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Recent Criminal and Civil Enforcement Actions

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From Akerman’s Health Law Rx Blog:

POSTED BY JOSEPH W. N. RUGG ON FEBRUARY 15, 2013

In 2009, the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”) initiative was formed as a joint effort between the Departments of Justice and Health and Human Services, and combating health care fraud continues to be a major focus of federal and state authorities. The Office of Inspector General (“OIG”) publishes a list of the criminal and civil enforcement actions and the punishment that has been meted out to those convicted of some sort of healthcare fraud. Here are three examples from February listings where jail time or substantial fines or both have been imposed.

  • On February 1, a 50-year-old pharmacist who owned and operated 26 pharmacies in the Detroit area was sentenced to 17 years in prison. The evidence presented at trial showed that during 2006 through 2011 the pharmacies had billed Medicare and Medicaid more than $57 million, at least 25% of which billings were fraudulent as being either medically unnecessary or never actually dispensed. Similar fraudulent activities occurred with respect to commercial insurance. The pharmacist’s business model was to pay kickbacks to physicians in exchange for writing prescriptions for expensive medications or for controlled substances without regard to medical necessity. In addition to the jail time, the defendant was required to repay Medicare and Medicaid $17.3 million and commercial insurers $1.5 million.
  • On February 4, two patient recruiters for a Miami home healthcare company pleaded guilty for their participation in a $20 million home health Medicare fraud scheme. The recruiters admitted that during 2007 through 2009, they recruited patients for which the home health agency could bill Medicare, and the home health agency’s owners paid them kickbacks and bribes. Medicare was billed for home health care and therapy services that were either medically unnecessary or not provided. The recruiters face jail time and fines, and each of the two  home health agency’s owners have already been sentenced to over 6 years in jail.
  • On February 7, St. Joseph’s Medical Center, a hospital located in Towson, MD, agreed to pay $4.9 million in connection with its submission of false claims to Medicare, Medicaid, and other federal healthcare programs. The hospital stated that during 2007 through 2009 it admitted patients for short stays – typically one or two days – that were not warranted by the patient’s medical condition but which would result in larger insurance payments than was appropriate.

If you are aware of potentially fraudulent or even inadvertent noncompliant activities in your healthcare business, you need to seek assistance to fix those problems before they become the object of an investigation. Because former employees and business partners of healthcare providers are often the ones reporting the fraudulent activities to the authorities, problems cannot be ignored.

Since the the above blog was posted on the Akerman Health Law Rx Blog, the following was posted by the OIG:

Cardiologist admits taking cash kickbacks for patient referrals —  According to a February 14, 2013 press release from the Office of the U.S. Attorney, District of New Jersey:

Shashi Agarwal, 60, of Edison, N.J., who has his own cardiology practice in East Orange, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an Information charging him with one count of soliciting and receiving more than $100,000 in cash kickbacks in violation of the federal health care anti-kickback statute.

Agarwal is the 10th person to plead guilty in the government’s investigation into the scheme to pay cash to health care providers who referred patients to Orange Community MRI, LLC (Orange MRI) in Orange N.J., for diagnostic testing.

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