Compliance | Kickback

Record Bust: 601 Defendants, Including 165 Doctors, Nurses and Other Licensees Charged With Over $2 Billion in Fraud

On Thursday, June 28th, the DOJ and HHS announced the largest ever health care fraud enforcement action. It resulted in charges against 601 defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals,  for their alleged participation in health care fraud schemes involving more than $2 billion in false billings.

The cases were coordinated by the Medicare Fraud Strike Force, a partnership between the DOJ’s Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. Other federal and state agencies participated.

The prosecutions have a heavy opioid/dangerous narcotics focus: Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing those drugs.

Importantly, in addition to targeting schemes billing Medicare, Medicaid, and TRICARE, the feds also went after defendants who focused on billing private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries.

The defendants allegedly participated in schemes to submit claims for treatments that were medically unnecessary and often never provided. Patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare.

The federal investigation was coordinated with a number of states’ Medicaid Fraud Control Units. As a result, in the states of Arizona, Arkansas, California, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Kansas, Louisiana, Maine, Michigan, Missouri, Mississippi, Nevada, New York, Oklahoma, Pennsylvania, Texas, Vermont, and Washington, 97 defendants were charged with defrauding the Medicaid program out of over $27 million.

From the many examples of alleged facts in the DOJ announcement:

  • An indictment in a compounding pharmacy fraud case alleges an attorney/marketer paid kickbacks and offered incentives such as prostitutes and expensive meals to two podiatrists in exchange for prescriptions written on pre-printed prescription pads, regardless of the medical need for the prescriptions. Once the prescriptions were filled, members of the conspiracy submitted approximately $250 million in fraudulent claims to federal, state, and private insurers for the compounded drugs.
  • In another case, defendants are a pharmacy chain owner, managing partner, and lead pharmacist charged with a drug and money laundering conspiracy. According to the indictment, the coconspirators used fraudulent prescriptions to fill bulk orders for over one million pills of hydrocodone and oxycodone, which the pharmacy, in turn, sold to drug couriers for millions of dollars.
  • A prosecution alleges a home health fraud and kickback conspiracy which resulted in more than $6.2 million paid by Medicare based on fraudulent billings.
  • A physician/owner of a pain management clinic was charged with unlawfully prescribing more than two million dosage units of Oxycodone.
  • Twelve defendants, including five medical professionals, were charged in various schemes involving health care fraud, unlawful distribution of controlled substances, aggravated identity theft, and money laundering. One of the schemes involved the operation of two false-front medical clinics.

The feds also announced that since this time last year, they excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, of whom 587 were excluded for opioid diversion and abuse. Over the past fiscal year, the DOJ has won or negotiated over $2 billion in judgments and settlements related to matters alleging health care fraud.

For those interested in the full press release, it can be found here. Additionally, documents (photos, links to indictments, and more) relating to the cases can be found here.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

Continue Reading...

Compliance | False Claims Act

$2.6 Billion Collected by Feds From Compliance Cheats. ROI Makes Warren Buffet Look Like an Amateur.

Even Warren Buffet can’t get you this return: 420% over three years.

And, it’s 100% leveraged. OPM.

Well, not OPM as in “other people’s money,” but OPM as in “our public money.”

That’s the return on investment that the Feds generated from 2015 to 2017 as a result of coordinated Department of Health and Human Services and Department of Justice healthcare anti-fraud operations.

In total, their efforts returned $2.6 billion.

And, as icing on the compliance cake, the Feds also obtained some non-monetary rewards (especially for those who count convictions as wins): In 2017 alone, the DOJ opened 967 new criminal healthcare fraud investigations, leading to criminal charges against 720 defendants. 639 defendants were convicted of health care fraud-related crimes during the year.

But that’s just the DOJ. The joint DHHS/DOJ Medicare Fraud Strike Force brought charges against an additional 478 defendants, negotiated 290 guilty pleas and obtained convictions against another 40 defendants. 305 individuals went off to prison for an average sentence of more than 50 months behind bars.

If you previously wondered why we have laws such as the federal Anti-Kickback Statute and Stark, and questioned whether they are based on fact or fiction, you might as well give up your queries. After all, it’s a big business. No, that’s incorrect. It’s a big bureaucracy.

In the vernacular, them’s the facts. So, we have to deal with them.

Compliance is not just a punch card list. It’s not just a plan. It’s not just a program. It’s a target, the one that’s painted on your back. There’s hotlines and whistleblowers and strike forces and postal inspectors and Assistant U.S. Attorneys looking to make their stripes. You have to assume that they’re all looking at you.

There’s baseline self-inspections, there are red teams to privately ferret out your weaknesses, there’s active compliance versus passive time wasting. If you need help, get in touch fast.

Get moving. Now.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

Continue Reading...