Durable Medical Equipment Company Pays $600,000 to Settle False Claims Act Allegations for Using Unlicensed Technicians for Respiratory Therapy

On January 12, 2015,  J and L Medical Services, LLC in Connecticut entered into a civil settlement agreement with the federal and state governments in which it will pay $600,000 to resolve allegations that it violated the federal and state False Claims Acts.         

J&L Medical is a durable medical equipment company.  As part of its business, it provides Continuous Positive Airway Pressure (CPAP) and Bilevel Positive Airway Pressure (BiPAP) devices and accessories to Medicare and Medicaid beneficiaries who have been diagnosed with obstructive sleep apnea.

It is alleged that J&L regularly utilized the services of unlicensed technicians to provide respiratory therapy services to Medicare and Medicaid beneficiaries, including setting up CPAP and BiPAP machines, fitting the patients with the masks used with those machines, and educating the patients about the use of the machines.

Under Connecticut law, the practice of respiratory therapy is a licensed activity.  It is alleged that the respiratory therapy services in question could only be legally performed by licensed respiratory therapists. Unlicensed practice issues are arising more frequently in audits, qui tam cases and criminal prosecutions.

Respiratory Therapist Arrested For Practicing Medicine Without A License For Botox Injections And Representing Himself As Naturopathic Doctor

On June 20, 2013, a licensed respiratory therapist, Santiago Alvarez was arrested as part of an undercover investigation by the Medical Board of California’s Operation Safe Medicine Task Force. The case has been filed in the Riverside County Superior Court by the District Attorney’s Office. Mr. Alvarez has been charged with practicing medicine without a license, along with grand theft by false pretenses. Mr. Alvarez is presumed to be innocent.

It is alleged that Mr. Alvarez owned and operated LogiHealth and Rejuvenix Medical, LLC, both located in Moreno Valley, California. A licensed Respiratory Care Practitioner, he allegedly represented himself as a Naturopathic doctor “Board Certified in Anti-Aging Medicine.” As part of the undercover operation, he allegedly provided Botox injections at both locations, which by law are required to be administered by a licensed physician, or a physician’s assistant, advanced nurse practitioner or registered nurse under direct supervision of a licensed physician. It was further alleged that Mr. Alvarez used the DEA number and forged the signature of another licensed physician to obtain prescriptions.

This case shows that complaints are increasingly being referred for undercover operations. We have seen an increase in undercover agents being sent into clinics being investigated to see if the rules against the unlicensed practice of medicine are being violated.

Posted by Tracy Green, Esq.
Contact: tgreen@greenassoc.com
Green and Associates, Attorneys at Law

L.A. Times Article On Illinois Physician Program For Sexual Misconduct Treatment Comes Under Attack. What Do We Do In California For Licensees With Substance Abuse And Sexual Boundary Issues?

In California, if there is a complaint made about a physician that alleges any type of "sexual misconduct," the California Medical Board handles those cases with a presumption that the physician is guilty until proven innocent. The incendiary nature of such an allegation makes it difficult for the Board to refuse to file unproven allegations and often physicians are forced into disciplinary hearings since the Board is reluctant to dismiss weak charges on its own.

The Los Angeles Times ran an article on December 29, 2010 entitled "Doctor misconduct cases monitored in secrecy" regarding a program in Illinois. The article writes about criticisms of the Illinois Professionals Health Program which operates a diversion program for physicians involving alcohol and drug abuse and now sexual misconduct allegations. The article quotes certain opinions that such programs shield physicians and that patients should know about these allegations.

California Does Not Have A Diversion Program
In California, physicians have not been eligible for diversion in lieu of discipline where there are substance abuse allegations since 2008. California does not have any program for the diversion or monitoring of physicians with sexual misconduct allegations where there is also no discipline filed against the physician.

Physicians Can Enroll In Treatment Programs Confidentially Before Disciplinary Charges Are Filed
In California, if a physician has a substance abuse or sexual boundary issue, he or she is free to participate in any treatment program on their own which will remain completely confidential. There is no duty to report the enrollment to the Medical Board. However, if the Board received a complaint that the physician has a substance abuse or sexual boundary problem, the Board investigates the matter to determine if sufficient evidence is found to proceed to disciplinary action.

Most Disciplinary Charges Arising From Substance Abuse Arise From Arrests And Convictions
In our practice, we see most discipline filings relating to substance abuse arising from misdemeanor convictions (such as driving under the influence or wet reckless) and felony arrests and convictions. Physicians (and other health care providers) are required upon renewal to disclose their misdemeanor and felony convictions.

As for arrests, physicians are not required to report a misdemeanor arrest but as for a felony arrest, they must report a felony indictment or a felony information (meaning that in a state criminal case the case has gone through preliminary hearing and the physician has been held to answer).  This means that if a doctor in California is arrested on felony charges, he or she does not need to report until held to answer after a preliminary hearing and an "Information" is filed. We have had cases where a physician was arrested on felony charges and we were able to have the charges dismissed before or at preliminary hearing which did not trigger any self-reporting requirements. Failure to report can be an additional ground for discipline.

Even though self-reporting is not required in felony cases until the Information is filed after a preliminary hearing, there is the risk that the city attorney or deputy district attorneys' office could notify the Board.  Prosecutors in criminal cases are required to notify the Medical Board (and Chiropractic, Osteopathic, Podiatric and "other allied health board") of any felony filings against a licensee upon obtaining information that the defendant is a licensee of that board.   California Business and Profession Code Sections 803.1. Thus, licensee must always be prepared for Board scrutiny where there has been an arrest. 

Reporting also occurs since court clerks are required to report misdemeanor and felony convictions of any persons licensed by the Medical Board and other Boards (Chiropractic, Dental, Osteopathic, Acupuncture, Nursing, Vocational Nursing, Optometry, Veterinary, Pharmacy, Speech-Audiology, Hearing Aid Dispensers, Respiratory Care, Behavioral Science).  California Business and Profession Code Sections 803.1 and 803.5.

Conclusion
Physicians and other licensees can expect that in California, disciplinary charges will be filed in lieu of any type of diversion program. Even where diversion programs exist (such as in nursing), the trend is to file disciplinary charges, place the licensee on probation and then require diversion. The Boards are very attuned to the political climate that they not be perceived as protecting physicians or other licensees and that the process be open to the public.

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 health care attorney, administrative attorney, and California Medical Board 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 California and throughout the country. Their website is: http://www.greenassoc.com/

6th Doctor Sentenced In Federal Health Care Fraud Case Involving Board And Care Facilities In Southern California: 17 Defendants Sentenced In Case Pending For 6 Years

On May 24, 2010, after six years of litigation, Xinming Fu, M.D., an Irvine physician -- as well as the 17th and final defendant in a complex Medicare fraud case -- was sentenced to 30 months in federal prison in U.S. District Court in Santa Ana, California by Judge James V. Selna. This sentence followed Dr. Fu's guilty plea to conspiracy to pay kickbacks and health care fraud. Out of the 17 defendants, 6 were physicians.

As part of his plea agreement, Dr. Fu admitted that he was part of a scheme that defrauded Medicare out of $15 million for respiratory treatments that were unnecessary, not performed in accordance with Medicare rules, or not performed at all. 

The 17 defendants were named in a criminal information and three indictments returned by federal grand juries as far back as 2004. Three of the cases involved a scheme in which the owner of a respiratory treatment program, Herman Thomas, recruited Medicare patients who were housed at board-and-care facilities throughout Southern California. It was alleged that from 2000 through 2006, Mr. Thomas and doctors that he recruited paid illegal kickbacks to marketers, who in turn paid illegal kickbacks to the owners and administrators of the board-and-care facilities, who provided access to mentally ill and elderly residents. 

It was further alleged that on a monthly basis, the doctors ordered respiratory treatments, which typically were unnecessary and were performed by respiratory therapists on a daily or almost daily basis without any physician supervision, in violation of Medicare rules requiring that a physician be on-site when respiratory treatments are performed. The government contended that the respiratory treatments also violated Medicare rules because the treatments should have been performed at a doctor’s office or in a mobile medical unit, instead of at the board-and-care facilities. 

In a scintillating allegation, the government contended that treatments were often performed in the facilities’ smoking rooms. It was also alleged that the mentally ill and elderly residents of the board-and-care facilities were enticed to undergo the respiratory treatments with soda, candy, donuts and even cigarettes. There were also some ghost billing allegations in that it was contended that some residents were not present at the board-and-care facilities because they were off-site receiving treatment at local hospitals, but Medicare was billed for respiratory treatments anyway.

The fourth case in this investigation arose from a respiratory therapist/marketer who previously worked for Mr. Thomas and recruited a doctor to run a separate, but similar respiratory program. 

The defendants previously sentenced as a result of this investigation were:

1. Dr. Aziz Awad, 47, formerly of Anaheim and Pasadena, was sentenced to 15 years in prison and ordered to pay $2,625,722 in restitution. This sentence was harsh compared to the other sentences since Dr. Awad was sentenced after trial. Obviously if one wins at trial there is no sentence, but there is a tax imposed for going to trial and losing.  
2. Herman Thomas, 51, of Bellflower, who was convicted at trial with Awad, was sentenced to 88 months imprisonment (a little over 7 years) and ordered to pay $2,625,722 in restitution.
3. Dr. Paul Arnold Lessler, 71, of West Hills, was sentenced to two years in custody and ordered to pay nearly $1.1 million in restitution after pleading guilty to conspiracy to commit health care fraud and health care fraud in a plea agreement.
4. Dr. Gershon Walter Hepner, 72, of Los Angeles, was sentenced to 30 months in custody and ordered to pay $422,400 in restitution after pleading guilty to conspiracy to commit health care fraud and pay kickbacks, and health care fraud in a plea agreement.
5. Dr. Aginah M. DeBerry, 57, of Rancho Cucamonga, was sentenced to one year in prison and ordered to pay $707,800 in restitution after pleading guilty to conspiracy to commit health care fraud and pay kickbacks in a plea agreement.
6. Glen Garcia Madrid, 46, of Yorba Linda, a marketer, was sentenced to one year in prison and ordered to pay $1,566,977 in restitution after pleading guilty to conspiracy to pay kickbacks and health care fraud in a plea agreement.
7. Levi Raitchik, 49, of Los Angeles, a marketer, was sentenced to eight months in custody and ordered to pay $395,100 in restitution after pleading guilty to conspiracy to pay kickbacks and health care fraud in a plea agreement.
8. Schmuel B. Fogelman, 49, of Los Angeles, a marketer, was sentenced to one year in custody and ordered to pay $693,000 in restitution after pleading guilty to conspiracy to pay kickbacks and health care fraud in a plea agreement.
9. Barbara Sue Thrash, 60, of Corona, a board-and-care administrator, was sentenced to 15 months in custody and ordered to pay $495,019.05 in restitution after pleading guilty to conspiracy to receive kickbacks and health care fraud in a plea agreement.
10. Teresita Cagudala Bolong, 62, of Rancho Palos Verdes, a board-and-care owner and administrator, was sentenced to six months in prison, ordered to pay a $17,000 fine, and ordered to pay $108,000 in restitution after pleading guilty to receiving kickbacks in a plea agreement.
11. Dr. David Todd Asher, 42, of Fullerton, was sentenced to probation and ordered to pay $6,850 in restitution after pleading guilty to conspiracy to pay kickbacks in a plea agreement.
12. Emilita Nunez Canenea, 50, of San Dimas, a board-and-care owner and administrator, was sentenced to probation, ordered to pay a $20,000 fine, and ordered to pay $18,000 in restitution after pleading guilty to receiving kickbacks in a plea agreement.
13. Shahnaz Chadorbaf-Arastoo, 54, of Irvine, a board-and-care owner and administrator, was sentenced to probation, ordered to pay a $5,000 fine, and ordered to pay $4,000 in restitution after pleading guilty to receiving kickbacks in a plea agreement.
14. Magdalena Gonzales, 57, of Denver, a board-and-care administrator, was sentenced to probation and ordered to pay $9,500 in restitution after pleading guilty to aiding and abetting a false claim in a plea agreement.
15. Hamid Rafizadeh, 54, of Escondido, a board-and-care administrator, was sentenced to probation, ordered to pay a $5,000 fine, and ordered to pay $8,500 in restitution after pleading guilty to receiving kickbacks in a plea agreement.
16. Alexander Tanciano Tagaro, 62, of Perris, a board-and-care administrator, was sentenced to probation and ordered to pay $7,500 in restitution after pleading guilty to receiving kickbacks in a plea agreement.

Posted by Tracy Green, Esq. Any questions or comments should be directed to Tracy Green, a very experienced health care fraud attorney and white collar attorney in Los Angeles  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/