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 helps 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. Drugmaker Nostrum and its CEO refused to agree to a CIA with OIG. OIG reserved the right to exclude Nostrum and its CEO for the alleged conduct cited in a prior settlement. (January 23, 2024.)
  2. Elizabeth Holmes, former CEO and Chairperson of Theranos, Inc. was excluded for 90 years from participation in federal health care programs due to her January 2022 conviction for wire fraud, conspiracy and conspiracy to commit wire fraud. The minimum exclusion period for convictions like Ms. Holmes is five years, but OIG can consider aggravating factors to justify a longer exclusion period. Ramesh Balwani, Theranos, Inc.’s former President, previously was excluded following his conviction for conspiracy to commit wire fraud against Theranos’s patients and investors. (Not summarized below – OIG publication January 19, 2024.)
  3. Jackson Health System allegedly violated EMTALA when it failed to provide an appropriate medical screening exam and stabilization treatment to a patient and failed to provide further medical exam and treatment to a second patient. (Not summarized below – OIG publication January 12, 2024.)
  4. Settlement reached between a for-profit long-term care hospital, its investors and Medicare related to allegations the hospital rapidly increased its charges to overstate the cost outlier payments and transferred millions to some of its investors when the hospital had reason to believe it could not repay the excessive cost outlier payments to Medicare on reconciliation. The settlement amount is based on the hospital’s ability to pay and the payment is to be paid over five years. (January 17, 2024.)
  5. Use of a “friends and family program” to make cash or other payments to beneficiaries under federal health care programs in return for referrals to obtain new patients violates the AKS. (January 8, 2024.)
  6. Cancer research center settles allegations that for clinical trials research programs it billed federal and state Medicaid programs for patient care items and services that were not eligible for government reimbursement and should have been paid by study sponsors. (January 5, 2024.)

January 31, 2024 OIG Listserv Release

Florida Man Arrested For Role In Multimillion-Dollar Medicare Scheme Based On Fraudulent Billing For Durable Medical Equipment

NY. Defendant is the alleged operator of two medical supply companies and a call center who allegedly used his call center to cold-call Medicare beneficiaries and then used their personal and medical information without the beneficiaries’ knowledge or consent to prepare orders for DME. The Defendant allegedly sold the DME orders to co-conspirators who illegally obtained purported signatures or authorizations from health care providers so that fraudulent claims could be submitted to Medicare for reimbursement. The Defendant allegedly used his DME companies to submit unlawful claims to Medicare using two unlawful methods:  (i) purchasing orders outright and (ii) using patient information Defendant generated through his call center and purchasing the purported signatures or authorizations from health care providers.

Kentucky Lab Agrees to $4.9 Million Civil Judgment and Drug Treatment Center Enters Settlement to Pay $2.2 Million to Resolve False Claims Act Allegations

KY. Defendant, a clinical lab, allegedly performed urine drug tests for a drug rehabilitation facility despite knowing the tests were not typically used for patients’ medical diagnosis or treatment. The lab billed for urine drug screens performed on the rehab facility’s specimens without a proper medical order requesting the test.

In a related matter, the drug rehabilitation facility entered into a settlement agreement with the U.S. to resolve allegations the facility caused the submission of those false lab claims. The facility allegedly requested the same complex panel of urine drug tests for all its patients on a weekly basis, without considering whether individual patients needed them and the facility allegedly did not use the results of the expensive tests for patients’ medical diagnosis or treatment.

The matter was initiated through a Qui Tam action.

Home Health Company Owner Sentenced for Nearly $2.8M Medicare Fraud

MI. Defendant, the alleged owner and operator  of a home health company who was excluded from billing Medicare, allegedly purchased a home health company using the names, signatures and personal identifying information of others to conceal his ownership of the company and used that company to bill for services under federal health care programs. The Defendant and his co-conspirators allegedly were paid by Medicare for services that were never provided.

Allegations related to money laundering, aggravated identity theft and witness tampering are outside the scope of this summary.

Serial Health Care Fraudster Sentenced for $234M Medicare Fraud Scheme

CA. Defendant allegedly was previously excluded from participation in federal health care programs following 1990 NY and 2001CA convictions for Medicare and Medicaid fraud. The Defendant failed to submit the required application to be considered for reinstatement, yet he allegedly continued to operate health care clinics in NY that billed federal health care programs. In NY in 2017, the Defendant pled guilty to conspiracy to pay and receive kickbacks and other charges. In CA in 2018, the Defendant allegedly was the owner, operator and manager of a clinical lab in CA that billed federal health care programs, but to be a Medicare provider, the Defendant and a co-conspirator fraudulently concealed the Defendant’s role in the lab, including failing to submit required enrollment documentation identifying the Defendant’s ownership, management position and prior convictions. Another person was identified as the lab’s sole owner to CA’s Department of Public Health. The Defendant allegedly made false statements to the government during its oversight of his probation. The Defendant reportedly pled guilty in CA to conspiracy to commit health care fraud and concealment of his exclusion from Medicare. In addition to a 10-year prison sentence, he was ordered to pay over $31 million in restitution.

January 30, 2024 OIG Listserv Release

Doctor Agrees to Pay $95,000 to Settle Allegations of Health Care Fraud

WA. Defendant, a physician, allegedly ordered DME and was paid based on each order signed, as he worked with RediDoc. RediDoc allegedly employed telemarketing companies to call federal health care program beneficiaries and speak with them about obtaining DME at no cost. Portions of the calls were recorded and the recordings provided to physicians, along with pre-filled prescriptions for DME. The Defendant allegedly reviewed the recordings and signed orders for DME. Although the Defendant expressed concern about the legitimacy of what he was doing, he allegedly continued to work with RediDoc and sign DME orders. The Defendant allegedly signed orders for patients’ DME which were not medically necessary.

Four Plead Guilty to Healthcare Offenses, Including Doctor and Lab Owners

TX. Defendants in separate, but related cases, pled guilty for their roles in a scheme to pay and receive kickbacks in relation to toxicology tests. Two Defendants allegedly are owners of a clinical lab that sought to financially incentivize medical providers to send toxicology tests to their lab by providing illegal financial incentives disguised as legitimate business transactions. One Defendant-physician was allegedly paid under a medical advisory agreement, but he did not perform services sufficient to justify his compensation, was not paid on an hourly rate, and the agreements were allegedly used to funnel kickbacks to the physician for sending toxicology lab tests to the Defendants’ lab.

In another matter, a Defendant-physician allegedly agreed to order certain toxicology tests for patients he saw and ordered them to be performed by two different labs. He allegedly agreed to submit a substantial number of toxicology orders in exchange for kickbacks, which were paid in the form of kickbacks, lease payments, medical advisor payments and ownership shares in a lab.

January 29, 2024 OIG Listserv Release

Houston dental clinic operator convicted in $6M pediatric fraud scheme

TX. Defendant, operator of a family dental care clinic, allegedly submitted fraudulent claims to Medicaid for pediatric dental services, including numerous cavity fillings that the clinic did not provide. The Defendant allegedly employed one individual to practice dentistry without a license and, on occasion, the clinic operated without any dentists at all, but the clinic billed Medicaid as if the services were provided by licensed dentists. The Defendant also allegedly paid kickbacks to marketers and caregivers of Medicaid-insured children to bring them to the clinic for dental services.

Durable Medical Equipment Companies to Pay Millions in False Claims Settlement

SC. Defendants, DME companies, through their direct-to-consumer division, allegedly sold used beds, but billed federal health care programs as if the beds were new; sold certain hospital beds and pressure support surfaces to beneficiaries of federal health care programs under a miscellaneous code which sometimes resulted in a higher price paid by the government; and mischaracterized travel time as DME repair time in order for it to be reimbursable by federal health care programs.

The matter was initiated through a Qui Tam action.

United States and State of Washington File False Claims Act Complaint Against MultiCare for Knowingly Endangering Patients and Fraudulently Billing for Spinal Surgery Procedures

WA. Defendant, a hospital and health care system that owns and operates MultiCare Deaconess Hospital (“Hospital”) and MultiCare Rockwood Clinic (“Clinic”), allegedly knowingly endangered patient safety and falsely and fraudulently billed federal health care programs for spinal surgery procedures when it hired a neurosurgeon to perform neurosurgery services at Hospital despite being aware the physician resigned from a different hospital amid allegations he was performing medically unnecessary surgeries that harmed patients and he falsified diagnoses. The Defendant allegedly recognized the physician was performing a high volume of surgeries and generating significant revenue for the Defendant so it placed the physician on an incentive compensation structure encouraging greater volume and complexity of surgeries. The Defendant, after being informed by the DOJ of its investigation into concerns the physician was harming patients, falsifying diagnoses and performing medically unnecessary services, allegedly continued to allow the physician to see patient and perform surgeries until the WA Department of Health suspended the physician’s ability to perform surgery.

January 26, 2024 OIG Listserv Release

Current and Former Owners of Center City Philadelphia Pharmacy Agree to Pay Over $4.6 Million to Resolve Civil Investigations of Improper Medicare and Medicaid Billing

PA. Defendants, current and former owners of a pharmacy, allegedly billed Medicare and Medicaid for prescriptions that were not actually dispensed and, in some cases, allegedly billed for high-cost formulations of medications while dispensing lower-cost formulations to beneficiaries. The Defendants entered into an Integrity Agreement with OIG.

Columbia Physician Indicted for False Statements to Medicare

MO. Defendant, a physician, allegedly contracted with a telemedicine company that created medical assessments and orders for Medicare beneficiaries who had been solicited by marketing companies. The Defendant allegedly “reviewed” and signed orders for cancer genetic testing, pharmacogenetic testing, and DME and approved orders for medical devices based upon his evaluation of the patients’ conditions and a determination the devices were medically necessary and appropriate. But the Defendant allegedly never evaluated or assessed the patients’ condition, never determined whether the device was medically necessary and appropriate for the patients and never determined whether the listed device was consistent with current accepted standards of medical practice and treatment of the patients’ condition. Additional allegations include that the Defendant never treated five patients who he electronically signed letters of medical necessity for genetic testing.

New Hanover County Social Worker Pleads Guilty to Conspiring to Defraud Medicaid

NC. Defendant, a social worker, allegedly used her role in working with Medicaid beneficiaries to steal and then sell beneficiaries’ identifying information to a co-conspirator who was a licensed mental health counselor. The PII provided by the Defendant included Medicaid numbers which the Defendant knew her co-conspirator used to generate claims for services never provided. The Defendant allegedly received an agreed-upon fee per beneficiary.

New York Presbyterian Hospital Pays Over $800,000 to Settle Claims that Physician Practices Improperly Billed Government Health Care Programs – Government Alleged that Radiation Oncology Practices Failed to Properly Review Images Taken for Guided Radiation Therapy

NY. Defendant, successor hospital to Methodist Hospital that had contracts or joint ventures with two physician practices, agreed to settle claims that two of the radiology practices improperly billed Medicare, Medicaid and TRICARE for images used in image-guided radiation therapy treatment (“IGRT”) provided to cancer patients. It is alleged that between 2012 and 2018, the two different radiology groups billed for images used in IGRT when the images were either not reviewed, or were not timely reviewed, and therefore allegedly not reasonable and necessary. Additional allegations for one radiology group included that initial consultation sessions were in some instances billed at a higher coding level than appropriate.

This matter was initiated through a Qui Tam action.

Assistant Convicted at Trial of Amniotic Fluid Scam

TX. Defendant, a Physician’s Assistant, allegedly, with co-conspirators, defrauded Medicare when he injected amniotic fluid into patients’ connective tissue in an off-label attempt to relieve joint pain. FDA approval has not been extended for use of amniotic products for treatment of joint pain and Medicare does not cover the amniotic product used. The Defendant allegedly billed the injections under a different product’s unique code than the product actually used and he receive a cut of the reimbursements. It is also alleged that the Defendant halted the scheme for a time to avoid detection, but restarted after 10 months when no repercussions were initiated.

January 23, 2024 OIG Listserv Release

Drugmaker Nostrum and CEO Agree to Pay Up to $50 Million to Resolve Claims of Underpaying Rebates Owed Under Medicaid Drug Rebate Program

MA. In October, 2023, the Defendants, drugmaker Nostrum and its CEO, agreed to a settlement to resolve allegations that the Defendants underpaid rebates owed under the Medicaid drug rebate program. The Defendants refused to agree to compliance-related oversight under a CIA. OIG reserved the right to exclude the Defendants for the alleged conduct. The Defendants agreed to pay a minimum of $3.825 million, and up to $50 million if certain financial contingencies are met, to resolve allegations that they violated the FCA by knowingly underpaying Medicaid rebates for one of Nostrum’s drugs. The variable amount is based on the Defendants’ financial condition.

Former CEO of Whittier Health Clinic Sentenced to More Than 10 Years in Prison for Running Multimillion-Dollar Scheme to Defraud Medi-Cal

CA. The Defendant, former president and CEO of a Whittier medical clinic, allegedly directed the clinic to submit fraudulent claims for family planning services that were never provided, often using the information of patients who were recruited at off-site locations with offers of free diabetes testing. He allegedly used the names of two medical providers (a PA and an elderly doctor who was himself a patient in an SNF during much of the scheme) who were not employed at his center and the patients did not see the two providers. In addition to those fraudulent claims, there were pharmacy and lab claims stemming from referrals from the clinic based on the same services that were never delivered.

January 19, 2024 OIG Listserv Release

New York Man Sentenced to Federal Prison and Pays $850,000 in Civil Fines and Restitution for Durable Medical Equipment Scheme

SC. The Defendant, operator of at least eight DME companies, allegedly purchased Medicare beneficiaries’ PII and purported PHI from third party call centers in order to generate doctors’ orders for DME. Doctors’ orders were allegedly generated by paying illegal kickbacks and bribes to telemedicine companies to obtain a medical practitioner’s signature on the orders, regardless of medical necessity. The Defendant was the alleged beneficial owner of a call center in SC that purchased PII of Medicare patients and he and his co-conspirators, including purported telemedicine companies, generated signed doctors’ orders which were used to submit false and fraudulent claims to Medicare and CHAMPVA.

The matter was initiated through a Qui Tam action.

Former Pharmacy President Sentenced to Three Years in Prison for $32 Million Health Care Kickback Scheme

NJ. The Defendant, former president of a pharmacy business, allegedly engaged in a scheme to pay marketing companies to direct prescriptions for expensive medications to the Defendant’s pharmacies. The marketing companies allegedly identified Medicare and TRICARE beneficiaries as targets for expensive drugs and contacted them by telephone to pressure them to agree to the expensive medications. Allegedly, the marketing companies then transmitted recordings of telephone calls with the beneficiaries, together with pre-marked prescription pads for particular drugs that would yield exorbitant reimbursements to telemedicine companies that were paid kickbacks for every beneficiary referred for a prescription, and the telemedicine companies paid doctors to approve the prescriptions. The marketing companies then allegedly directed the prescriptions to the pharmacies, including the Defendant’s, with which they had a kickback arrangement. It was alleged that the pharmacies filled the scripts and sought Medicare and TRICARE reimbursement in violation of the AKS.

January 18, 2024 OIG Listserv Release

AmeriHealth Clinics Consent to a $2 Million Judgment to Resolve Healthcare Fraud Allegations

ID. The Defendants, AmeriHealth and its owners, allegedly violated the FCA when they used vulnerable or inexperienced medical staff to submit or cause to be submitted false claims to federal health care programs. The allegations include that the Defendants pressured the inexperienced medical staff to provide unnecessary and worthless care, resulting in false claims being submitted, and they pressured practitioners to prescribe controlled substances, entered into an unlawful kickback scheme with a third-party lab, and falsely certified information in order to obtain forgiveness of a Paycheck Protection Program (PPP) loan.

Outside the scope of this summary are the allegations on the PPP loan and controlled substances matters.

January 17, 2024 OIG Listserv Release

Richmond clinic owners agree to settle allegations regarding acupuncture devices

TX. The Defendants, clinic, its owners, two nurse practitioners and a chiropractor, allegedly billed Medicare for the surgical implantation of neurostimulator electrodes, invasive procedures usually requiring the use of an operating room. It is alleged that no surgery was involved, but rather patients received devices used for electro-acupuncture, which only involve inserting needles into the patients’ ears and taping the neurostimulator behind the ears with an adhesive.

The Defendant-clinic agreed to a five-year exclusion from participation in any federal health care program.

Southern Oregon Hospital System and Physician Agree to Pay $430,000 to Settle Health Care Fraud Allegations

OR. The Defendants, a health care corporation and one of its cardiothoracic surgeons, allegedly submitted claims to Medicare, Medicaid and TRICARE for cardiothoracic surgeries and specific procedures knowing the procedures did not meet the criteria for reimbursement or were otherwise improper.

New Jersey Hospital and Investors to Pay the United States $30.6 Million for Alleged False Claims Related to Excessive Cost Outlier Payments

NJ. The Defendants, a long-term care hospital and some of its investors, allegedly violated the FCA when the hospital-Defendant claimed excessive cost outlier payments from Medicare and then fraudulently transferred money to its investors in violation of the Federal Debt Collection Procedures Act (FDCPA”). The hospital-Defendant allegedly distorted the cost outlier payments system by rapidly increasing its charges well in excess of any increase in its costs and far beyond what the hospital had the financial ability to repay once its Medicare cost reports were reconciled to account for the charge increases. Additional allegations involving the FDCPA were that the hospital-Defendant transferred millions of dollars to its investors without receiving equivalent value in return at a time when the hospital had reason to believe it would not be able to repay its debts to Medicare.

The settlement amount was determined based on the hospital-Defendant’s ability to pay. The settlement is scheduled to be paid over five years. The hospital-Defendant entered into a five-year CIA (see below).

January 16, 2024 OIG Listserv Release

Shreveport Woman Pleads Guilty to Defrauding Medicaid

LA. The Defendant allegedly is a mental health specialist employed by a licensed mental health rehabilitation provider. The Defendant’s employer allegedly provided crisis intervention services that required face-to-face encounters for up to a benefit maximum of service hours. The Defendant allegedly prepared false progress notes detailing very specific behaviors and crisis intervention services rendered that were not actually provided. Her employer allegedly billed Medicaid for services based on her false documentation. In addition to allegedly creating false progress notes that were used for billing Medicaid, the Defendant allegedly inflated her hours of service to maximize billing and incorrectly categorize non-crisis intervention services as crisis intervention services in order to support fraudulent claims.

January 12, 2024 OIG Listserv Release

Attorney General Josh Stein Reaches $61,000 Medicaid Fraud Settlement with Burlington Provider

NC. The Defendant, a behavioral health provider, allegedly submitted false claims to NC Medicaid when he billed Medicaid for psychotherapy and psychiatric diagnostic evaluation claims and failed to maintain documentation the services were provided or medically necessary.

St. Louis Area Doctors Accused of Illegally Administering Ketamine, Health Care Fraud

MO. The Defendants, two physicians, allegedly defrauded Medicare when one Defendant falsely used the other Defendant’s name and Medicare billing number to bill for health care services, including annual wellness visits. One Defendant allegedly was suspended from participation in MO’s Medicaid program in 2020 and failed to report that to Medicare and he continued to provide services to Medicare beneficiaries through the other Defendant’s businesses. Additional allegations involve failure to lawfully dispense controlled substances and failure to provide the required supervision of the treatment by a provider with appropriate credentials.

Not included in the summary are allegations related to controlled substances.

January 11, 2024 OIG Listserv Release

New Jersey Laboratory and Its Owner and CEO Agree to Pay Over $13 Million to Settle Allegations of Kickbacks and Unnecessary Testing

NJ. The Defendants, a clinical laboratory and its owner and CEO, allegedly paid five types of kickbacks to induce referrals to Defendant-lab for laboratory testing. The allegations include:

  1. Defendants paid commissions based on the volume and value of Medicare and Medicaid referrals to independent contractor marketers to arrange for, and recommend, that health care providers order lab tests from Defendant-lab.
  2. Defendant-lab’s marketer paid health care providers purported MSO payments which were disguised as investment returns, but were actually offered to induce the providers to order Defendant’s lab tests.
  3. Defendant-lab’s marketer paid health care providers to induce orders for Defendant’s lab tests, but the payments were disguised as consulting or medical director fees.
  4. Defendant-lab’s marketer paid kickbacks to one or more principals of certain substance abuse recovery centers to induce referrals to Defendant for lab testing.
  5. Defendants paid specimen collection fees to staff members of referring health care providers to induce those providers to order Defendant lab tests.

The settlement also resolves allegations the Defendants billed or caused to be billed Medicare and Medicare for tests, despite paying or knowing of kickbacks. The Defendants allegedly submitted or caused false claims to be submitted to Medicare and Medicaid for lab tests that were not reasonable and necessary, not covered because they were identical orders of urine drug testing panels for all patients within a clinician’s practice without individualized decision-making, or not covered because they were improperly duplicative of other claims for urine drug testing for the same date of service, the same patient and the same drugs.

The Defendants agreed to cooperate with the DOJ’s investigations of and litigation against other participants in the alleged schemes.

January 10, 2024 OIG Listserv Release

Nine Indicted in Federal Health Care Fraud Probe

VA. The Defendants include the alleged owners and operators of a Medicaid-enrolled home health agency, nurse-employees of the agency, and a medication technician-employee. The Defendants allegedly submitted false claims to Medicaid for services that were not provided to patients, including falsifying records and documentation to support the fraudulent claims submitted for reimbursement. The Defendants are charged with conspiracy to commit health care fraud.

January 8, 2024 OIG Listserv Release

Home Healthcare Company Agrees to Pay Nearly $10 Million to Resolve False Claims Act Allegations Relating to Its Participation in the Energy Employees Occupational Illness Compensation Program

AZ. The Defendant, home care agency operating in multiple states, allegedly violated the FCA by submitting false claims to the Energy Employees Occupational Illness Compensation Program (“EEOICP”), which is a health care program benefitting the Department of Energy’s employees and contractors with occupational illnesses. The Defendant allegedly billed EEOICP for in-home nursing and personal care when the Defendant’s employees were not physically present in patients’ homes, as well as paid kickbacks under the “friends and family program” in the form of cash payments for patient referrals and in-kind payments for food, internet, travel and other expense made to patients and their families. The AKS applies to EEOICP and prohibits parties that participate in federal health care programs from knowingly and willfully paying or  receiving any remuneration in return for referring an individual to, or arranging for the furnishing of, any item or services for which payment is made by federal health care programs.

The Defendant made a self-disclosure to OIG on the friends and family program. The settlement amounts was reported as based on the Defendant’s financial condition.

The matter was initiated by a Qui Tam action.

Two Florida Residents Sentenced for $93M Health Care Fraud and Money Laundering Scheme

FL. The Defendants allegedly conspired with others to submit false bills to Medicare for three home health companies located in Michigan. Co-conspirators allegedly recruited individuals from Cuba to sign Medicare enrollment documents and appear as the owners of the home health agencies to conceal the identities of the two Defendants and others involved in the scheme. The home health agencies allegedly submitted claims for services that were not rendered, using lists of stolen patient identities. Defendants and co-conspirators allegedly used shell companies and bank accounts to launder the Medicare fraud proceeds.

January 5, 2024 OIG Listserv Release

Memphis-Based Methodist Le Bonheur Healthcare and Methodist Healthcare-Memphis Hospitals Pay $7.25 Million to Settle Allegations that They Violated the False Claims Act

TN. The Defendants allegedly violated the federal FCA by entering into a multi-agreement affiliation agreement with West Clinic and the University of Tennessee Health Science Center where the affiliation agreements included an Asset Purchase Agreement, Management Services Agreement, Leased Employee and Administrative Services Agreement, and Professional Services Agreement. The agreements allegedly were used by the Defendants as a vehicle to pay kickbacks to the West Clinic, in part to induce the West Clinic to refer Medicare beneficiaries to the Defendants.

The matter was initiated through a Qui Tam complaint initiated by the former president of Methodist University Hospital and the former Dean of the University of Tennessee Health Science Center.

Florida Research Hospital Agrees to Pay More than $19.5 Million to Resolve Liability Relating to Self-Disclosure of Improper Billing for Clinical Trial Costs

FL. The Defendant, a non-profit cancer treatment and research center, agreed to pay $19,564,743 to resolve allegations it violated the federal FCA by improperly submitting claims to federal health care programs for certain patient care items and services provided during research studies that were not eligible for federal and Medicaid reimbursement. The Defendant allegedly billed federal health care programs for items and services, provided under the clinical trial research, that should have been billed to non-government trial sponsors. The Defendant initiated an independent investigation and compliance review and voluntarily disclosed its findings to the government, it cooperated with the government’s investigations, and it implemented prompt and substantial remedial measures.

CORPORATE INTEGRITY and INTEGRITY AGREEMENTS – NEW CASES

January 18, 2024 – effective date: Reported January 12, 2024

Columbus LTACH, LLC d/b/a Silver Lake Hospital

*  5 year Corporate Integrity Agreement

*  Covered Conduct: The Hospital allegedly claimed excessive cost outlier payments from Medicare and then fraudulently transferred money to its investors in violation of the Federal Debt Collection Procedures Act (FDCPA”). The Hospital allegedly distorted the cost outlier payments system by rapidly increasing its charges well in excess of any increase in its costs and far beyond what the hospital had the financial ability to repay once its Medicare cost reports were reconciled to account for the charge increases. Additional allegations involving the FDCPA were that the hospital-Defendant transferred millions of dollars to its investors without receiving equivalent value in return at a time when the hospital had reason to believe it would not be able to repay its debts to Medicare.

See January 17, 2024 summary above: New Jersey Hospital and Investors to Pay the United States $30.6 Million for Alleged False Claims Related to Excessive Cost Outlier Payments.

HHS-OIG ADVISORY OPINIONS POSTED DURING JANUARY 2024

2023-12 – posted January 3, 2024

Favorable Opinion regarding two-year redemption payment for physician partner’s ownership interest on voluntary retirement.

2023-13 – posted January 3, 2024

Favorable Opinion regarding the use of a “preferred hospital” network as part of Medigap policies where the insurance company contracts with a PHO to provide discounts on otherwise applicable Medicare inpatient deductibles for its policyholders, and the insurance company would provide a premium credit of $100 off the next renewal premium to policyholders who use the network hospital for an inpatient stay.

2023-14 – posted January 3, 2024

Favorable Opinion regarding the use of a “preferred hospital” network as part of Medigap policies where the insurance company contracts with a PHO to provide discounts on otherwise applicable Medicare inpatient deductibles for its policyholders, and the insurance company would provide a premium credit of $100 off the next renewal premium to policyholders who use the network hospital for an inpatient stay.

2023-15 – posted January 3, 2024

Favorable Opinion regarding the use of gift cards by a physician consulting firm, when its existing customers refer another physician practice to the consulting firm as a potential new customer.

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
EMTALA = Emergency Medical Treatment and Labor Act
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
PHI = Personal Health Information
PHO = Preferred Hospital Organization
PII = Personally Identifying Information
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.