The following is a summary of the 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.
The summaries reflect areas of OIG’s and individual states’ current and recent enforcement activity. Knowing where regulators’ attention is focused can help healthcare providers identify areas of focus for compliance and risk assessment activities. Although not all the enforcement actions may be relevant to any one provider’s healthcare business, there may be some summaries that could be used as examples in compliance program education (“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:
- SNF settled FCA billing allegations for services provided by a hospice, while patients were admitted to hospice care and services were covered by hospice benefits under Medicare.
- A New York physician-owned medical practice, allegedly submitted claims for services by physicians when a physician assistant actually provided the service without meeting Medicare’s incident-to billing requirements (i.e., physician being physically present in the office and immediately available to furnish assistance and direction throughout the procedure when services are provided by a non-physician practitioner.)
- Two for-profit SNFs and five employees allegedly falsified patient medical assessments (MDS) and case mix assessments to obtain higher reimbursement. Employee time records are also allegedly falsified to show employees working when not working and to address minimum staffing requirements on SNFs.
- Telemedicine fraud allegations are involved in DME and pharmacy fraud matters.
- New York Attorney General indicted a physician who allegedly ran a kickback scheme through his diagnostic radiology center where he bribed other physicians for patient referrals, subjected some of the patients to invasive radiological tests and procedures that they did not need, and then caused false claims to be submitted to Medicaid for the tests.
August 12, 2022 OIG News Release
Stockton Doctor and Medical Practice Agree to Pay Nearly $2 Million to Resolve Allegations of Health Care Fraud
CA. The Defendant, physician and his medical corporation, agreed to settle allegations they violated the FCA and AKS by submitting false claims to Medicare for surgically implanted neurostimulators and paying kickbacks to sales marketers. Allegedly the required surgery was not performed and the implants not implanted, but rather the Defendants taped a disposable electroacupuncture device to patients’ ears which procedure is not covered by Medicare. The marketing company was paid a percentage of the reimbursements received, in return for the marketing company arranging for and recommending patients for the procedure that taped the disposable device to the patients’ ears.
The Defendants also agreed to enter into an Integrity Agreement with OIG.
August 10, 2022 OIG News Release
U.S. Attorney’s Office Recovers Over $5.5 Million in Civil False Claims Settlement with American Senior Communities
IN. The Defendant, provider of SNF and long-term care services, agreed to settle allegations that it charged Medicare directly for various therapy services provided to beneficiaries who had been placed on hospice care. Those services should already have been provided under hospice coverage.
The matter was initiated through a Qui Tam complaint.
August 9, 2022 OIG News Release
Five Individuals and Two Nursing Facilities Indicted on Charges of Conspiracy to Defraud the United States and Health Care Fraud
PA. The Defendants, 5 individuals and 2 for-profit SNFs, allegedly conspired to commit healthcare fraud when they knowingly provided or directed others to provide false staffing records to PA regulators during federally mandated surveys. Some of the Defendants allegedly obstructed and interfered with CMS’s functions and PA regulators’ federally mandated surveys. Additional allegations include:
- false statements in resident assessments (Minimum Data Set [MDS]) to obtain increased Medicare and Medicaid reimbursements;
- falsifying staffing records provided to PA surveyors to include names to records of nursing staff who were not present to provide direct care to patients;
- directing staff to “clock-in” for shifts not worked to falsify time cards;
- falsifying staffing records to support allegations of sufficient staffing;
- changing residents’ assessments to ensure the case mix index supported a higher reimbursement;
- changing residents’ MDS assessment to justify changing residents’ Activities of Daily Living (ADL) scores to reflect the results of interviews that never occurred; and
- entering inaccurate responses to resident questionnaires to falsely inflate depression scores.
The falsified staffing records were allegedly provided to PA surveyors in order to show compliance with Medicare’s and Medicaid’s conditions of participation, including sufficient nursing staff requirements and that the SNFs were providing services in compliance with all Federal, State and local laws, regulations and requirements. It is also alleged that the false statements were made with the intent to impede, obstruct and influence the investigation and proper administration of a matter within CMS’s jurisdiction.
Georgia nurse practitioner sentenced to prison, ordered to pay more than $1.6 million in restitution in complex telemedicine fraud scheme – Fraudulent orders included a knee brace for a leg amputee
GA. The Defendant, nurse practitioner, allegedly facilitated orders for orthotic braces that generated fraudulent or excessive charges to Medicare. Co-conspirators captured identities of senior citizens identified through a telemarketing scheme to create the “leads” used. The Defendant allegedly signed her name to fake medical records which falsely claimed she examined patients and in exchange for money, created orders for orthotic braces and other DME for patients she never met or spoke with. The fraudulent orders were sold to companies that submitted for Medicare reimbursement.
August 5, 2022 OIG News Release
Western Maryland Physician and Pain Management Practice Group Agree to Pay $980,000 to Settle Federal False Claims Act Allegations of Billing for Medically Unnecessary Urine Drug Tests
MD. The Defendants, physician, his son, and their pain management group, agreed to settle allegations that the Defendants billed for presumptive and definitive Urinary Drug Tests (“UDTs”) which were ordered not based on individualized determination of medical necessity for each patient, but instead were blanket orders that tested all patients for the same drug classes. Unexpected positive or negative results were allegedly ignored by the Defendants, or not checked at all and the Defendant’s providers allegedly continued to prescribe opioids and other controlled substances despite obvious warning signs the patients were abusing drugs.
Grand Jury Charges Eight People In Spring Hill-Based Crestar Labs, LLC Medicare & Medicaid Fraud Conspiracy – Fraud Conspiracy Alleges Over $150 Million in Fraudulent Billing
TN. The Defendants allegedly entered into sham contracts and paid kickbacks in exchange for genetic testing and urine analysis samples which included targeting and recruiting elderly federal healthcare program beneficiaries to obtain their genetic material for conducting genetic tests. Marketers who were not healthcare professionals obtained swabs for the mouths of patients at NHs, senior health fairs and elsewhere. The tests were then purportedly approved by telemedicine doctors who did not engage in the treatment of patients and often did not speak with patients for whom the tests were ordered. Frequently the patients or their treating physician never received the results of the tests. Kickbacks and bribes were allegedly paid by Defendants in exchange for the doctor’s orders and tests without regard to medical necessity.
Money laundering allegations are outside the scope of this summary.
August 4, 2022 OIG News Release
Attorney General James Announces Indictment of Long Island Physician for Defrauding Medicaid and Subjecting Patients to Invasive and Medically Unnecessary Testing – Payam Toobian, M.D., Allegedly Paid Kickbacks to Physicians for Patient Referrals and Subjected Medicaid Patients to Unnecessary Radiological Tests
NY. The Defendant, physician through his diagnostic radiology center, allegedly ran a kickback scheme where he bribed other physicians for patient referrals, subjected some of the patients to tests and procedures that they did not need, and then caused false claims to be submitted to Medicaid for the tests. Allegedly payments were made to bribe-referring physicians through cash, gift cards and checks. The Defendant allegedly directed his employees to add additional, unordered radiological procedures to orders submitted by referring physicians to increase the Medicaid payments. It is also alleged that the medically unnecessary tests were performed without the direction, consent, or approval of the referring physicians responsible for the underlying care of the patients. Some of the alleged medically unnecessary tests included MRIs of the brain, cervical spine, and lumbar spine, all with contract which exposed patients to unnecessary and invasive injections which were then billed to Medicaid.
Texas pharmacy owner indicted in conspiracy that netted more than $10 million in payments for expensive drugs – indictment alleges kickbacks paid for prescriptions
GA. The Defendant, owner of TX pharmacy, and co-conspirators allegedly offered and paid bribes to prescribing physicians in exchange for prescriptions for expensive drugs, including prescriptions to patients in GA whose information was obtained through the fraudulent use of a telemedicine call center. The pharmacy allegedly filled prescriptions, typically for topical creams and gels, sending the unnecessary drugs to the named patients and then received reimbursement from PBMs.
Durable Medical Equipment Company Owner Pleads Guilty to Health Care Fraud
FL. The Defendant, owner of a DME supplier, pled guilty to submitting fraudulent healthcare DME claims to Medicare for equipment that was never provided and that Medicare beneficiaries never requested.
August 3, 2022 OIG News Release
Watertown Medical Practice to Pay $850,000 to Resolve False Claims Act Allegations – North Country Neurology, P.C. Admitted that it Submitted Hundreds of Claims to Medicare for Botox that had Been Paid for by Other Insurers and that it Billed at the Higher Physician’s Rate for Services Rendered by a Physician Assistant
NY. The Defendant, physician-owned medical practice, allegedly submitted claims for services by physicians as the rendering provider, when a physician assistant actually provided the service without meeting Medicare’s incident-to billing requirements (i.e., physician being physically present in the office and immediately available to furnish assistance and direction throughout the procedure when services are provided by a non-physician practitioner (NPP)). The Defendant admitted that it knew or should have known the requirements of incident-to billing that is allowed under Medicare for services provided by NPPs. The Defendant’s billing company informed the practice owner of separate incident-to billing violations several years earlier. Additionally, the Defendant provided Botox treatments to Medicare patients where the Botox was purchased by non-Medicare patients and shipped to the Defendant practice.
The Defendant acknowledged that it had an insufficient compliance program that was not suited to identify fraud, waste, and abuse and in response to the US investigation, the Defendant voluntarily retained third-party compliance and practice-management consulting services to develop and implement practices and procedures to ensure compliance with federal rules and regulations going forward.
New Jersey Pharmacy Admits Illegal Distribution of Prescription Opioids and Kickback Scheme and Agrees to Criminal and Civil Penalties
NJ. The Defendant, pharmacy, admitted to illegally distributing prescription opioids and giving kickbacks to healthcare providers. The Defendant dispensed drugs knowing the prescriptions were not written for a legitimate medical purpose. The Defendant admitted it offered kickbacks to healthcare providers and pharmaceutical company sales representatives in violation of the federal AKS in the form of lunches, dinner, and happy hours to induce them to send prescriptions to the Defendant.
The violations related to the Controlled Substances Act are outside the scope of this summary.
August 2, 2022 OIG News Release
Pharmacy owner and accountant indicted again in $150M scam
TX. The Defendants, CEO of a pharmacy and its accountant who had ownership interests in several pharmacies nationally, allegedly used a mass marketing scheme to target individuals over age 55 using telemarketing and mail. The alleged scheme involved the purchase of patient data that pharmacy employees used to submit test claims to patient insurance plans to determine insurance coverage. Once confirmed, the employees sent prescription fax requests to doctors’ offices on behalf of patients without the patients’ knowledge or consent (some patients were deceased). Employees then contacted patients reporting that their doctor approved prescriptions for them and they would receive the medications at no cost, regardless of applicable copayments. The pharmacy did not collect any copays and when audited is alleged to have provided false proof of the copay collection.
Woman Admits Committing Health Care Fraud While Awaiting Sentencing in Another Health Care Fraud Case
CT. The Defendant, provider of applied behavior analysis services (“ABAS”), pled guilty to submitting and causing to be submitted fraudulent claims to Medicaid for services she did not provide and for inflating the number of hours for certain claims when ABAS were provided. The Defendant allegedly submitted false claims using a former employee’s name and performing provider numbers. After CT Medicaid terminated her agency as a provider, the Defendant made false statements and submitted altered documents to Medicaid to try to rescind the termination and receive payment for previously submitted claims. While she was awaiting sentencing, the Defendant allegedly was the silent partner in a different ABAS agency where, as the person responsible for billing Medicaid, managing payroll and recruiting and screening employees, she used the business partner’s email and online accounts to operate the company where she allegedly billed Medicaid for services not rendered.
If you have any questions on any of the summaries, or if you would like assistance in developing a compliance plan (including compliance training materials) to address any OIG Enforcement activity or other compliance or risk management matter, please contact Matthew Babcock at Harris Beach, PLLC at firstname.lastname@example.org or (518) 225-4731.
- 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
- DOJ = United States Department of Justice
- E&M = Evaluation & Management services
- FCA = False Claims Act
- FEHBP = Federal Employees Health Benefits Program
- FMV = Fair Market Value
- FWA = Fraud, Waste & Abuse
- HHS = Department of Health and Human Services
- IA = Integrity Agreement
- LTC = Long Term Care (usually facilities)
- MCO = Managed Care Organization (typically Medicaid)
- MFCU = Medicaid Fraud Control Unit
- MSO = Management Services Organization
- OIG = Office of Inspector General in HHS
- OT = Occupational Therapy
- PBM = Pharmacy Benefit Managers
- PT = Physical Therapy
- SNF = Skilled Nursing Facility