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.[1] 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.[2] 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:

  1. Pharmacy holding company Chief Compliance Officer sentenced for his part in a conspiracy to commit health care fraud for filling medically unnecessary prescriptions that patients did not need or want and for attempting to conceal the scheme. (November 17, 2023.)
  2. Genesis Reference Laboratories LLC settled allegations that it knew referrals it received for lab tests were the result of kickbacks paid by Genesis’ marketers to health care providers who made the referrals. The payments to the health care providers were attempted to be disguised as investment returns paid to health care providers for MSOs, but the payments were actually payments for induced referrals. Genesis agreed to cooperate with DOJ’s investigations of and litigation against other participants in the alleged scheme. (November 3, 2023.)

November 30, 2023 OIG Listserv Release

Sleep disorder medical practice with clinics in California and Washington resolves allegations it overbilled government medical programs

WA. Defendants settled allegations that they submitted false claims to Medicare and Medicaid when they submitted claims that: identified a physician as the rendering provider in order to bill at a higher rate than would have been received if services were billed based on the actual service provider, who was a lower-level provider; identified a physician as the rendering provider when services were actually performed by employees not qualified to perform the service so that the Defendants received payment for non-covered services; and involved sleep studies performed by individuals without the required credentials. 

November 28, 2023 OIG Listserv Release

Telemedicine Nurse Practitioner Pleads Guilty to $7.8 Million Durable Medical Equipment Fraud Scheme

MA. Defendant, a Virginia-based nurse practitioner, pled guilty to allegations that she worked with a telemedicine company to sign orders for medically unnecessary DME. The orders signed by the Defendant allegedly were pre-populated based on telemarketing calls made to Medicare beneficiaries that the Defendant never had contact with herself and had no medical relationship with the beneficiaries. It was alleged the Defendant signed the orders without reading them. Once signed, it was alleged the telemarketing companies sold the orders to DME suppliers and labs that submitted claims to Medicare.

November 24, 2023 OIG Listserv Release

Attorney General James Announces Guilty Verdict of Physician Who Subjected Patients to Unnecessary and Invasive Tests – Payam Toobian, M.D. Paid Kickbacks to Physicians for Patient Referrals and Defrauded Medicaid by Subjecting Patients to Unnecessary Radiological Tests

NY. Defendant, a physician, allegedly used gift cards and cash to induce two physicians to refer patients, and Defendant directed his employees to add additional unordered radiological procedures to orders submitted by referring physicians to increase the amount of money received from Medicaid. It was alleged that the Defendant subjected patients to medically unnecessary and often invasive radiological testing without the direction, consent, or approval of the referring physicians responsible for the patients’ underlying care.

AG HENRY CONTINUES TO HOLD MEDICAID FRAUDSTERS ACCOUNTABLE WITH RECENT ARRESTS, CONVICTIONS INVOLVING OVER $800K IN FALSE BILLING

PA. The PA Attorney General announced her prosecution of six cases of alleged Medicaid fraud resulting from home health care workers overbilling for services not provided, or billing for alleged services provided to multiple patients at the same time. One case involved a personal care attendant and support service professional employed by at least nine separate care agencies in which the personal care attendant submitted false time records that reflected services provided when the Defendant was at home or tending to personal tasks and, in some cases, reflected work well over 24 hours within a single 24-hour day. A second case involved allegations that a licensed practical nurse and a personal care attendant billed for services never performed when in some cases the Defendants were reportedly treating multiple patients at the same time, or were out of PA or the country at the time services were allegedly provided. A third case involved allegations that a personal care attendant, employed by three Medical Assistance agencies, reported overlapping services at each of the agencies and was paid for services that were never provided. 

November 20, 2023 OIG Listserv Release

Pharmacy Owners and Doctor Convicted for $145M Health Care Fraud, Money Laundering, and Tax Evasion Scheme

TX. Defendants allegedly participated in a conspiracy to bribe the Defendant (doctor) and other doctors to prescribe medically unnecessary compound creams to injured federal workers. The bribes and kickbacks were paid in exchange for the unnecessary prescriptions.

Outside the scope of this summary are the money laundering allegations.

November 17, 2023 OIG Listserv Release

Caregiver Found Guilty of Defrauding Medicaid of Roughly $45K by Billing for Caretaking Services in New Jersey while Working at Her Teaching Job in Michigan

NJ. Defendant allegedly was paid to provide 56 hours of care per week to her ex-boyfriend in NJ, but she was working in a MI teaching position on the dates that she was billing for the services in NJ. While teaching in MI, the Defendant allegedly provided timesheets for reimbursement for care that she never provided in NJ.

Operator of durable medical equipment companies admits role in $11 million dollar kickback scheme

GA. Defendant, owner of two DME companies, pled guilty to allegations that they obtained access to Medicare beneficiaries by paying, on a weekly basis, kickbacks in exchange for signed doctors’ orders for DME. The payments allegedly were disguised as marketing expenses and the Defendant entered into sham contracts and generating or causing the generation of fraudulent invoices.

Chief Compliance Officer Sentenced for $50M Medicare Fraud Scheme

FL. Defendant, chief compliance officer for a pharmacy holding company that operated a number of pharmacies in various states, allegedly worked with co-conspirators to fraudulently bill Medicare for dispensing lidocaine and diabetic testing supplies that Medicaid beneficiaries did not need or want. It was alleged that the Defendant and the co-conspirators secured prescriptions and refills for medically unnecessary prescriptions in violation of Medicare’s rules and regulations, as well as PBMs’ rules and regulations. The Defendant and co-conspirators took several steps to conceal their scheme, including enrolling their mail-order pharmacies as brick-and-mortar retail pharmacies to evade more rigorous oversight; shipping prescription refills for high-reimbursing medications and supplies without patient consent; concealing the ownership of the holding company and its pharmacies; and transferring patients between the pharmacies without patient consent. The Defendant was sentenced to over four years in prison and ordered to pay $21.7 million in restitution.

November 16, 2023 OIG Listserv Release

California Skilled Nursing Facilities, Owner and Management Company Agree to $45.6 Million Consent Judgement to Settle Allegations of Kickbacks to Referring Physicians

CA. Defendant, owner of a management company and six SNFs, allegedly entered into medical directorship agreements with physicians whose real purpose was to pay kickbacks to induce the physicians to refer patients to the six SNFs. Physicians were allegedly hired who promised in advance to refer a large number of patients to the SNFs and the physicians were paid in proportion to the number of their expected referrals. Physicians were allegedly terminated if they did not refer enough patients.

The matter was initiated through a Qui Tam action.

The Defendants entered into a 5-year CIA with OIG that was effective on November 9, 2023.

November 15, 2023 OIG Listserv Release

Three Men Sentenced for $54M Fraudulent Prescriptions Scheme

FL. Defendants worked for a pharmacy that specialized in compounded prescription drugs. The Defendants allegedly engaged in “test billing” to develop the most expensive combination of compounded drugs to maximize TRICARE reimbursement, and they targeted physicians treating TRICARE beneficiaries and paid bribes and kickbacks to physicians and sales people to encourage the referral of prescriptions to their pharmacy. Additionally, it is alleged the pharmacy’s employees used “blanket letters of authorization” that allowed the pharmacy to modify the prescription components to make them more profitable. The incentives paid to seek prescriptions for the most expensive compounded drugs possible included pain and scar creams.

November 14, 2023 OIG Listserv Release

Florida business owners plead guilty for their role in durable medical equipment fraud scheme

FL. Defendants pled guilty to conspiracy for their alleged roles in buying and selling fake doctors’ orders used to obtain fraudulent Medicare payments. The Defendants allegedly owned and operated Laboratory Marketing Services (“LMS”), which was in the business of receiving kickback payments in exchange for patient “leads” consisting of billable Medicare beneficiaries’ personal identifying information. They also allegedly received bribes from DME companies in exchange for leads consisting of Medicare beneficiary’s names, Medicare numbers, diagnoses, pain levels and primary care physicians. Additional allegations include that orders contained forged signatures of purported approvals of physicians or other health care providers whose names and professional identifying information were used without their authorization or knowledge. 

Therapist’s ex-wife sent to prison for defrauding Medicaid and stealing patient information

TX. Defendant, former office manager of her ex-husband, who is a therapist, allegedly used her ex-husband’s provider number to submit fraudulent claims to Medicaid for counseling services that were never provided. The ex-husband is alleged to not have known of her activities. The Defendant also allegedly used her employment at a pediatrician’s office to obtain patient information and submit fraudulent claims to Medicaid under her ex-husband’s provider number.

November 13, 2023 OIG Listserv Release

Recovery Connections Centers of America social worker admits to leadership role in scheme to bill insurers for more full client sessions than could be provided in a 24-hour day

RI. Defendant, clinical social worker and supervisor at Recovery Connections Centers of America, Inc., admitted that she and others working under her direction, routinely submitted false and fraudulent claims for psychotherapy and counseling  that did not occur for the length of time billed and for consistently billing for more patients than was possible for the staff to have seen during office hours. The Defendant allegedly directed counselors and others to record in their notes they were providing 45-minute counseling sessions, but without listing an AM or PM start time.  She allegedly instructed counselors to copy and paste the last visit’s note into each entry to make the bill look complete.

November 9, 2023 OIG Listserv Release

Jury Convicts Hospice Owner for Defrauding Medicare

LA. The Defendant owned and oversaw day-to-day operations of a hospice. He allegedly overbilled Medicare for hospice patients for general inpatient services, which was higher than the billing for the appropriate level of care and many of the patients were not eligible for hospice care; billed for physician services under a CPT code for the services which were medically unnecessary or already included in the hospice daily rate; billed for history and physical (H&P) services when no H&P was performed by the Defendant’s hospice; and billed for home visits under a physician’s name when they were performed by a nurse practitioner, or the patients were not hospice eligible, or the services were already included in the daily hospice rate.  

November 8, 2023 OIG Listserv Release

Former San Antonio Health Services Employee Sentenced for Receiving Kickbacks

TX. The Defendant, a home health employee, allegedly paid and received kickbacks in return for sending prescriptions to specific pharmacies. She also allegedly referred patients to other home health agencies in return for a kickback payment. Her co-defendant allegedly owned a medical marketing business and conspired with the Defendant to increase prescription volumes at specific pharmacies.

November 7, 2023 OIG Listserv Release

Second Owner of Fresno Sleep Clinic Pleads Guilty to Submitting over $1.5 Million in Fraudulent Claims to Medicare and Medi-Cal for Sleep Studies

CA. The Defendant, co-owner and co-operator of sleep clinics, submitted claims to Medicare and Medi-Cal for sleep studies that were not actually performed on patients and for submitting claims that falsely stated patients had been referred for sleep studies by physicians with whom the Defendant previously worked in order to satisfy Medicare and Medi-Cal’s physician referral requirement for the studies.

Snellville Doctor Pays $225,000 to Resolve Allegations for Improper Billing

GA. The Defendant, physician, is alleged to have knowingly submitted false claims to federal health care programs for office visits that were not as complex or lengthy as claimed (upcoding) and for submitting claims for certain office visits as if she personally provided the service when she was travelling out of the country at the time the services were allegedly performed.

This matter was initiated through a Qui Tam action. 

November 3, 2023 OIG Listserv Release

Four Toledo Area Individuals Sentenced for Healthcare Fraud Scheme

OH. The Defendants allegedly used a pharmaceutical marketing company specializing in compounded pain and scar creams to recruit and pay individuals to obtain prescriptions for the creams, which were submitted to a pharmacy that filled the prescriptions and billed insurance companies. The individual who recruited co-workers to obtain the prescriptions received a portion of the proceeds for every patient recruited. It is alleged that patients were paid to get the prescriptions and the prescriptions were often medically unnecessary. The doctor who allegedly wrote the prescriptions for the creams pled guilty to health care fraud.

Outside the scope of this summary are allegations related to false statements made in an application to the IRS for a public charity and on tax returns.

Owner of Indian Marketing Company Admits Role in $11.5 Million Health Care Fraud and Kickback Scheme

NJ. The Defendant is the owner of a marketing company located in India. The Defendant and his Indian company identified Medicare beneficiaries to target for orthotic braces and cancer genetic tests (CGx). Employees of the company called beneficiaries and pressured them to agree to accept orthotic braces and/or CGx regardless of medical necessity. The Defendant and his company allegedly paid kickbacks to telemedicine companies to obtain doctor’s orders for the braces and tests and the Defendant steered the doctor’s orders to orthotic brace suppliers and testing labs located in the U.S., with which the Defendant and his company had additional kickback arrangements. The suppliers and labs submitted claims for reimbursement on those claims and then sent a portion of the proceeds to the Defendant and his company.

Florida Laboratory Agrees to Pay Over $1.1 Million to Settle Kickback Allegations

FL. The Defendant is a clinical laboratory, Genesis Reference Laboratories LLC, which agreed to settle allegations that the Defendant paid marketing companies to arrange for, and recommend that, health care providers in MO and TX order Genesis’ laboratory tests, and the marketing companies kicked back a portion of those payments to referring health care providers, in violation of the AKS.  The health care providers allegedly were paid using purported MSOs, which attempted to disguise kickbacks as investment returns, but actually offered the payments to health care providers to induce lab test referrals to the Defendant. The Defendant allegedly knew of the MSO kickbacks and accepted the referrals and billed Medicare for lab tests in violation of the AKS.

The Defendant agreed, as part of the settlement to cooperate with the DOJ’s investigations of and litigation against other participants in the alleged scheme.

November 1, 2023 OIG Listserv Release

Pelham Manor Man Charged With Health Care Fraud And Kickback Scheme

NY. The Defendant and a co-conspirator allegedly fraudulently sold prescriptions and doctors’ orders for DME, pharmaceuticals and laboratory tests (collectively referred to as scripts) to DME suppliers, pharmacies and labs (Medicare providers). The Defendant allegedly obtained the scripts from call centers that called Medicare beneficiaries and asked perfunctory questions designed to justify a script that would be reimbursed by Medicare. The Defendant turned the information from the calls into scripts by (i) arranging cursory telemedicine appointments with the beneficiaries; (ii) sending information to a doctor who signed the script without seeing the patient and who often was unaware of what was being signed (referred to as “doctor chasing”); and (iii) obtaining forged scripts. The Defendant allegedly sold the scripts to Medicare providers, which filled the orders and billed Medicare. Alleged payments were made by Medicare providers to the Defendant in violation of the AKS and the Defendant and the Medicare providers allegedly entered into sham contracts for generic marketing services at flat rates to conceal the illegal kickback scheme.

CORPORATE INTEGRITY and INTEGRITY AGREEMENTS – NEW CASES

November 9, 2023 – effective date: Reported November 20, 2023

PAKSN, INC., AAKASH, INC. D/B/A PARK CENTRAL CARE & REHABILITATION CENTER, AND PREMA THEKKEK

  • 5 year Corporate Integrity Agreement
  • Covered Conduct:  Allegations that the named parties submitted or caused the submission of false claims to Medicare by paying kickbacks to physicians to induce patient referrals to their SNFs in violation of the AKS. (See OIG Enforcement Summary for November 16, 2023 above.)

Key:

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                  
DOJ = United States Department of Justice
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


[1] 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.

[2] The summaries should be considered to reflect allegations and not necessarily be considered to be statements of fact.