Vice-President of Tampa Physical Therapy Company Pleads Guilty to Conspiracy To Commit Health Care Fraud

Medicare fraud criminal cases involving physical therapy are not that common but a recent case out of Florida went criminal based on allegations that involved pure fraud in billing for services not provided.  On May 27, 2011, Andres Cespedes, an owner and vice-president of a physical therapy company, Dynamic Therapy Inc.  pleaded guilty to one count of conspiracy to commit health care fraud for his role in a scheme to defraud Medicare before U.S. Magistrate Judge Mark A. Pizzo in Tampa, Florida.

According to court documents, Mr. Cespedes was the vice president of Dynamic Therapy Inc. Mr. Cespedes and his co-conspirators purchased Dynamic from its prior owners and transformed it into essentially fraudulent enterprise. Dynamic purported to provide physical therapy services to Medicare beneficiaries, but in reality obtained patient information through kickbacks and bribes and billed Medicare for physical therapy that never occurred.

According to court documents, from fall 2009 to summer 2010, Mr. Cespedes submitted and caused the submission of $757,654 in fraudulent claims to the Medicare program by Dynamic. Mr. Cespedes admitted that he and his co-conspirators paid and caused the payment of kickbacks and bribes to Medicare beneficiaries in order to obtain their Medicare billing information, and used it to submit claims to Medicare for physical therapy services that were never provided. According to court documents, the owners and operators of Dynamic also stole the identities of a physical therapist and Medicare beneficiaries in order to submit additional false claims to Medicare.

Mr. Cespedes admitted that he knew the Medicare beneficiaries, on whose behalf claims were submitted to Medicare by Dynamic, never received the services billed to Medicare. At sentencing, Cespedes faces a maximum penalty of 10 years in prison and a $250,000 fine. A sentencing date has not been set.

Attorney Commentary - Providers: Watch Out For Identity Theft:  For health care providers including physical therapists, the biggest concern raised by this case is how the identity of the physical therapist was stolen. We have seen the identities of physicians and other health care providers stolen before in a very simple manner. Companies or individuals who want to steal identities sometimes place advertisements for jobs in a newspaper or website and then the applicants will send ALL the information attached to their CV including UPIN number, social security number, license number and other identifying information. That information is then submitted on a Medicare or Medicaid application to obtain a provider number for a new location.  Therefore, be careful when applying for jobs and sending your information to blind addresses.

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 who has represented physical therapists and a variety of other health care providers 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 in health care legal matters in California and throughout the country. Their website is: http://www.greenassoc.com/

Fired Mayo Radiology Technician With Drug Problem Indicted After He Diverted Drugs And Spread Hepatitis By Injecting Patients With Same Used Syringe He Used On Himself

An unusual health care related criminal case is pending in Jacksonville, Florida. This is not a fraud case but one where patients were allegedly harmed or killed by a hospital employee who was addicted to drugs, diverted drugs meant for patients and when he injected patients with a saline solution -- after having injected himself with the patients' drugs -- he ended up injecting and infecting patients with his own Hepatitis C virus.

On May 24, 2011, the U.S. Attorney's Office in the Middle District of Florida unsealed an indictment charging a radiology technician Steven Beumel, (48, Orange Park) with five counts of tampering with a consumer product, resulting in death or serious bodily injury, and five counts of obtaining a controlled substance by fraud. If convicted on all counts, Mr. Beumel faces a maximum penalty of life in federal prison.

According to the indictment, Mr. Beumel was a radiology technician at Memorial Hospital from May 1992 through October 2004. Mr. Beumel also worked as a radiology technician at Mayo Clinic from October 2004 through August 2010.

The indictment alleges that Mr. Beumel, before patients’ procedures, diverted syringes of Fentanyl (a synthetic opiad) meant for patients and injected himself with the Fentanyl. Mr. Beumel has allegedly admitted to been addicted to Fentanyl. He then allegedly refilled the empty syringes with saline, but these syringes were now contaminated with his own Hepatitis C Virus. Mr. Beumel has contended that he did not know he had Hepatitis C Virus.

According to the indictment, five different patients contracted Hepatitis C from Mr. Beumel. The indictment alleges that one patient died as a result from Mr. Beumel’s tampering.

An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.

This case was a joint federal and state investigation by the Federal Bureau of Investigation, the Food and Drug Administration, the Florida Department of Financial Services, and the Jacksonville Sheriff’s Office, Homicide Unit.

In a statement released by Mayo, the hospital said it continues to extend its deepest condolences to family and friends of those killed or injured by the hepatitis C transmission. Mayo has strengthened security changes to control narcotics, and expanded the hospital's drug-screening panel for potential new hires.

Commentary:  This case is a reminder that health care providers need to be careful in screening employees, monitoring employees for signs of drug or alcohol addictions, psychological problems, personality disorders and other issues employees might have that could cause them to act out and hurt other employees or patients (intentionally or inadvertently). The liability that these hospitals could face for the alleged actions of this radiology technician are significant. For smaller providers, a rogue or drug addict employee could cost them their business if there is not sufficient insurance to cover such liabilities. Moreover, an employee with a drug or alcohol problem could pose a danger to patient safety.

Health care providers need to monitor their employees and remember the great responsibility they have for patients' health. Diverting drugs is an all too common problem in hospitals and clinics.

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 fraud attorney  and California Medicare fraud attorney 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/

Owners, Managers, Employees & Patient Recruiter of Los Angeles Durable Medical Supply Business Convicted Of Health Care Fraud

One Los Angeles medical supply company that was billing Medicare for power wheelchairs has resulted in six arrests and convictions. Five were convicted by plea agreement and one defendant went to trial and was convicted. Not everyone has been sentenced in this case but even with plea agreements, the sentences so far have been lengthy (30 to 57 months) and show a trend in prosecuting employees who are not owners.

In September 2008 after an investigation by the federal Medicare Fraud Strike Force, the following people associated with Santos Medical Supply in Los Angeles were arrested and have plead guilty:

(1) Marlon Oslvaldo Palma, co-owner of Santos Medical Supply (57 months sentence);

(2) Elsie Edmonds, other co-owner of Santos Medical Supply (57 months sentence);

(3) Heber Josue Gonzalez, 30, manager of Santos Medical Supply (30 months sentence);

(4) Kelechi Ajoku, 29, a registered nurse purportedly in charge of Santos’ facility and its prescription items (sentencing scheduled May 6 by Judge Snyder after a jury convicted him of making false statements in connection with health care matters);

(5) Leslie Duarte, 25, defendant Elsie Edmond’s daughter and a manger at Santos (pleaded guilty to conspiracy and is scheduled to be sentenced); and

(6) Gloria Cristina Hernandez, 62, a patient recruiter (pleaded guilty to conspiracy and is scheduled to be sentenced by Judge Snyder on April 27).

According to the government, Santos Medical Supply submitted nearly $3 million worth of fraudulent claims to Medicare for alleged unneeded electric wheelchairs and other DME, which paid out $1,822,016. The $3 million in billing is important since that is used to calculate "intended loss" under federal sentencing laws.

For example, in Mr. Palma's plea agreement, he admitted to submitting claims to Medicare for $5,000 power wheelchairs and other medical equipment that were unnecessary and, in many instances, never provided to patients. Mr. Palma also admitted to having bought Medicare patient information and bogus prescriptions from a medical clinic and patient recruiters and then used that information to bill Medicare. 

As I have written before, the power wheelchair cases are part of a project by the Medicare Fraud Task Bureau.  There are more cases to come in both the state and federal jurisdictions.  If you owned or worked at a DME where power wheelchairs were billed, you should consult counsel to determine if you have any exposure in these investigations. Issues to analyze include: (1) cost of wheelchair and markup to Medicare; (2) delivery records; (3) medical necessity; (4) use of marketers; (5) transportation of patients to referring clinics; (6) cash withdrawals from bank accounts; and (7) numerous other issues that are case dependent.

Further, if you are a physician who wrote prescriptions for power wheelchairs in Los Angeles County or California, you should also consult counsel. Even if physicians are not charged, Medicare and Medi-Cal are aggressive about suspending provider privileges based on suspicion of fraud and abuse and physicians could be witnesses in criminal cases or be subject to complaints to the Medical Board. 

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 fraud, Medi-Cal fraud and Medicare fraud attorney 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/

Frequently Asked Questions: Should I Expunge My Conviction If I Am A Licensed Professional Or Want To Apply For A State License? What Is Expungement? Can I Get A Felony Reduced To A Misdemeanor?

Here is the second in a series of posts on frequently asked questions regarding misdemeanor and state felony convictions, expungements of those convictions and how expungements can affect licensed professionals during California Board or Bureau proceedings. This post will also assist other professionals and persons for whom a state conviction would affect their employment opportunities.

Question 2: What is an expungement?

Answer 2:  In California, the law regarding expungements is governed by Penal Code Section 1203.4 and 1203.4a.  An expungement reopens your criminal case, dismisses and sets aside the conviction or plea (of guilty or no contest), and re-closes the case without a conviction. In effect, you are no longer a convicted person. However, the case record itself will still exist, and the expungement will appear on your record.  There are three types of expungements:

(1)  Penal Code 1203.4 allows the court to expunge cases in which probation was part of the sentence. For example, straight probation cases or those with probation and county jail. The court must grant these expungements if you are not on probation, have completed all terms of your probation (including restitution and fines) and do not have a current crimnal case.

(2) Penal Code 1203.4a  allows the court to exercise its discretion and expunge cases in which there was no probation. In these cases, it is important to submit a declaration with setting forth your rehabilitation, the reasons you want expungement, and other relevant information. We often represent clients in these type of expungements where the court has discretion to deny the expungement.

(3) Penal Code 17 allows the court to reduce certain felony conviction to a misdemeanor. The misdemeanor can then be dismissed or expunged.  If you received state prison as your sentence, you are not eligible for a reduction to a misdemeanor. You will need to file paperwork for a Certificate of Rehabilitation instead.

This will be addressed in a subsequent post but if you had a felony conviction it it is important to have the conviction reduced to a misdemeanor before it is expunged. In determining whether to enter into a plea agreement, having a "wobbler" felony which can later be reduced to a misdemeanor is often a key negotiating point.

An expungement does not seal or destroy a client's criminal record, but it allows the client to state to a private employer (not to government or state licensing agencies or to certain  publicly funded employers like the lottery) that he or she has not been convicted of a crime.  Expungement of a client's record helps increase the likelihood that the client will be able to obtain employment and shows increase his or her family's financial stability.

Question 3: I am going to apply for a license (law, medical, nursing, real estate, etc.) and I had a criminal conviction in my past.  Should I have it expunged before I begin  the application or license renewal process or will it make any difference?

Answer 3:  Yes. Have it expunged since the expungement can be used as mitigating evidence by the Board or Bureau. As noted in my prior post on this topic (Do I Need To Disclose Convictions That Have Benn Expunged In Professional License Or Government Applications?), the expungement does not relieve you of the requirement to report the expunged conviction but is useful in order to obtain a license or obtain a lesser amount of discipline.   

I recommend that everyone have their convictions expunged since it also allows you to answer "no" to the question of whether you have ever been convicted of a felony or misdemeanor in any job application. However, remember that many employers conduct background checks and the conviction will still show up in background checks along with the expungement.

Question 4: Once my conviction is expunged, can I answer "No" to questions about convictions on job applications?

Answer 4: Legally, you may answer "No" to these types of questions. Keep in mind, though, that background checks typically go back 10 years, and employers can see that you had a conviction dismissed.

I have had calls from frustrated job applicants realizing they were losing employment opportunities after the background checks. Thus, if you know it is a large company that will run a background check, you may decide that answering "No" could look dishonest. A better response for some employers may be "Yes in 2005, but case dismissed and expungement granted in 2009."You could also attach a letter of explanation to explain the circumstances and how you have turned your life around and what you learned from that experience.

If you are applying for a government job, a job that requires security clearance, or a job that requires a government-issued license, certificate or permit, the conviction will be discovered during the standard background check. You should disclose the conviction and expungement in these situations.

If you are applying for a government-issued license, certificate, or permit, you must disclose your conviction and expungement.

As I noted in a prior post, the California Boards and Bureaus have gotten a lot tougher over the past five years and failure to invest adequate time and effort into this process (including proper expunegment and reduction to a misdemeanor) can cost someone a lot of lost income due to delay or denial of licensing. Spending $1,000 to $5,000 in putting together a mitigation and expungement package and explanation can often save clients hundreds of thousands of dollars over a few years.  It is in investment that is often well spent. 

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, an experienced California board, administrative and licensing attorney with more than 25 years' experience 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 professionals in California and throughout the country. Their website is: http://www.greenassoc.com/

Happy Valentine's Day

Do I Need To Disclose Convictions That Have Been Expunged In Professional License Or Government Applications?

Here is a series of posts on frequently asked questions regarding misdemeanor and state felony convictions, expungements of those convictions and how expungements can affect licensed professionals during California Board or Bureau proceedings.

Question 1: I am going to apply for a license (law, medical, nursing, real estate, etc.) and I had a criminal conviction in my past but it was expunged.  Do I need to disclose it?

Answer to Question 1:  The short answer is "YES." The failure to disclose expunged convictions gets more applicants into trouble with Boards and Bureaus (and results in probably as many denials of licenses) than the disclosing of the conviction does since it allows the Board or Bureau to deny your application on the ground that you "made a false statement" on your application.  The hallmark of professionalism is honesty so if they see you any false statement, it is a huge problem and claiming you did not understand that you had to disclose the expunged conviction is not persuasive after the fact.

In fact, it is not only "expunged" convictions you will probably have to disclose but also other kinds of arrests that resulted in diversion or deferred entry of judgment.  It is necessary to read the application carefully and the definition of "conviction."

And long answer is that "Yes, you disclose but you want to disclose it in the best manner possible." A well written statement of explanation and mitigation package submitted to the Board or Bureau can make a huge difference in how your application is treated.

Remember, an expungement does not:

• Remove the conviction from your criminal history. California and FBI criminal history records will still show the conviction and the subsequent dismissal. Thus, when the agency does a background check it will come up.
  
• Allow you to omit the conviction from applications for government-issued licenses.
• Prevent the conviction from being used to refuse or revoke a government license or permit, such as real estate license, teaching credential, security guard certificate, etc. 
• Seal the court case file from public inspection. The court file remains public record.

I am often hired to help physicians, lawyers, nurses and other professionals submit written explanations and packages of prior convictions. It is often necessary where my clients speak English as a second language and also do not understand culturally how to present this type of information in the best light possible. You need to take full responsibility for your actions, be accurate and honest and at the same time explain how something like this will not ever happen again.

It is better if I am involved from the beginning but often I get hired after the application has been denied and we need to file an appeal. The old saw that "good beginnings make good endings" applies here and even educated clients need an objective person to know how to write for the Board or Bureau.

There is usually some aspect of shame, embarrassment or emotion involved (especially when the conviction is old or was unfair) that can cause the applicant to not take it as seriously as it should. Or it is assumed that because the conviction is over 10 years' old, it will not be used to deny a license or application.

The California Boards and Bureaus have gotten a lot tougher over the past five years and failure to invest adequate time and effort into this process can cost someone a lot of lost income due to delay or denial of licensing. Spending $1,000 to $5,000 in putting together a mitigation package and explanation can often save clients hundreds of thousands of dollars over a few years.  It is in investment that is often well spent. 

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, an experienced California board attorney, administrative attorney, and California licensing attorney with more than 20 years' experience. 

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 professionals in California and throughout the country. Their website is: http://www.greenassoc.com/