San Diego Pharmacy Owners Pay $750,000 to Resolve Civil Drug Diversion, Record Keeping and Logbook Allegations After DEA Audit

On November 17, 2015, a group of San Diego pharmacies and their owners paid $750,000 to the federal government to resolve allegations that they mishandled significant amounts of highly addictive and frequently abused prescription narcotics, as well as ephedrine or pseudoephedrine products. This was a civil settlement with the DEA and any true wrongdoing of a criminal nature appeared to be done by pharmacy technicians.

In addition to paying $750,000 in settlement to the government, Medical Center Pharmacy has committed to implementing new inventory control procedures to assure full accountability of all controlled substances.

New York Doctor Sentenced To 46 Months In Prison For Payments for Test-Referrals With New Jersey Clinical Lab. Payments Were Made to Doctors Under Lease, Consulting, Service or Management Agreements With Doctors Where Referrals Occured Were Called "Bribes" or "Kickbacks" and Agreements Were Called "Sham"

A doctor, Brett Halper MD, with a practice in Rockville Centre, New York, was sentenced November 18, 2015 to 46 months in prison for accepting payment in exchange for test referrals from by Biodiagnostic Laboratory Services LLC (BLS) in New Jersey billed to Medicare. Dr. Halper plead guilty in Newark federal court and did not go to trial.

This was part of a large investigation which resulted in 38 guilty pleas – 26 of them doctors – in connection with the lab kickback arrangement. The investigation has so far recovered more than $11.5 million to date through forfeiture.

The fact that 26 doctors were charged shows that simply because a large number of physicians enter into these arrangements does not mean that they are legal or will pass muster. The government contended that these were "sham" agreements even though attorneys had drafted them.

The lab BLS and four of its executives were also charged. The referral or "bribe" arrangements were the ones that were common in the clinical lab business: lease, service or consulting agreements.

HIPAA Audit - Learn From Recent $750,000 Settlement Between Medical Practice and HHS and OCR on Deficiencies in HIPAA Compliance After Data Breach

In our practice, we conduct HIPPA and HiTECH compliance audits for health care clients and business associates (companies that service health care companies). We also represent them when a HIPAA complaint has been filed or reported. 

We do this as a law firm since our communications are protected by the attorney-client privilege unlike regular consultants. 

Most small and mid-sized practices are not fully compliant and have not had audits. We go in, evaluate all existing policies and documents, create or revise a HIPAA compliance plan and employee handbook, document updated employee training, and peform a HIPAA HITECH initial audit which is confidential. 

We work on a flat fee that gets spread out over the year and includes phone calls, emails and meetings to avoid high hourly charges and encourages efficiencies. We help make sure that HIPAA is integrated into the culture.

Some companies or practices have staff to implement changes and other times we perform them. During our attorney-client privileged meetings, we have a master list and then implement a master action plan that will culminate in a final HIPAA audit to be documented. We bring in less expensive consultants as needed to save money for the company or practice as needed. 

Why is it important these audits be documented? If there is a HIPAA complaint by a patient or a data breach reported to OIG or Office for Civil Rights (who handles HIPAA complaints) or to the State of Californa DHCS Officeof HIPAA Compliance, they conduct audits. If there is a breach but it is found that there was prior compliance, proper policies and procedures, documented training, and a documented audit in place - the fines and punishment will be far less. It also helps avoid civil lawsuits by patients for state privacy breaches (since HIPAA does not give a private right of action). 

Injured Worker's Hearing Representative and Interpreter Charged With Insurance Fraud for Cashing Settlement Check Intended for Deceased Client

On an unusual case that arose from a workers’ compensation lawyer’s office, a hearing representative from the law office was charged with multiple felony counts of insurance fraud and grand theft on November 12, 2015. There is no allegation that the lawyer knew of the alleged fraud. The case is being prosecuted by the Los Angeles County District Attorney's Office in Los Angeles County Superior Court. 

Miami-Area Pharmacy Owner Sentenced to 42 Months in Prison for Role in $1.5 Million Medicare Part D Fraud Scheme

A Miami-area pharmacy owner,Tamara Esponda, was sentenced November 17, 2015 to 42 months in prison for her role in the submission of more than $1.5 million in fraudulent claims to Medicare Part D. This was a case of ghost billing - billing for drugs that were not prescribed or provided to patients.

This is the kind of black and white case that one expects in health care fraud and is not one that involves complex regulatory issues. This also involves identity theft issues where there is billing of patients' Medicare without their consent. Miami, Los Angeles, and New York continue to be the areas with the most health care fraud prosecutions.

Recent Federal Indictments in Workers Compensation Cases Show Efforts to Obtain Hard Evidence by Secret Recordings, Text Messages, Emails and Mailings to Strengthen Their Cases

In the three Indictments filed last week by the Southern District in San Diego where the medical treatment and billings were California workers' compensation patients, one thing is clear. 

In order to prove that payments for rent, consulting, management or other professional services were, in fact, illegal payments for referrals -- it appears to have been decided that "hard" evidence of conversations, text messages, emails where the parties admitted that the payments were for patient referrals were needed. 

Each of the three Indictments contain details that reveal detailed conversations and unindicted coconspirators who are not named as defendants. This level of detail may be used -- as well as the Indictments filed themselves -- to persuade other targets to cooperate or plea in order to obtain more favorable treatment before an Indictment is filed.

For years, the U.S. Attorney's Office has shown little interest in prosecuting cases that did not involve federal funded government programs.  The wave of Indictments that is expected to exceed fifty (50) providers within the next year will show that informal policy has changed.

In one case, United States v. Grusd, et al, Case No. 15CR2821, the federal authorities targeted a provider, Dr. Ronald Grusd, who had been part of a federal qui tam case years before. While Dr. Grusd's entities reached a settlement in July 2010 and he was ultimately dismissed, it seems the federal authorities' interest in him did not. Defendants are presumed innocent and an Indictment is not evidence.

A review of the Indictment shows how this case is being put together. Other cases will probably follow a similar pattern.