Enforcement agencies remain vigilant and aggressive in investigating healthcare fraud.
Here are 10 recent cases, totaling $110 million in settlements:
#1. $21+ Million Over Fraudulent Rehab Therapy Services
Strauss Ventures LLC, doing business as The Grand Health Care System, and 12 affiliated skilled nursing facilities (collectively, the Grand) agreed to pay $21.3 million to resolve allegations of violating the False Claims Act. The Department of Justice (DOJ) claimed that the facilities submitted false claims to Medicaid for therapy services that were “unreasonable, unnecessary, unskilled or that simply did not occur as billed.”
As part of the settlement, the Grand admitted that some of its former managers set quotas for each of its 12 facilities, including quotas for how long patients stayed and how much money was billed per patient. To meet these quotas, the facilities often scheduled patients for therapy even when it wasn't needed. The Grand also told the facilities not to discharge more than three patients a week and to not discharge Medicare Part A patients without talking to corporate first. This led to some Medicare patients staying in therapy longer than they needed to.
#2. Chronic Disease Management Provider Pays $14.9 Million to Resolve False Claims
Bluestone Physician Services of Florida LLC, Bluestone Physician Services, P.A. and Bluestone National LLC, operating in Florida, Minnesota and Wisconsin, respectively, agreed to pay $14.9 million to settle allegations of submitting inflated claims.
The civil settlement resolves claims that Bluestone knowingly submitted claims for two Evaluation and Management (E&M) codes – the domiciliary rest home visit code for established patients (99337) and the chronic care management code (99490) – that did not support the level of service provided.
“Healthcare companies that institute a practice of upcoding and unnecessary billing will be held accountable for their misconduct,” said U.S. Attorney Andrew M. Luger for the District of Minnesota.
#3. $27+ Million in Cancer Genomic Testing Medicare Fraud Case
Daniel Hurt, who owned and/or operated Fountain Health Services LLC, Verify Health, Landmark Diagnostics LLC, First Choice Laboratory LLC and Sonoran Desert Pathology Associates LLC, was ordered to pay over $27 million for his involvement in a Medicare fraud scheme related to cancer genomic testing (CGx).
The United States accused Hurt of working with others to trick Medicare beneficiaries into getting medically unnecessary CGx lab tests. Hurt allegedly worked with telemarketers to find patients, telemedicine doctors to prescribe the tests, labs to do the tests, and billing companies to send bills to Medicare.
#4. Hospital to Pay $2.43 Million Over False Claims Act Allegations
Cape Cod Hospital, based in Hyannis, Massachusetts, agreed to pay $2.43 million to settle claims that it billed Medicare for transcatheter aortic valve replacement (TAVR) procedures that did not meet Medicare's rules for patient eligibility. In some cases, patients weren't properly evaluated for TAVR procedures by enough doctors. In other cases, doctors didn't write down their opinions or share them with the team that did the TAVR procedures.
“Hospitals that participate in the Medicare program must abide by applicable coverage and reimbursement rules,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will hold healthcare providers accountable when they knowingly fail to comply with Medicare reimbursement requirements.”
#5. Texas-based Home Health Provider Agrees to Pay $4.2 Million in Medicare Fraud Settlement
Elara Caring, and its wholly owned subsidiaries JHH/CIMA Holdings Inc., CIMA Healthcare Management Inc., CIMA Hospice of Texarkana L.L.C., CIMA Hospice of East Texas L.L.C. and CIMA Hospice of El Paso L.P., agreed to pay $4.2 million to settle allegations that it billed Medicare for the care of hospice patients in Texas who were ineligible for the Medicare hospice benefit because they were not terminally ill.
The settlement also addresses claims that Elara Caring knew about and improperly concealed or avoided their duty to return overpayments for these patients.
#6. Laboratory Marketer and North Carolina Physicians Settle Kickback Allegations for Over $1.3 Million
Laboratory marketer Thomas Anthony Carnaggio, of Irmo, South Carolina, and his marketing company, as well as three physicians in Charlotte, North Carolina, Steven Bauer, M.D., Larry Berman, M.D. and Alireza Nami, M.D., and their medical practices, agreed to pay over $1.3 million to settle False Claims Act violations. The DOJ claimed that the defendants engaged in a scheme where kickbacks were exchanged for referrals of laboratory services, leading to improper Medicare and TRICARE billing.
“It is unethical and wholly inappropriate for physicians to accept financial incentives to drive business,” said Special Agent in Charge Chris Dillard of the Defense Criminal Investigative Service (DCIS) Mid Atlantic Field Office.
#7. Marketers and Physicians in Five States Settle Laboratory Kickback Allegations for Over $15 Million
In another significant enforcement action, laboratory marketers and physicians across five states agreed to pay over $15 million to settle allegations of engaging in a kickback scheme involving laboratory services. The settlements address claims that the lab marketers paid doctors to refer patients to their labs, and that the doctors accepted these kickbacks disguised as consulting and medical director fees.
“Clinical laboratories, marketing companies and health care practitioners are on notice that kickback arrangements in any form are not acceptable,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “No matter how they are named – as a ‘consulting fee,’ ‘commission’ or otherwise – or whether they are paid through intermediaries, kickbacks undermine the integrity of medical decision making and have no place in our healthcare system.”
#8. Laboratory and Three Owners Pay $13.6 Million for Alleged Medicare Lab Billing Fraud
Gamma Healthcare Inc. (Gamma), a laboratory located in Poplar Bluff, Missouri, and three of its owners, Jerry W. Murphy, Jerrod W. Murphy and Joel W. Murphy (the Murphys), agreed to pay $13.6 million to settle allegations that they improperly billed Medicare for laboratory services that were not medically necessary and were not ordered by a physician.
In this case, when a physician ordered a urinalysis (UA) with culture and sensitivity (C&S) or just a C&S, Gamma automatically performed, and submitted claims for payment to Medicare for, a urinary tract infection (UTI) panel of tests by polymerase chain reaction (PCR). Medicare reimbursements for the UTI PCR tests were significantly higher than reimbursements for a UA with C&S.
This civil settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by a physician who ordered laboratory tests from Gamma and raised concerns that the UTI PCR tests were not ordered, were expensive, and not medically necessary.
Gamma, Jerry and Jerrod Murphy also agreed to a 15-year exclusion from federal health care programs.
#9. DME Company Owner Sentenced to 3+ Years in Prison for $87 Million Healthcare Fraud Conspiracy
A man involved in a massive healthcare fraud and kickback conspiracy was sentenced for his role in defrauding Medicare out of $87 million. According to court documents, Mark Sorensen, 53, of Chicago, owned Symed Inc. (Symed), a Chicago durable medical equipment (DME) company that paid illegal kickbacks to obtain Medicare, TRICARE, and Workers’ Compensation Program beneficiaries. The company then submitted claims for braces the patients did not need nor want.
Sorensen was ordered to forfeit $1.8 million for his participation in the conspiracy and was sentenced to three and a half years in prison.
#10. DOJ Sues Six Health Plans and Their Alliance for Concealing Overpayments to Military Health Program
The DOJ filed a lawsuit against six health plans and their alliance, alleging they concealed overpayments made by the military health program TRICARE. The lawsuit claims the defendants failed to report and return overpayments, violating the False Claims Act.
According to the complaint, the plans learned of calculation errors that had inflated the rates they had been paid in prior years for healthcare services to military personnel, retirees, and their families. Instead of fulfilling their obligations to return overpayments, the plans hid evidence of the overpayments and continued to submit invoices at the inflated payment rates.
“Contractors have an obligation to return overpayments, and we will hold accountable contractors that knowingly and improperly retain such funds,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.
Call Today to Speak With Our Healthcare Investigations Legal Team
Most healthcare investigations start with a “medical records request” from the Centers for Medicare & Medicaid Services (CMS) or one of its program integrity contractors or UPICs. CMS contracts with third-party auditors, such as Qlarant Integrity Solutions and SafeGuard Services, to detect and investigate fraud, waste, and abuse among Medicare and Medicaid claims.
If you are contacted by an agent or officer with a federal agency – or if you get a medical records reviews request from CMS or receive a Civil Investigative Demand or subpoena – contact Hendershot Cowart immediately.
Failure to fully and completely respond to an initial request for medical records can quickly escalate and can result in recoupments and revocation as a Medicare or Medicaid provider. Our healthcare investigation attorneys can immediately intervene to protect your rights and position your practice for the best possible outcome.
To speak with a member of our team about our healthcare regulatory compliance and healthcare fraud investigations defense services, call (713) 909-7323 or contact us online.
