California Physician Charged in Self-Referral Case With Felony Insurance Fraud and Perjury for Allegedly Referring Workers Comp Patients to a Laboratory and Surgery Center In Which He Allegedly Had Ownership Interest

Referring patients to other business entities that a physician has an ownership interest in can be a violation of the law depending on the type of patient (Medicare, workers' compensation) and it is important to ensure that the rules are being followed. California workers' compensation rules can be as more complex as those governing Medicare patients.

A recent case shows what can happen if the government contends that self-referral rules under the California Labor Code are violated for workers' compensation patients. There may be very good defenses here where the surgery center was part of the same practice and there was an in-office laboratory that is CLIA certified. 

A Corona physician (anesthesiologist who specializes in pain management), Dr. Sanjoy Banerjee, is charged with felony workers’ compensation insurance fraud (two counts Ins. Code Section 550(a)(1)) and perjury (five counts Penal Code 118(a)) by the Riverside County District Attorney’s Office after investigators claimed he referred patients to a clinical laboratory and surgical center he allegedly owned or had some ownership interest. Dr. Banerjee is presumed innocent.

Dr. Banerjee works as a pain management doctor who saw workers’ compensation patients  (probably among other types of patients) at a medical clinic he owned called Pacific Pain Care. The prosecution contends that Dr. Banerjee signed under penalty of perjury five workers' compensation doctor’s reports stating that he had not referred workers’ compensation patients to companies he owned. I doubt that is what the doctor's reports stated but it was probably just a form statement that there was no violation of Labor Code Section 139.3.

Investigators alleged that Dr. Banerjee had referred some of his patients to a "different business" he owned, Rochester Imperial Surgical Center, also located in the Pacific Pain Care office suite.  The prosecution alleges that Dr. Banerjee billed for more than $180,000 worth of urine toxicology testing and epidural injections through the laboratory and surgical center. One of the key issues will be whether this was a "different" business if it was owned by the same physician in the same office suite and met the exceptions of the in-office ancillary exception. If it met the exception, there is NO criminal case.

Ohio Cardiologist Convicted at Trial and Sentenced to 20 Years in Federal Prison for Overbilling Medicare and Private Insurance & Allegedly Performing Unnecessary Procedures

Prosecutors are more aggressive in pursing physicians for criminal charges where just a few years ago the charges would be civil cases or administrative requests for overpayment. A high profile case out of Ohio went to trial for about three years, ended up with a jury convicting an Ohio cardiologist on 15 counts, and now a long sentence has been handed out.

Dr. Harold Persaud, 56, a cardiologist, was sentenced to 20 years in prison on December 18, 2015, for allegedly performing unnecessary catheterizations, tests, stent insertions and causing unnecessary coronary artery bypass surgeries from 2006 to 2012. The government's case was that this was part of his fraudulent billing to Medicare and other insurers.

One of the issues that arises in almost every criminal case against physicians is the issue of whether records have been falsified or whether there has been some false billing. This case was no different. Even a small percentage of false billing or fabricated records can serve to taint the case when viewed by the jury. Thirteen of the counts against the doctor were for making false statements. He was acquitted of one count of making a false statement. There was a monetary structuring charge as well of which he was convicted and this was probably brought in so that the government could argue the motive was financial or "greed."

When physicians in large practices review the allegations, one can see why compliance plans that include review of charts and billing can help prevent criminal cases. This can be more problematic with the electronic medical recordkeeping (EMR) templates that can make the charts look very similar due to the use of templates.

The government prosecutors claimed that Dr. Persaud, who was no longer practicing by the time of trial, allegedly did the following:

1. Dr. Persaud allegedly selected the billing code for each patient submitted to Medicare and private insurers and used codes that reflected a service that was more costly than that which was actually performed (known as "upcoding");

President Of Ambulance Company Pleads Guilty To Perjury In Connection With Responding to Civil Investigative Demand for Documents in Health Care Claims Investigation

Health care fraud cases are more frequently being prosecuted as perjury cases. Fabricating documents or signing responses to subpoenas or requests for documents has been easier to prove than the alleged fraud. 

I have urged clients for years not to alter or add to records for this exact reason. In addition, changing the records can be used to show proof of fraudulent intent. When records are incomplete or missing, there are ways to address the issues.

In a recent case, the president of a nonemergency ambulance transportation company pleaded guilty to Perjury in North Carolina for producing records under oath that the records she produced were responsive to a Civil Investigative Demand (CID). In fact, some of the records were fabricated.

On November 5, 2015, Jamime Leonard Smith, the president of CCMT, Inc., doing business as Crystal Coast Medical CCMT, Inc., doing business as Crystal Coast Medical Transport (CCMT) pleaded guilty to a felony count in federal court.  CCMT was a nonemergency ambulance transportation company.

In 2012, CCMT and its president Smith became the subject of investigation after a member of the public videotaped CCMT employees routinely transporting patients in CCMT ambulances when the patients had the ability to walk or ride in wheelchairs.  

Medicare and TRICARE generally do not cover nonemergency ambulance transportation services when the patient has the ability to walk or ride in a wheelchair.  Additionally, for reimbursement to be covered by Medicare and TRICARE, the ambulance company must obtain an order, known as a Physician’s Certification Statement (PCS), from the patient’s physician indicating that the ambulance trip is medically required.