans”) that are owned and operated by private Medicare Advantage Organizations (“MAOs”).  MA Plans are paid a capitated, or per-person, amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. 

Michigan Home Health Agency Assistant Director of Nursing Sentenced to Three Years for Role in Paying Kickbacks With $1.6 Million in Billings to Medicare

The assistant director of nursing of a Michigan home health agency, Juan Yrorita, age 63, was sentenced to 36 months in prison on March 29, 2018 by U.S. District Judge Drain for his role in a case involving approximately $1.6 million in Medicare claims for home health services that were procured through the payment of kickbacks, and that were also allegedly medically unnecessary and not provided.

Mr. Yrorita plead guilty after four days of trial to one count of conspiracy to commit health care fraud and wire fraud. As part of his guilty plea, Mr. Yrorita admitted that his co-conspirators at Anointed Care Services (Anointed), a Detroit-area home health agency, paid kickbacks to recruit Medicare beneficiaries.  Mr. Yrorita further admitted that as Anointed’s assistant director of nursing, he falsified medical records to support Anointed’s fraudulent claims to Medicare for services that were medically unnecessary and never provided. According to the evidence at trial, Anointed submitted approximately $1.6 million in false and fraudulent claims to Medicare. 

Two Northern California Urologists Agree To Pay More Than $1 Million To Settle Civil False Claims Act Allegations Related To Image Guided Radiation Therapy (IGRT) Referrals for Medicare Patients

On January 23, 2018, Drs. Aytac Apaydin and Stephen Worsham, urologists based in Northern California, agreed to a civil compromise with no admission of liability in which they will pay $1.085 million to resolve allegations that they submitted and caused the submission of false claims to Medicare for image guided radiation therapy (IGRT). 

IGRT is used to treat patients who are diagnosed with cancer, including prostate cancer patients. The government alleged that these IGRT claims were referred and billed in violation of the physician self-referral law (commonly known as the “Stark Law”) and the Anti-Kickback Statute.

The factual background according to the Department of Justice is that Drs. Apaydin and Worsham own and operate Salinas Valley Urology Associates (SVUA) in Salinas, California. They also owned Advance Radiation Oncology Center (AROC), located in Salinas, California, which dissolved in 2016.  

Owner of Holter Labs, Cardiac Monitoring Services Company, Convicted for Health Care Fraud for Billing for Services Not Performed

On May 2, 2017, Michael Mirando, an owner of Holter Labs, which provided cardiac monitoring services, was found guilty after a week long federal trial of 15 counts of health care fraud for submitting bills to insurance companies for tests and services that were never performed from 2009 to 2016. 

This case was before Judge Percy Anderson and sentencing is scheduled for August 21, 2017.  After the jury verdict, Mr. Mirando signed a stipulation indicating that his home had been bought with proceeds from the business and thus there will likely be a forfeiture component to this case which can be used for restitution.  

Holter Labs was a company that provided physicians with equipment for cardio monitoring and let the physician bill the patients' insurance for the professional components (hookup and interpretation) and the company billed for the technical component. The government presented evidence that Holter Labs submitted bills for services never ordered (such as 30-day tests) and for services the devices could not perform (such as brain scans and oxygen studies). The government alleged that $7 million in billing was for services never performed and $1 million was for duplicate date of services and that Holter Labs collected at least $2.5 million on these false claims.

These type of companies have been under scrutiny even without alleged false billing. Companies offer physicians a revenue stream where they send the equipment for free to the physicians' offices, have the data downloaded for the physicians who get to bill for the professional component. Since holter monitoring is not a designated health service the Stark rules do not apply but it should be determined whether providing the software and printing reports could be consideration for the referral of the technical patient billing. Any arrangement with the companies should be reviewed for compliance.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Email: tgreen@greenassoc.com

Work: 213-233-2260

     

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

Billing for Prescriptions Not Dispensed to Patients Results in 4 Year Sentence for Los Angeles Medical Clinic Manager After Federal Trial

Federal prosecutors used to devote healthcare fraud resources to mainly government programs and allow private insurance carriers to handle the cases with special investigation units or with state prosecutions. A recent case shows how private insurance healthcare fraud is being pursued forcefully. This is in large part due to the overlap between private and public and the fact that the federal government pays subsidies for tens of millions of people who have private insurance.

The recent case was one of ghost billing. On March 28, 2017, Michael Huynh, the office manager and purported part-owner of a Los Angeles area medical clinic in Reseda was sentenced to 51 months in federal prison for his role in billing private insurance plans for prescription medication that was never dispensed to insured patients and failing to report such income on his federal income tax returns. Following a seven-day trial in September 2016, Mr. Huynh was found guilty of one count of conspiracy to commit healthcare fraud and 11 counts of filing false tax returns.

Mr. Huynh, age 67, was sentenced by United States District Judge Otis D. Wright II. In addition to the prison term, Judge Wright ordered Mr. Huynh to pay just over $1.9 million in restitution to the victim insurance companies and back taxes – estimated to be nearly $950,000 – to the Internal Revenue Service.

      

The evidence introduced at trial showed that between January 2004 and November 2009 Mr. Huynh and a pharmacist (Farhad N. Dany Sharim,  a co-owner of Century Discount Pharmacy in Reseda) participated in a healthcare fraud scheme that billed private insurance plans for prescription medication that was never dispensed to insured patients. Mr. Sharim, age 57, previously pleaded guilty to conspiracy to commit healthcare fraud and will be sentenced by Judge Wright on May 1.

The evidence at trial was that Mr. Huyhn provided Mr. Sharim with fabricated prescriptions purportedly for patients of the medial clinic who were insured by healthcare benefit programs. Mr. Sharim's pharmacy then submitted false and fraudulent bills for prescription drugs that had not been dispensed to the patients and received substantial payments from various health care benefit programs to which it was not entitled. Mr. Sharim allegedly paid Mr. Huyhn and/or the medical clinic more than $1.1 million.

In addition to the healthcare fraud scheme, Mr. Huynh was charged with filing false federal tax returns for tax years 2007 through 2011 that underreported the medical clinic’s gross receipts and sales by more than $1.6 million.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Office: 213-233-2260

Email: tgreen@greenassoc.com

Cardiologist Pleads Guilty to Federal Health Care Fraud Charges From 2010 and 2011 for Submitting False Claims and Records

On February 17, 2017, Roy G. Heilbron, a cardiologist practicing in Santa Fe, New Mexico, pleaded guilty in federal court in Albuquerque to a health care fraud charge, Count 4 from his 2015 Indictment. 

Dr. Heilbron's 24-count indictment originally charged him with health care fraud and wire fraud charges for allegedly defrauding Medicare and other health care benefit programs between January 2010 and May 2011 by submitting false and fraudulent claims in the following manner:

1.  Performing and billing for a wide array of unnecessary tests on every new patient and submitting false diagnoses with the billing claims to justify the tests to the insurance plans;

2.  Inserting false symptoms, observations, and diagnoses into patients’ medical charts to provide written support for the tests he ordered or performed;

3.  Inserting photocopied clinical notes, diagnostic test results, and ultrasound images in patients’ medical charts to create a written record of procedures that were either not performed or that had not been sufficiently documented to support the billing;

4.  Submitting the photocopied notes, results, and images to the insurance plans when the plans requested documentation to support the claims submitted;

5.  Submitting claims to health plans for procedures that were never performed;

6.  Submitting claims for procedures performed on two consecutive dates to increase the amount paid for services that were actually rendered together on one single date; and

7.  Misusing billing codes and modifiers in order to increase his rate of reimbursement.

Durable Medical Equipment Supply Owner and Operator Plead Guilty in Case Involving False Statements to Medicare About Inhalation Drugs Being Non-Compounded Drugs

Compounded medications and drugs have been under close scrutiny the past number of years. Claiming a drug is not compounded when it is compounded can be a "false claim" subjecting a business and its owners or managers subject to criminal prosecution and civil penalties. 

A recent case involving a durable medical equipment company and compounded inhalation drugs billed to Medicare shows what can happen where the drugs are not characterized properly on claims forms in order to avoid new billing rules.  

The rule being avoided was that as of July 1, 2007, Centers for Medicare/Medicaid Services revised nationwide policy regarding compounded inhalation solutions. After July 1, 2007, all compounded inhalation solutions were denied as not medically necessary for dates of service on or after July 1, 2007. 

Korean-American Owner of California Management Company for Physical Therapy and Occupational Therapy Clinics Sentenced to 121 Months

A recent health care fraud case shows what happens when business people get in a highly regulated business and do not follow the rules or have any compliance program. It also shows what happens when business people decide to enter a healthcare business and cater to an ethnic community which wants services others than those paid for by Medicare.

In this case, it involves the Korean American community in Los Angeles and Orange Counties which is hardworking and entreprenurial but where some do not necessarily understand the full consequences when regulations are not followed. Those consequences? Audits, fines, civil lawsuits and, in this case, criminal cases with lengthy prison sentences.

On January 10, 2017, a California man Simon Hong (also known as Seong Wook Hong) who ran management companies which allegedly operated rehabilitation clinics in Walnut, Torrance and Los Angeles was sentenced to 121 months in federal prison by United States District Judge David O. Carter. At the conclusion of the sentencing hearing, Judge Carter ordered Mr. Hong remanded into custody.

This is not just a straight forward fraud case. One of the issues is providers giving patients in an ethnic community services other than physical therapy but billing and documenting for physical therapy. In addition, it is a businessman operating clinics and then getting a percentge of income for referring the business. There were traditional health care fraud issues present but it shows what happens when business people decide to operate or manage a clinic.  

Mr. Hong owned or operated physical therapy clinics operated by companies called Hong’s Medical Management, Inc., CMH Practice Solution, and HK Practice and Solution, Inc. As part of his business, Mr. Hong recruited Medicare providers and beneficiaries and provided uncovered services like massage and acupuncture for the beneficiaries. Even though many of the beneficiaries did not receive actual physical therapy, those who worked with Mr. Hong billed Medicare for physical therapy, and then paid a large percentage (allegedly 56 percent) of the reimbursement funds back to Mr. Hong's management companies.

Houston Psychiatrist Sentenced to Long Sentence (144 Months) in Prison for Role in False Claims for Mental Health Treatment and Partial Hospitalization Program

When physicians refer or admit patients to a hospital or outpatient program, if there is deemed to be a lack of medical necessity or fraud, the physician can be held liable on conspiracy theory for the full amount of the billings and face a sentence far greater than ever imagined. When there is marketing to the patients that compounds the issues.

A recent case shows how a psychiatrist, Sharon Iglehart, M.D. a former attending psychiatrist at Riverside General Hospital (Riverside) of Houston, received a lengthy sentence (144 months) even though she is a first time offender after going to trial. 

It also shows how sentences vary case by case and judge by judge. Further, the sentences one defendant receives in a multi-defendant case is strongly affected by co-defendants' sentences.

After a 7-day trial in September 2015, Dr. Iglehart was convicted by the jury of one count of conspiracy to commit health care fraud, one count of health care fraud and three counts of making false statements relating to health care matters. 

In April 2016, Dr. Iglehart was sentenced by U.S. District Judge Ewing Werlein Jr. of the Southern District of Texas to a very heavy 144 months in prison for her role in the case. Judge Werlein also ordered Dr. Iglehart to pay $6,363,528.82 in restitution and to forfeit the same amount. The government alleged that there was a total of $158 million in Medicare billings related to her conduct. 

Unlicensed Michigan Physician Who Saw Patients at Home Under Other Doctors' Names for 8 Years Pleads Guilty to Conspiracy to Commit Wire Fraud for Role in Billing Medicare Over $6 Million

Home visits must follow the same rules as billing at a physician's office. In addition, in certain clinics we have seen an increase in offices using foreign doctors not licensed in the U.S. to help with the workload and where services gradually creep into the unlicensed practice of medicine.

A recent case shows what happens when unlicensed personnel bill for services under another physician's name. On December 9, 2016, Renald Dasine, an unlicensed Michigan physician, pleaded guilty to one count of conspiracy to commit wire fraud before U.S. District Judge John Corbett O’Meara of the Eastern District of Michigan.  Sentencing has been scheduled for March 8, 2017. 

As part of his guilty plea, Mr. Dasine admitted that in connection with his employment at a Detroit in-home physician services company known as B and M Visiting Doctors PLC, he submitted fraudulent claims to Medicare from 2005 to 2013. Mr. Dasine admitted he saw patients and falsified related patient records, including medical documents, prescriptions for controlled substances and billing documents, all under the name of a licensed medical doctor. 

Three other unlicensed individuals, Cecil Alexander Kent, Charles McRae and Alvin Williams, previously pleaded guilty for their involvement in the B and M Visiting Doctors PLC billing for services provided by unlicensed individuals. They were indicted back in 2013 which shows how long these cases take to resolve. B and M allegedly billed Medicare approximately $6.3 million during this 8 year time period. 

Attorney Commentary: Ancillary personnel can be very useful in making a medical practice run smoothly and profitably. The key is to ensure that where licensed personnel are required to do their services that the unlicensed personnel do not perform those services or do anything that will be billed to insurance or federal or state health care plans.

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

New Jersey Woman Pleads Guilty to Role In Medicare Fraud by Clinical Laboratory Billing for Genetic DNA Testing on Seniors Where Healthcare Providers Were Paid for Authorizations

Fraud prosecutions in clinical laboratories are on the rise. Marketing is usually at the heart of these cases. A recent case involving DNA testing shows marketing issues on the patient side and on the referring or authorizing physician side as well as issues of medical necessity. 

One of the reasons that paying outside marketers commissions creates issues is that the health care provider often does not know how the marketer finds the patients or accounts. This case shows how creative outside marketers can be in finding patients and health care providers to earn commissions. 

On December 1, 2016, Sheila Kahl of New Jersey pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging her with one count of conspiring to commit health care fraud and one count of conspiring to wrongfully access individually identifiable health information and pay illegal remunerations to health care professionals. Sentencing for Ms. Kahl is scheduled for March 14, 2017.

Ms. Kahl's actions involved an entity known as The Good Samaritans of America which the government alleged was not a true not-for-profit and was a marketing company front to get elderly patients to submit to genetic testing so it could get commission payments from clinical laboratories. 

According to documents filed in the case and statements made in court, from July 2014 through December 2015, Seth Rehfuss, Ms. Kahl, and others used The Good Samaritans of America to gain access to low-income senior housing complexes. Mr. Rehfuss and others claimed that The Good Samaritans of America was a “trusted non-profit” that assisted senior citizens in navigating federal benefit programs. The government alleged that The Good Samaritans of America was a front to present information about genetic testing and they used advertisements for free ice cream to ensure attendance at the presentations.