Connecticut Hospital Paid Fines for Stark Law Violations for Renting Space to Medical Practice at Less Than Fair Market Value

On April 24, 2018, after it self-disclosed conduct to OIG, Hartford Hospital in Connecticut, agreed to pay $423,017.45 for allegedly violating the Civil Monetary Penalties Law provisions applicable to physician self-referrals and kickbacks. 

The OIG alleged that Hartford Hospital provided remuneration to a medical practice in the form of office space, where Hartford Hospital charged the practice rent at less than fair market value. The remuneration created a financial relationship between Hartford Hospital and the practice that caused Hartford Hospital to present claims for health services that resulted from prohibited referrals in violation of the Stark law.

Rental arrangements where there are patient referrals need to be reviewed for compliance with Stark and Anti-Kickback statutes. This case is an example of the high fines that can result. Luckily, the self-disclosure likely prevented more severe sanctions such as exclusion or criminal referral. 

Posted by Tracy Green

Green and Associates

When Can Patients Be Offered Free or Local Discounted Local Transportation Without Violating the Anti-Kickback Statute? OIG Releases New Rules and Safe Harbor Guidelines for Free and Discounted Transportation to Established Patients.

One persistent and tricky regulatory issue in healthcare is when can patients be offered free or discounted local transportation without it being deemed a violation of the Anti-Kickback Statute (AKS)? 

In other words, when is offering transportation part of promoting access to care and not a prohibited inducement or a recruiting tool?  

Good news: the healthcare industry have new guidance from the Office of the Inspector General (OIG). However, these sets of rules will be effective on January 6, 2017 and if your transportation program does not meet the criteria, your business will be out of compliance.

The OIG's final rule 42 CFR 1001.952 adds certain “low risk” safe harbors under the AKS including protection for free or discounted local transportation services that meet specified criteria. Transportation is the focus in this blog post.

How and When Can You Give Free or Discounted Local Transportation Services to Patents Without Violating the AKS?

The regulations contain a new safe harbor that protects free or discounted local transportation provided by physician, physical therapists, hospitals. surgery centers, laboratories and many other providers.  It does not apply to any person or entity whose primary business is to supply health care items (such as pharmaceutical companies or durable medical companies).  There are clearly patients who would benefit from free or discounted transportion, such as those who cannot drive or take public transportation, mentally ill patients or isolated/homebound patients.

What are the basic rules a physician, hospital, surgery center or other provider needs to follow in order to fall within this new safe harbor when it gives free or discounted transportation to patients? These are the starting guidelines that need to be evaluated on a case-by-case basis:

1.  There should be a company policy that sets forth the availability of the free or discounted transportation. It is to be applied uniformly and consistently. It is not determined in a manner related to past or anticipated volume or value of federal health care program business.

2.  The transportation should be offered to all established patients, not just Medicare patients for example, that meet the established criteria in the policy.

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.

Napa Gastroenterologist Agrees To Pay $400,000 To Settle Allegations That He Upcoded Patient Visits and Unbundled Conoloscopy Charges To The Medicare Program

On or about April 1, 2016 Dr. Ali S. Vaziri, a gastroenterologist in private practice in Napa, California, agreed (without admitting any liability) to pay the United States $400,000 to settle allegations that he submitted false claims for reimbursement to the Medicare program in violation of the False Claims Act.

The U.S. Department of Health and Human Services and Office of Inspector General ("government") alleged that from 2007 to 2011, Dr. Vaziri allegedly billed Medicare for patient office visits that reflected more time and services than he actually spent with patients.  In addition, the governmet alleged that Dr. Vaziri allegedly billed Medicare for patient office visits that were required to be billed together with routine colonoscopies as one charge. Dr. Vaziri did not admit liability but entered into a settlement agreement in order to resolve the matter.

Settlements in these cases often make sense where the legal fees in challenging or litigating a false claims act case could easily exceed the amount of the settlement.  It also helps guarantee that no criminal charges for Medicare fraud will be filed.  In addition, for providers who see a significant amount of Medicare patients, it may be important to resolve administrative disputes with Medicare and to demonstrate an effective compliance plan is in place.

Posted by Tracy Green, Esq.

Check Out OIG’s Newly Updated List of Corporate Integrity Agreements to Understand Recent Compliance Issues

In keeping up on the latest compliance issues, reporting issues, and the government's view on health care law issues, one of a health care lawyer's regular tasks is to review the latest compliance agreements reached by Office of Inspector General (OIG) for Health and Human Services. 

OIG negotiates corporate integrity agreements (CIA) with health care providers and other entities as part of the settlement of Federal health care program investigations arising under a variety of civil false claims statutes. Providers or entities agree to the obligations, and in exchange, OIG agrees not to seek their exclusion from participation in Medicare, Medicaid, or other Federal health care programs. This is also usually part of an agreement not to pursue or file criminal charges.

We also have clients review them in order for them to understand the government's view on various business practices in health care. If your business is interested, here is the OIG's posted list of corporate integrity agreements.  They are in PDF and can be downloaded and reviewed. 

CIAs have many common elements, but each one addresses the specific facts at issue and often attempts to accommodate and recognize many of the elements of preexisting voluntary compliance programs.

A comprehensive CIA typically lasts 5 years and includes requirements to:

 1. hire a compliance officer/appoint a compliance committee;

 2. develop written standards and policies; 

 3.  implement a comprehensive employee training program; 

 4.  retain an independent review organization to conduct annual reviews; 

 5.  establish a confidential disclosure program; 

 6.  restrict employment of ineligible persons; 

 7.  report overpayments, reportable events, and ongoing investigations/legal proceedings;      and 

 8.  provide an implementation report and annual reports to OIG on the status of the entity's compliance activities.

Keep compliant and make sure that your health care entity does not end up on this list.

Posted by Tracy Green, Esq. 

OIG Exclusion and Reinstatement of Excluded Individuals and Entities

One of the collateral consequences of criminal convictions for health care professionals is exclusion by the Office of Inspector General (OIG). The OIG exclusion list should be reviewed to confirm that the individual or entity is on it.

We have also seen individuals who were excluded and did not know it due to issues such as being in default of student loans.

One issue to understand is that reinstatement of excluded entities and individuals is not automatic once the specified period of exclusion ends. Those wishing to again participate in the Medicare, Medicaid (Medi-Cal) and all Federal health care programs must apply for reinstatement and receive authorized notice from OIG that reinstatement has been granted.

We have handed numerous reinstatement requests. OIG runs a background and one of the key issues is whether the individual or entity has been following the exclusion rules. We advise people to calendar 90 days before reinstatement period ends since the process can be started at that time. 

Riverside Woman Convicted in Federal Court of Stealing Identities of Residents of Medical Facility in Long Beach. Reason Facilities Need Strong HIPAA and Privacy Procedures.

One of the reasons medical facilities should have strong HIPAA policies and procedures, as well as enforcement and training, is to prevent employees or third parties from taking medical information for other improper or illegal purposes.

Last week, Bridgette Jackson of Riverside, California was convicted in federal court after a jury trial on federal identity theft charges for possessing the identities of more than 50 patients of a residential medical facility in Long Beach formerly known as the Hillcrest Care Center. She was convicted of conspiring to possess more than 15 identities, possessing more than 15 identities, and aggravated identity theft.

Ms. Jackson’s aunt, who testified against her at the trial, was an employee at the Hillcrest Care Center and had access to all of the patient files. According to the testimony at trial, Ms. Jackson approached her aunt and asked for personal identifying information of patients. Ms. Jackson’s aunt copied or wrote down personal identifying information and provided it to Ms. Jackson on three separate occasions. 

Ms. Jackson then used that information to help others file false tax returns in the names of the patients and keep the refunds for themselves. When law enforcement executed a search warrant on Ms. Jackson’s residence, officers seized approximately 56 Hillcrest medical records, along with almost 70 other identity profiles, which included names, social security numbers, and dates of birth of individuals other than Ms. Jackson. Law enforcement also seized over 50 prepaid debit cards in names of people other than Jackson.

After the jury verdict was reached, United States District Judge Manuel L. Real scheduled a sentencing hearing for March 7. At that time, Jackson will face a mandatory minimum sentence of two years in federal prison and a statutory maximum sentence of 17 years.   In an unrelated case, Ms. Jackson pled guilty last year to conspiring to commit credit card fraud in the United States District Court in Riverside and faces up to five years when she is sentenced in that case on March 28.

Attorney Commentary:  The black market for patient identity exists. Low paid clerical or medical workers can be susceptible to third parties (here a family member) seeking information. In addition, health care facilities' computer systems are now being targeted. Having a HIPAA audit and compliance is key so the facility does not face civil liability by the patients or OIG fines for the HIPAA violations.

Posted by Tracy Green, Esq.
Work: 213-233-2260

Attorney Sentenced For Theft of Government Property For Receiving Deceased Grandmother’s Social Security Benefits For Over 10 Years - Case Study On What NOT To Do When OIG Or Investigators Contact A Suspect

The Office of Inspector General (OIG) is increasing their investigations against those who are suspected of improperly taking Social Security benefits.  We have seen OIG request interviews of family members where the parents are out of the country and receiving Supplemental Social Security (SSI) and other government benefits. If someone is charged with theft of Social Security, SSI or Medicare benefits, they will be charged under 18 USC Section 641 (theft of government property).

If the OIG is investigating, it means that there is suspicion of criminal conduct. In a recent federal criminal case, the OIG started investigating and the person receiving the benefits lied to the OIG investigator. This is a case example of what not to do when contacted by the OIG and when an investigation is pending.

The facts are as follows. On May 24, 2000, the grandmother of Audrey Owens, an attorney and retired deputy public defender for Riverside County, passed away. Her Social Security benefits had been deposited into a bank account that had her and her father’s name on the account. Ms. Owens took her dad’s name off the account and changed the bank account address to her home. For the next 12 years, the benefits went into this bank account and Ms. Owens spent the funds. Ms. Owens did not think about the fact that her grandmother would have been over 100 years’ old in 2012.

In August 2012, as part of a “centenarian project” OIG began investigating Ms. Owens’ grandmother. The OIG was investigating all persons aged 100 years or more who are receiving Social Security or SSI benefits to make sure they are still alive. OIG could not locate Ms. Owens’ grandmother and therefore suspended benefits. Later this fact was used to show that Ms. Owens would not have ended the fraud on her own.  

On August 30, 2012, OIG agents went to Ms. Owens’ home and spoke to a man and asked him where the grandmother was. This man said the grandmother was in Kansas City. On September 24, 2012, Ms. Owens agreed to speak to OIG agents without an attorney. Ms. Owens told some mistruths to the OIG agents – which is not uncommon for people interviewed without an attorney when they panick. Ms. Owens stated that the man the OIG met was a homeless man she took in from a church when in fact he was her husband. Ms. Owens also stated that she thought the funds that went into the account were from her father’s VA benefits. Another untruth.

It took the U.S. Attorney’s Office a year before filing a criminal complaint against Ms. Owens. The total loss was just over $120,000 for benefits received as well as Medicare premiums paid on the grandmother’s behalf. 

During this year, it would have been very helpful for Ms. Owens if she had started repayment of these funds on her own before she was charged. Unfortunately, it appears that nothing was done until just before sentencing. Once Ms. Owens was charged, she plead open to the Court. By this time, she had retired from the  public defenders’s office.

At sentencing, Pretrial Services recommended 6 months. The government sought a sentence of 12 to 18 months. On June 2, 2014, Judge Phillips sentenced Ms. Owens to 1 year and 1 day (the extra day is a sentencing benefit to Ms. Owens for various reasons).

Ms. Owens sought to have her sentence lower by addressing the fact that she suffered from alcoholism during this time period. It is difficult to determine how persuasive this was given that she was employed full-time during this time period.

One thing that was done correctly here was repayment of restitution before sentencing. Ms. Owens wisely repaid all the funds to SSA except for $1,747 and this may have been a factor in the court not sentencing Ms. Owens to 18 months. If this had been a state court case rather than federal, there probably would not have been a state prison sentence for a first time offense where restitution was almost entirely repaid, however the federal system is much harsher on sentencing results for these type of cases -- especially when a professional is involved.

There is no question that lying to a government agent such as OIG makes matters much worse. It is better to refuse to be interviewed if the person cannot say anything without incriminating themselves. This is when someone should obtain an attorney for advice so they do not make such a terrible mistake that compounds problems. This can often lead to obstruction of justice charges or enhancements.

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