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

California Podiatrist Sentenced to 3 Years for Federal Health Care Fraud for Upcoding, Providing Services Not Medically Necessary or Performed By Unlicensed Staff, and Altering Records

On April 15, 2016, a podiatrist Dr. Neil Van Dyck of Roseville, California was sentenced by United States District Judge Garland E. Burrell Jr. to three years in prison and a $10,000 fine for committing healthcare fraud. This sentence came after a guilty plea on October 23, 2015.  

According to the plea agreement and court documents, Dr. Van Dyck was a California-licensed podiatrist who operated a podiatry practice in Roseville called Placer Podiatry. The issue in Dr. Van Dyck's case was whether the “spa”-like or routine foot care treatments were properly billed to Medicare, Medi-Cal, Tricare and other private insurers.  

The government and insurers alleged that Dr. Van Dyck falsely claimed that he performed more expensive procedures than he actually performed, or that the routine foot care that was provided was justified because of illness or symptoms that were not present. it was alleged that often the treatments were performed by unlicensed staff, sometimes when Dr. Van Dyck was not present at his practice. Additionally,  it was alleged that Dr. Van Dyck altered a single-use skincare patch by cutting it into pieces and billed Medicare for multiple applications. 

As typical in these cases, responses to audits are used to show scienter or criminal intent. The government alleged that in 2011, in response to a request for documents from an investigator for Medicare, Dr. Van Dyck altered patients’ medical records to justify his bills. Medicare, Medi-Cal, Tricare, and the private insurers paid Van Dyck over $1 million for his claims.  

There was a forfeiture component to this case.  Judge Burrell previously entered an order requiring Dr. Van Dyck to forfeit $1.2 million from a retirement account into which proceeds of the healthcare billing were traced. The date for a further restitution hearing is set for May 27, 2016.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted by Tracy Green, Esq.

Green and Associates

Email: tgreen@greenassoc.com

Office: 213-233-2260

Los Angeles Podiatrist Sentenced To Twenty-Four Months For His Role In Identity Theft And Bank Fraud To Obtain Money For His Medical Practice

Professionals, like anyone else, can make huge judgment and professional errors -- especially when it comes to making their practice financially viable during difficult times.  One recent case shows how one medical professional, a podiatrist, was charged criminally due to desparate measures.

On June 24, 2013, podiatrist Dr. Bill Releford, who founded the Releford Foot and Ankle Institute, was sentenced to 24 months in federal prison for his conviction on federal fraud charges related to a bank fraud scheme that used stolen identities to cause two financial institutions to suffer $3 million in losses. Dr. Releford specifically admitted in his plea agreement that he participated in the scheme to obtain money for his medical practice, which had offices in Beverly Hills and Inglewood.

Dr. Releford and five other co-defendants operated a scheme to defraud financial institutions by using stolen identities to establish business lines of credit which were fraudulently drawn down to provide money that was used for their personal expenses. After obtaining stolen personal identifying information – including dates of birth, Social Security numbers, credit profiles and driver’s license numbers from victims with high credit scores, including another physician from Pasadena – members of the conspiracy submitted fraudulent applications for business lines of credit to various banks. Once the applications were approved, the defendants liquidated the credit lines.

Over the course of the scheme, Dr. Releford helped the other defendants open at least two credit lines that provided funds for Dr. Releford’s medical practice. Dr. Releford also attempted to open a third credit line valued at up to $500,000, which he planned to use to fund a clothing business. Dr. Releford further participated in the scheme by helping to launder thousands of dollars from other fraudulently obtained credit lines. Dr. Releford had a minor role and two of his co-defendants went to trial, and their sentences were significantly longer (one received 88 months). 

In addition to the prison term, Judge Hatter ordered Releford to pay $218,237 in restitution and a $10,000 fine. At the sentencing hearing, Judge Hatter noted Dr. Releford’s attempts to rehabilitate himself – such as Releford’s offer to immediately pay $1,500 in restitution and his recent participation in charitable projects – and said this effort spared Releford from a longer prison sentence. It is therefore notable that post-offense rehabilitation is important at sentencing and even if defendants cannot pay the entire amount of restitution, efforts to make payments can be recognized at sentencing.  

Posted by Tracy Green

Green and Associates, Attorneys at Law  

San Diego Podiatrist Sentenced In Health Care Fraud Case And Charged In Civil False Claims Act Case

On August 28, 2009, Dr. Clifford J. Wolf, DPM was sentenced in federal court in San Diego by the Honorable William Q. Hayes to serve five months in custody and five months home detention and pay a $5,000 fine based on Wolf’s conviction for one count of health care fraud in violation of 18 U.S.C. Section 1347. Dr. Wolf pled guilty on May 28, 2009. This is Case No. 08-CR-1542-WQH .

Dr. Wolf is a podiatrist with a primary office in Poway, California, who treated patients throughout San Diego County and was an approved Medicare provider. According to court documents, since at least 1999, Wolf engaged in a scheme to defraud Medicare by billing multiple times for surgical procedures called “incision and drainage” services that he did not perform for his patients, when instead he merely trimmed and filed the beneficiaries’ toenails. Dr. Wolf allegedly fabricated progress notes in the patients’ charts in an effort to have the records and diagnoses correspond to the services billed so that he could get paid.

As part of his guilty plea, Dr. Wolf pled guilty to count one of the fourteen-count indictment and admitted that he knowingly and willfully defrauded Medicare of approximately $66,347 from January 1, 2003 through December 31, 2006. Dr. Wolf paid that amount in restitution to the Medicare program prior to the sentencing.

On the same day as the sentencing, the United States filed a civil lawsuit today in U.S. District Court in San Diego against Dr. Wolf and his business, Wolf Podiatry Corporation, alleging violations of the False Claims Act. The False Claims Act provides that anyone who submits a false claim is liable for three times the monetary amount the government has been damaged and for penalties of $5,500 to $11,000 for each false claim submitted to the government. The government’s civil lawsuit against Wolf and Wolf Podiatry Corporation is Case Number 09cv1875JLS RBB.

Attorney Comments: This case is notable since the government is getting more aggressive about having a parallel civil case so they can recover treble penalties even where restitution has already been repaid. Further, the civil case was not filed until the doctor was sentenced.

Podiatric services have been heavily investigated by Medicare and Medi-Cal these past two years and we can expect to see more administrative overpayment cases in addition to the occasional criminal case. The fabrication of records here probably helped move this case to the criminal arena instead of leaving it as an administrative matter since the false records make criminal intent easier to prove.

We cannot stress enough the danger of altering records during audits or when records are requested by any company or government agency. Before you even think of altering or adding records -- seek the advice of experienced health care law counsel. There are ways to supplement your records and documenting the care rendered even if your patient records are inadequate to support the services billed. It may not be enough to obtain full payment or avoid overpayment - but fabricating records has negative consequences with the licensing boards and criminal exposure that make it unnecessarily risky.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their 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 including, but limited to, podiatrists. Their website is: http://www.greenassoc.com/