Federal Jury Finds Mental Health Facility Administrator Guilty of Kickbacks for Referrals

Payment for recruiting and referral of patients. When is it marketing and when is it an illegal kickback? In a recent case, such payments were viewed as illegal kickbacks. 

On February 14, 2017, a federal jury deliberated after four days of trial and found a former Shreveport mental health facility administrator guilty Thursday of taking part in a kickback scheme. Tom McCardell of Louisiana was found guilty of 14 counts of paying illegal kickbacks. The jury only deliberated approximately four hours before delivering the guilty verdict. 

According to the evidence presented, from July of 2011 to November 2012, Mr. McCardell was the administrator of Physicians Behavior Hospital (PBH) in Shreveport, Louisiana a 24 bed behavioral health hospital. He made payments (viewed as kickbacks) to an Alabama resident, who had no medical training or background, to recruit and refer patients to PBH for psychiatric and substance abuse treatment. 

The hospital would then purchase bus tickets for the patients to travel to PBH in Shreveport. Many of the patients traveled unattended without escort. Mr. McCardell allegedly arranged for the payments to be issued in the name of the patient recruiter’s son which was used as evidence that there was knowledge it was illegal and was done to avoid detection. 

Evidence was also introduced that Mr. McCardell ordered PBH personnel to create an “employee file” in the name of the recruiter’s son in order to provide cover for the  payment (kickback) arrangement. 

Cardiologist Pleads Guilty to Federal Health Care Fraud Charges From 2010 and 2011 for Submitting False Claims and Records

On February 17, 2017, Roy G. Heilbron, a cardiologist practicing in Santa Fe, New Mexico, pleaded guilty in federal court in Albuquerque to a health care fraud charge, Count 4 from his 2015 Indictment. 

Dr. Heilbron's 24-count indictment originally charged him with health care fraud and wire fraud charges for allegedly defrauding Medicare and other health care benefit programs between January 2010 and May 2011 by submitting false and fraudulent claims in the following manner:

1.  Performing and billing for a wide array of unnecessary tests on every new patient and submitting false diagnoses with the billing claims to justify the tests to the insurance plans;

2.  Inserting false symptoms, observations, and diagnoses into patients’ medical charts to provide written support for the tests he ordered or performed;

3.  Inserting photocopied clinical notes, diagnostic test results, and ultrasound images in patients’ medical charts to create a written record of procedures that were either not performed or that had not been sufficiently documented to support the billing;

4.  Submitting the photocopied notes, results, and images to the insurance plans when the plans requested documentation to support the claims submitted;

5.  Submitting claims to health plans for procedures that were never performed;

6.  Submitting claims for procedures performed on two consecutive dates to increase the amount paid for services that were actually rendered together on one single date; and

7.  Misusing billing codes and modifiers in order to increase his rate of reimbursement.

Sales Representative Who Gave Gift Cards and Personal Checks to Medical Referral Sources Sentenced for Obstructing Federal Investigation of Health Care Offenses During Meeting With Investigators

It is becoming more common to charge individuals for "obstructing" a health care fraud investigation. Recently, on February 8, 2016,Terrence Kyle Tackett, a sales representative for multiple healthcare companies was sentenced in U.S. District Court in Boston in connection with obstructing an investigation into kickbacks paid to medical professionals.

From 2012 to 2013, Mr. Tackett worked as a sales representative in Kentucky for California-based healthcare company Cardio Dx, and from August 2013 to February 2015, he worked for Aegerion Pharmaceuticals, Inc., a Cambridge-based pharmaceutical company. 

Mr. Tackett now admits that from 2012 through February 2015 he gave medical professionals gift cards and personal checks in exchange for ordering or prescribing the products he promoted and to get access to private patient information protected by HIPAA. In May 2016, Mr. Tackett pleaded guilty to one count of obstruction of a criminal investigation of health care offenses.

However, during a January 2015 meeting with investigators, Mr. Tackett falsely denied and attempted to conceal the gift cards and checks he had been paying to physicians and their staffs for years in Kentucky and southern Ohio. 

Mr. Tackett was sentenced by U.S. District Court Judge Allison D. Burroughs to three years of probation, with the first six months in community confinement and then six months on home detention, 100 hours of community service to be completed during the last two years of probation, and a fine of $15,000. 

The obvious lesson here is not to meet with any federal investigators unless you understand your rights, the scope of the investigation and AFTER you have consulted with counsel. Importantly, not being honest with the investigators is a separate criminal offense and one that may be easier to prove than a kickback count.  

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

Forest Laboratories and Pharmaceuticals to Pay $38 million to Resolve Kickback Allegations for Payments to Physicians for Speaking Programs

The government has become far more aggressive in classifying payments to physicians by drug companies as "kickbacks" unless certain criteria are met. 

In a recent case, Forest Laboratories LLC, located in New York, New York, and its subsidiary, Forest Pharmaceuticals Inc., agreed in December 2016 to pay $38 million to resolve allegations that they violated the False Claims Act by paying "kickbacks" through payments and meals for alleged sham speaking programs to induce physicians to prescribe the drugs Bystolic®, Savella®, and Namenda®.  

The civil settlement resolves a qui tam lawsuit filed by former Forest employee Kurt Kroening, in federal court in Milwaukee, Wisconsin that the federal government and some state governments joined. The allegations were that Forest violated the Anti-Kickback Statute, which prohibits the payment of remuneration to induce referrals of items or services covered by federal health care programs, by providing payments and meals to certain physicians in connection with speaker programs about Bystolic®, Savella®, or Namenda® between Jan. 1, 2008 and Dec. 31, 2011.  

The United States contends that the payments and meals were intended as improper inducements because Forest provided these benefits even when the programs were cancelled (and Forest provided no evidence of a bona fide reason for the cancellation), when no licensed health care professionals attended the programs, when the same attendees had attended multiple programs over a short period of time, or when the meals associated with the programs exceeded Forest’s internal cost limitations. 

Physicians who receive payments or meals from drug companies for speaking need to ensure that they do the speaking, that the programs are current and occurred. In the Forest case, the physicians received payments even when the speaking programs were cancelled. It would also be good practice to notify patients in writing when prescribing medications for which payment has been received that they have received payments from the drug manufacturer. 

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

Six Florida Defendants Including Two Doctors Charged in Private Insurance Health Care Fraud Involving Sober Homes, Alcohol and Drug Addiction Treatment Centers and Drug Testing

Private insurance companies are aggressively pursing investigations into drug and alcohol rehabilitation centers, sober living homes, laboratories who process drug testing and physicians who make referrals. 

The referrals from licensed treatment centers to sober living facilities owned by the same or related parties is one red flag. In addition, a common issue is whether reduced rent to impoverished or unemployed clients is a referral payment. 

The cases that have more extreme facts are the ones that then get referred for criminal prosecution. A recent case has extreme facts alleged including billing for services not provided, falsification of records, not discharging clients using drugs, and excessive or unnecessary urine drug testing. 

On December 21, 2016, six Florida defendants, including owners, doctors, and an employee of sober homes and alcohol and drug addiction treatment centers were charged in a health care fraud scheme for filing fraudulent insurance claim forms and license applications and defrauding health care benefit programs.

Medical Device CEO by Sacramento Federal Judge Sentenced to One Year in Prison for Tax Evasion

On December 2, 2016, Briant Benson, a President and CEO of multiple medical device companies, was sentenced in Sacramento, California by U.S. District Judge Garland E. Burrell Jr. to 12 months and one day in prison for tax evasion. 

The year and one day sentences is more favorable that a one year sentence since it will qualify Mr. Benson for a 6 month sentence and halfway house. This sentence followed Mr. Benson's guilty plea in August.

According to court documents, during the years 2004 through 2006, Mr. Benson failed to file tax returns or pay any personal income tax to the Internal Revenue Service, despite receiving at least $2 million dollars in income as the President and CEO of multiple medical device companies. One of them Bentec Medical makes tubing and catheters, among other things, and the company was not involved in the allegations.