The following is a summary of selected federal Department of Health and Human Services’ Office of Inspector General (OIG) reports of fraud and abuse enforcement activity across the country. The enforcement actions reported are based upon federal and individual states’ activity reported by OIG through its listserv on Enforcement Actions.
The summaries reflect areas of OIG’s and individual states’ current and recent enforcement activity. Knowing where regulators’ attention is focused help health care providers identify areas of attention for compliance and risk assessment activities. Although not all the enforcement actions may be relevant to any one provider’s health care business, there may be some summaries that could be used as examples in compliance program education programs (“What to avoid”), or used in developing a risk management plan. (Note: An Acronym Key appears at the end of the Report.)
Of Note in this Issue:
- Cigna executes a five-year Corporate Integrity Agreement. (Corporate Integrity Agreement section below.)
- Nurse practitioner convicted of Medicare fraud that included billing for more cancer genetic tests than any provider in the nation (including oncologists and geneticists) and for routinely billing Medicare for complex office visits that resulted in billings for over 24 hours in office visits in a single day. (September 22, 2023.)
- New York physician treating nursing home patients for routine care, but billing at a critical care services level agrees to an Integrity Agreement with OIG. (September 22, 2023.)
- New York cardiologist and his practice settled allegations that it used inflated rental payments, as well as payments based on the number of tests and procedures referred, to pay for referrals for cardiology procedures and related tests. Rental agreements allegedly included a 300% return on investment threshold for the defendants to enter into or maintain the rental agreements, with rental payments withheld if referrals did not hit expected levels. (September 19, 2023.)
- Self-disclosure and collaboration with the federal government related to credible evidence of potential violations of STARK law (for billing for certain services referred by physicians with whom an entity has a financial relationship) and AKS (for prohibitions on offering or paying remuneration to induce referrals) resulted in a settlement between the Entity and the government. The Entity involved acquired eleven practices and its former management offered to increase the purchase price of the practices in return for referrals to affiliates of the Entity after the purchase. (September 14, 2023.)
- Medical practice settled allegations that it improperly used an E&M code modifier that is only appropriate when there is a separate and distinct E&M service on the same day as a procedure. Additionally settled were allegations that physician billing numbers were used for services provided by non-physician providers who treated patients in the treating physician’s temporary absence. (September 13, 2023.)
September 29, 2023 OIG Listserv Release
TennCare Fraud Investigation Leads to Indictment of Campbell County Woman
TN. Defendant is alleged to have fraudulently obtained Medicaid payments for services not provided to Medicaid recipients and by submitting time sheets for a caregiver who the investigators learned was deceased.
Hospice Medical Director Sentenced for $150M Hospice Fraud Scheme
TX. See related article summarized on September 28, 2023, below.
September 28, 2023 OIG Listserv Release
Owner of Telemedicine Companies Pleads Guilty to $44 Million Medicare Fraud Scheme
MA. Defendant, through his companies, allegedly entered into business relationships with telemarketing companies that generated leads by targeting Medicare beneficiaries. The telemarketers allegedly paid the Defendant’s companies on a per-order basis to generate orders for DME and genetic testing for these beneficiaries. The Defendant allegedly worked with medical staffing companies to find doctors and nurses who would review and sign prepopulated orders, typically without contact with beneficiaries, to create records that falsely portrayed the medical providers as having performed a legitimate examination of the beneficiary. The Defendant allegedly provided the signed orders to the telemarketing companies, which sold the orders to DME suppliers and labs the Defendant allegedly knew would use them to submit claims to Medicare for DME and genetic testing that was medically unnecessary, based on false documentation and tainted by kickbacks.
Hospice medical director sentenced for $150M hospice Fraud Scheme
TX. Defendant allegedly served as the medical director of a large health care company that marketed their hospice programs through a group of companies. It is alleged the group enrolled patients with long-term incurable diseases (e.g., Alzheimer’s and dementia) and patients with limited mental capacity who lived at group homes, nursing homes and in housing projects. The marketers allegedly told some patients that they had less than six months to live and sent chaplains to patients based on the false pretense they were near death. The group hired the Defendant and other medical directors, but allegedly made their medical director fees contingent upon an agreement to certify unqualified patients for hospice care. In addition to the regular medical director payment, non-cash compensation was paid in exchange for Defendant’s certification of unnecessary hospice services. In exchange for the kickbacks, the Defendant allegedly certified unnecessary hospice services for payment.
Owner of Home Health Company Convicted of $2.8M Medicare Fraud Scheme
MI. Defendant allegedly is an Indian national who owned and operated a home health company and, despite being excluded from Medicare, purchased the home care company by using the names, signatures and personal identifying information of others to conceal his ownership in the company. It was alleged that he and his co-conspirators billed and were paid for services never provided and then the proceeds were transferred to shell corporations that eventually transferred funds to the Defendant’s accounts in India.
Outside the scope of this summary are the allegations related to witness tampering, money laundering, and identity theft.
September 27, 2023 OIG Listserv Release
United States Obtains More Than $370 Million In Judgments Against Kentucky Businessman And His Companies For Laboratory Testing Scheme That Targeted Medicare
FL. Defendants are a businessman and his lab testing companies that allegedly violated the FCA when he caused his labs to bill Medicare for expensive molecular tests that were not ordered by a licensed health care provider.
Charlotte Doctor Is Found Guilty Of Making False Statements In Connection With $5 Million Durable Medical Equipment Scheme
NC. Defendant is a physician who allegedly worked as an independent contractor for a telemedicine company during the relevant period and she signed fraudulent orders for medically unnecessary DME for Medicare and TRICARE beneficiaries. Allegedly, her orders provided that she was treating the patients for the listed medical condition and the braces ordered were medically necessary, but the allegations include: she never examined the beneficiaries, had little or no interaction with the beneficiaries, and made no medical determination whether the devices were medically necessary or that the DME was actually needed by the beneficiaries. The telemedicine company allegedly provided the Defendant with unsigned orders for orthopedic braces, which the Defendant signed and returned to the telemedicine company in exchange for $20 for each assessment purportedly performed.
September 25, 2023 OIG Listserv Release
Virginia Medical Equipment Provider Ordered to Pay $12 M in Medicare Fraud Scheme as Civil Penalty
VA. Defendant is a DME provider that allegedly used DME prescriptions illegally purchased from marketing companies to submit claims for medical braces provided to Medicare-enrolled patients. The Defendant’s owner (who reached a separate agreement with the United States) allegedly paid a fee for each purchased prescription and then used the personal and medical data provided by the marketing companies to submit the claims that violated the FCA.
September 22, 2023 OIG Listserv Release
Nurse Practitioner Convicted of $200M Health Care Fraud Scheme
FL. Defendant was a nurse practitioner who allegedly submitted false and fraudulent claims for expensive genetic testing and orthotic devices that Medicare beneficiaries did not need. The alleged scheme involved telemarketing companies contacting Medicare beneficiaries to convince them to request orthotic braces and genetic tests and then use pre-filled orders for these products that the Defendant signed which attested that she examined or treated the patients when she never spoke to many of the patients. The Defendant allegedly ordered more cancer genetic tests for Medicare beneficiaries than any other provider in the country (including oncologists and geneticists) and the Defendant allegedly billed Medicare as though she were conducting complex office visits. She allegedly also billed more than 24 hours of office visits in a single day.
Queens Physician Settles Health Care Fraud Claims for $1.3 Million and Enters into Integrity Agreement to Ensure Future Compliance
NY. Defendant is a physician who allegedly billed for critical care services (e.g., treatment for imminent life-threatening deterioration of the patient’s condition) for patients in nursing homes when the service provided was for routine care, such as medical check-ups. This resulted in an alleged extra payment to the Defendant to which he was not entitled.
In addition to the settlement agreement, the Defendant entered into a separate Integrity Agreement with OIG that imposes a number of obligations on the Defendant to ensure compliance with Medicare rules and regulations.
Attorney General James Secures More Than $3 Million from Health Care Company for Illegal Kickback Scheme — Gramercy Cardiac Illegally Paid Millions to Doctors in Exchange for Patient Referrals
NY. See September 19, 2023 summary below: U.S. Settles False Claims Act Lawsuit Against Cardiologist And His Medical Practice For Paying Millions In Kickbacks For Referrals
Attorney General Moody Announces Arrest of Care Provider for Overbilling More than $13,000 to Medicaid Program
FL. Defendant allegedly is a direct-service worker providing personal support services to multiple disabled adults under Medicaid. The Defendant allegedly falsified time sheets and reported more than 800 hours of services that he never provided, resulting in over $13,000 in Medicaid overpayments. Rather than reporting an accurate count of hours to Medicaid under the group reimbursement rate, he allegedly falsified hours, both to bill the higher individual reimbursement rate and to inflate the total hours worked.
Attorney General Bonta Announces $925,000 Settlement with Palm Springs Pharmacy
CA. Defendant is a pharmacy that allegedly sought and received Medicaid reimbursement for drugs that it over-dispensed (per an authorized prescription), or that it dispensed without receiving a valid prescription.
Missouri Physicians and Pain Management Practices Agree to Pay Over $650,000 to Settle Kickback Allegations Involving Laboratory Testing
MO. Defendants are physicians and their pain management practices who allegedly received kickbacks from lab testing operations in multiple states. The Defendants and their practices allegedly received payments from purported MSOs in return for ordering lab referrals to specific clinical labs in violation of the AKS and FCA.
September 21, 2023 OIG Listserv Release
Charlotte Behavioral Health Services Provider Is Indicted For Defrauding The South Carolina Medicaid Program And COVID-19 Relief Fraud
NC. Defendant was a behavioral health services provider that allegedly owned a SC Medicaid enrolled outpatient behavioral health services provider. The Defendant allegedly submitted fraudulent claims to SC Medicaid and contracted managed care plans for services that were never provided. Additionally, the Defendant allegedly: paid for SC Medicaid beneficiaries’ personal identifying information (“PII”) and then used it to file fraudulent claims and to support the claims; instructed employees to create fictitious patient files and clinical service notes in the beneficiaries’ names; and submitted the fictitious medical records and made false statements to auditors to cover up the alleged fraud. The indictment also alleges that the Defendant engaged in money laundering and used some of the fraudulent proceeds to purchase beneficiaries’ PII.
September 19, 2023 OIG Listserv Release
U.S. Settles False Claims Act Lawsuit Against Cardiologist And His Medical Practice For Paying Millions In Kickbacks For Referrals
NY. Defendants are a cardiologist and his cardiology practice. They settled allegations related to kickbacks they paid for referrals to primary care and other physicians when the Defendants paid inflated office rents in return for referrals to the Defendant-practice, the Defendant-cardiologist and their independent contractor-cardiologists and testing operations. Additional allegations include payment of fees to the Defendants’ independent contractor-cardiologists for administering and supervising PET and SPECT scans that the independent contractors did not perform, and for which the independent contractors received payment based on the number of tests and procedures referred.
In addition to commitment to return funds to government programs, the Defendant cardiologist is indefinitely barred from working for any entity that bills federal health care programs; agreed to a voluntary exclusion agreement with HHS-OIG that prohibited him from participating in federal health care programs for five years; and Defendant cardiologist is required to relinquish his ownership in the Defendant-cardiology practice by the end of 2023, with a portion of the proceeds of the sale to be paid to the U.S.
Harris Beach has a more detailed description of this matter that can be accessed at this link: https://www.harrisbeach.com/insights/u-s-reaches-false-claims-act-settlement-after-cardiologist-pays-millions-in-kickbacks-for-referrals/
Ohio coding consultant agrees to settle allegations regarding neurostimulator devices
TX. Defendant is a medical information technology and coding consultant who provided services to doctors, chiropractors and other medical professionals. She allegedly assisted those providers to bill Medicare fraudulently by pointing them to use billing codes designed for the surgical implantation of neurostimulator electrodes, which were services not performed by those she assisted. Instead, patients received devices used for electro-acupuncture, which is not covered as it is not the invasive surgical procedure covered by the codes she recommended.
Former Fresno Sleep Clinic Owner Pleads Guilty to Submitting over $1 Million in Fraudulent Claims for Sleep Studies to Medicare
CA. Defendant is the alleged owner of sleep clinics that performed diagnostic sleep studies on patients to identify disorders. Defendant allegedly submitted claims for sleep studies that were not actually performed on patients and claims that also falsely stated the patients had been referred for the sleep studies by physicians with whom the Defendant previously worked, as a way to meet Medicare’s referral requirements.
Pharmacy Operators and Pharmacist Charged with $33 Million Health Care Fraud, Wire Fraud, and Kickback Conspiracy
NJ. Defendants are pharmacy executives and a pharmacist who allegedly worked with marketing companies to generate medically unnecessary prescriptions through a telemarketing and telemedicine scheme and some Defendants agreed to pay kickbacks to marketing companies in return for the marketing companies referring prescriptions for expensive medications to the pharmacies. Medicare and TRICARE beneficiaries were allegedly targeted for expensive drugs and were contacted by telephone and pressured to agree to the drugs. The marketing companies allegedly transmitted recordings of the telephone calls, together with pre-marked prescription pads for particular drugs, to telemedicine companies. Marketers allegedly paid telemedicine companies kickbacks for every beneficiary referred for a prescription and the telemedicine companies paid doctors to approve the prescriptions, which were then directed to the Defendants’ pharmacies, which paid a portion of each reimbursement to the marketing companies as a kickback.
United States Files False Claims Act Complaint Against Bournewood Health Systems and First Psychiatric Planners
MA. Defendants allegedly paid kickbacks in the form of sober housing to induce substance recovery patients to choose the Defendants over other treatment facilities. It is alleged the kickback inducements were paid to sustain and grow their daily patient census and increase reimbursement from insurers for the provision of partial hospital program treatment services. Allegations also include that the Defendants sent patients to certain sober homes to support their revenues even though Defendants knew that some of the sober homes were unsafe and threatened patients’ sobriety; patient complaints to Defendants included concerns regarding sexual solicitation and harassment, drug overdoses, prescription medication theft, bed bugs and overcrowding.
September 18, 2023 OIG Listserv Release
Toxicology Lab Owner Pleads Guilty to Health Care Fraud and Tax Evasion; Lab Officer Pleads Guilty to Health Care Fraud
KY. Defendant-owner of a toxicology lab pled guilty to performing urine drug testing services and billing Medicare and Medicaid when he knew the tests were medically unnecessary and not covered because the urine drug tests were ordered by courts for use in judicial proceedings.
Defendant-Chief Operating Officer and Compliance Officer of a toxicology lab allegedly recruited a referral source to the Defendant’s lab for the uncovered court-ordered urine drug testing. She allegedly also solicited urine drug testing from non-medical substance abuse recovery programs or homeless shelters and induced the facilities to send more tests to Defendant’s lab by putting facility staff on the lab’s payroll and compensating them based on the number of urine drug tests sent to the lab.
Physical Therapist Convicted for Paying Health Care Kickbacks
FL. Defendant owned a home health services provider providing services to Medicare beneficiaries. She allegedly hired multiple marketers and paid them kickbacks in exchange for patient referrals. Services provided as a result of the referrals were billed to Medicare. She was convicted of conspiracy to defraud the United States and paying health care kickbacks and two counts of paying kickbacks in connection with a federal health care program.
September 15, 2023 OIG Listserv Release
Laboratory Owner Sentenced to 36 Months in Federal Prison for Healthcare Kickback Scheme
LA. Defendant owned a clinical lab and allegedly worked with a sales representative who was excluded from Medicare. The sales representative continued to refer doctors’ orders and specimens for testing at the Defendant’s lab in exchange for kickbacks paid to the excluded sales representative. Additional allegations involve the Defendant paying kickbacks to another sales representative for services that were ultimately billed to Medicare and Medicaid.
Former Missouri Doctor Sentenced to 22 Months in Prison for Defrauding Medicare, Medicaid
MO. Defendant physician allegedly falsely used his father’s name (Defendant’s father is also a physician) to bill Medicare and Medicaid for medical services during a period in which the Defendant’s MO medical license was suspended. The father and son agreed that the son would use the father’s unique billing provider number to bill for services performed by the Defendant, on referrals to other health care providers, and on orders for DME. This falsely claimed that the father had performed the service or ordered equipment or services. When the father received Medicare and Medicaid payments purportedly performed by him, the father would transfer the funds to the Defendant. The Defendant pled guilty to two counts of making false statements related to health care matters and his medical license was revoked. The father died in 2021.
September 14, 2023 OIG Listserv Release
Dermatology Management Company to Pay $8.9 Million to Resolve Self-Reported False Claims Act Liability
TX. The settling entity (“Entity”) manages and operates dermatology practices, surgical centers, and pathology labs. The Entity self-reported potential violations of the STARK Law and the AKS and entered into a civil settlement agreement and collaborated with the government to resolve allegations of violations of the FCA. It disclosed that it discovered credible evidence suggesting former senior managers offered or agreed to increase the purchase price of 11 acquired dermatology practices in exchange for an agreement by the provider at the practice to refer services to the Entity’s affiliated entities following the acquisition. Claims for certain of those referred services were later submitted to Medicare for payment. The subject transactions did not fit within any STARK or AKS exceptions.
At the time of the self-report, the government was not aware of the conducted being reported.
September 13, 2023 OIG Listserv Release
Frederick Medical Practice Pays the United States More Than $850,000 to Resolve Claims that it Inappropriately Billed for Medical Services
MD. The Defendant, a former medical practice, settled allegations that it submitted inappropriate claims for evaluation and management (“E&M”) services when it used a code modifier that is only appropriate when there is a separate and distinct E&M service on the same day as a procedure or other service being performed on a patient. The settlement also addressed allegations that the Defendant improperly submitted claims under billing numbers of the patient’s physician rather than the non-physician provider who treated the patient in the physician’s temporary absence.
September 12, 2023 OIG Listserv Release
Colorado Psychiatry Practice and Owner Agree to Pay $1.9 Million to Settle Allegations of Fraudulent Billing
CO. The Defendants, a psychiatry practice and its owner, allegedly violated the FCA by knowingly double-billing time to increase Medicare and Medicaid payments. The allegations involve payments for both evaluation and management services and for psychotherapy services provided during the same patient visit. Medicare and Medicaid billing requirements require that the services must be separately identifiable and the time spent providing one service cannot be counted as time in billing for the other service.
The matter was initiated through a Qui Tam action.
September 7, 2023 OIG Listserv Release
Hearing Aid Dealer Sentenced to 4 Years in Prison for Health Care Fraud
CT. The Defendant, as a participating provider in CT’s Medicaid program, allegedly submitted false and fraudulent claims for services and equipment that were not medically necessary or not provided. The Defendant allegedly knew that employees performing hearing tests did not have the required professional permits and they submitted paperwork for hearing tests that did not occur or were not medically necessary. Additional allegations involve the Defendant’s use of paid, third-party patient recruiters in violation of the Defendant’s CT Medicaid provider agreement.
September 6, 2023 OIG Listserv Release
Physician Convicted In $9.5 Million Health Care Fraud Conspiracy To Accept Kickbacks
TN. The Defendant, a physician enrolled as a Medicare provider, allegedly worked with telemedicine companies to obtain access to Medicare and Medicaid patients’ information from around the country and then fraudulently ordered thousands of cancer genetic tests despite never actually meeting the patients in person or via telemedicine, and never reviewing their test results. It was alleged that in exchange for providing signed orders for genetic testing, the Defendant was paid kickbacks by co-conspirator telemedicine companies. The telemedicine companies allegedly were paid by co-conspirator marketing companies that targeted Medicare and Medicaid patients through various marketing activities where they convinced patients to provide their genetic material via a mouth swab kit. The marketers provided the swab kits to a lab in TN for lab cancer genetic testing in exchange for kickbacks paid by the lab. The lab billed Medicare and Medicaid.
September 1, 2023 OIG Listserv Release
State v. Jennifer Harding
NH. The Defendants allegedly made wholly or partially false or fraudulent records as documentation of costs or expenses claimed for reimbursement for Medicaid covered services and knowingly caused false or fraudulent claims for payment for Medicaid-covered services with the intent to defraud.
Attorney General’s Office charges five with $9.5M in Medicaid fraud – Alleges owners and management of MN Professional PCA agency billed for services not performed, services not supervised by qualified professional
MN. The five Defendants, owners, managers and a biller of a personal care assistant services agency (PCA), allegedly billed for services not provided; billed for services to recipients that caregivers did not recognize or provide services to; billed for services that were unsupervised by RNs, mental health professionals or other individuals required by MN law; concealed the proceeds of the crime through a check-cashing scheme, which caused some caregiver’s W-2s to be inflated; allegedly listed spouses as salaried board members or consultants whose salaries were paid into the Defendants’ accounts; and recruited clients and personal care assistants to participate in the scheme.
Watermark Retirement Communities to Pay $4.25 Million for Allegedly Receiving Kickback in Violation of the False Claims Act
AZ, CT, DE, FL. The Defendant, a senior living community operator, allegedly violated the FCA by soliciting and receiving a kickback from a nationwide (unnamed) home health agency (HHA) operator. The HHA operator allegedly purchased two of the Defendant’s HHAs to induce referrals of Medicare beneficiaries into the Defendant’s communities. The Defendant allegedly caused the HHA operator to submit false claims for payments to Medicare for services provided to Medicare beneficiaries referred as a result of the kickback transaction.
The matter was initiated through a Qui Tam action.
CORPORATE INTEGRITY AND INTEGRITY AGREEMENTS – NEW CASES
September 29, 2023 – effective date: Reported September 30, 2023
The Cigna Group
* 5 year Corporate Integrity Agreement
* Covered Conduct: Allegations that Cigna violated the FCA by submitting and failing to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees in order to increase its payments from Medicare. Among other things, Cigna’s retrospective chart review process identified unsubstantiated diagnosis codes reported by Cigna providers which were then submitted by Cigna to CMS for payment. The unsubstantiated diagnosis codes identified as a result of the chart review process should have been reported to CMS, which would have resulted in Cigna reimbursing CMS.
August 29, 2023 – effective date: Reported September 11, 2023
Charles T. Nevels, M.D.
* 3 year Integrity Agreement
* Covered Conduct: 2022 Complaint alleged that Dr. Nevels, a psychiatrist who worked in several nursing homes, caused the submission to Medicare and Medicaid of false and fraudulent claims for a prescription drug he ordered for treatment of conditions that the drug was not found to be safe and effective to treat, and that the pharmaceutical company that manufactured the drug paid Dr. Nevels for speeches that allegedly had little value and were intended to compensate the doctor for prescribing the drug.
August 10, 2023 – effective date; Reported September 1, 2023
* 5 year CIA
* Covered Conduct is related to allegations of overbilling Medicare and Medicare Advantage Plans for oxygen equipment that was leased and lease payments that exceeded maximums, as well as charging patients’ copayments when rental fees should have ceased. (See August 30, 2023 OIG Listserv Release Harris Beach Summary.)
AG = Attorney General
AKS = Anti-Kickback Statute
CIA = Corporate Integrity Agreement
CMP = Civil Monetary Penalties
CMS = Centers for Medicare and Medicaid Services
CPT = Current Procedural Terminology Codes
DME = Durable Medical Equipment
E&M = Evaluation & Management services
FEHBP = Federal Employees Health Benefits Program
FMV = Fair Market Value
DOJ = United States Department of Justice
FCA = False Claims Act
FWA = Fraud, Waste & Abuse
HHS = Department of Health and Human Services
HRSA = HHS’s Health Resources and Services Administration
IA = Integrity Agreement
LTC = Long Term Care (usually facilities)
MCO = Managed Care Organization (typically Medicaid)
MFCU = Medicaid Fraud Control Unit
MSO = Management Services Organization
NH = Nursing Home
NPI = National Provider Identifier
OIG = Office of Inspector General in HHS
OT = Occupational Therapy
PBM = Pharmacy Benefit Managers
PT = Physical Therapy
SNF = Skilled Nursing Facility
 Not included in the summaries are prosecutions related solely to drug diversion and inappropriate prescriptions, patient fiscal or physical abuse, or non-health care related matters such as money laundering as a specific allegation that may be in conjunction with an alleged fraud or misuse of COVID-19 relief funds. The summaries also do not include enforcement announcements of arrests with no report of an indictment or civil complaint or announcements related to sentencing following a conviction or guilty plea.
 The summaries should be considered to reflect allegations and not necessarily be considered to be statements of fact.