Category Archives: Health Care Fraud

Manhattan U.S. Attorney Announces $4.4 Million Settlement Of Civil Lawsuit Against VNS Choice For Improper Collection Of Medicaid Payments

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Monday, July 17, 2017

VNS Choice Admits to Collecting Medicaid Payments for Hundreds of Beneficiaries Who It Failed to Timely Disenroll From Its Managed Long-Term Care Plan

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that the United States has settled a civil fraud lawsuit against VNS CHOICE, VNS CHOICE COMMUNITY CARE, and VISITING NURSE SERVICE OF NEW YORK (collectively, “VNS”) for improperly collecting monthly Medicaid payments for 365 Medicaid beneficiaries whom VNS Choice failed to timely disenroll from the VNS Choice Managed Long-Term Care Plan (“Choice MLTCP”). Most of the beneficiaries who should have been disenrolled from the Choice MLTCP were no longer receiving health care services from VNS. Under the terms of the settlement approved today by United States District Judge Ronnie Abrams, VNS Choice must pay a total sum of $4,392,150, with $1,756,860 going to the United States and the remaining amount to the State of New York. In the settlement, VNS admits that VNS Choice failed to timely disenroll 365 Choice MLTCP members and, as a result, received Medicaid payments to which it was not entitled.

Acting Manhattan U.S. Attorney Joon H. Kim said: “VNS Choice failed to timely disenroll individuals from its managed care plan and continued to collect Medicaid payments for their care, even when it provided no medical services to them. This Office is committed to holding accountable those who receive government health care program dollars to which they are not entitled.”

HHS-OIG Special Agent in Charge Scott J. Lampert said: “As State Medicaid Programs increasingly have moved to managed care arrangements, we have adapted our investigative tools accordingly. We will continue to work closely with our state and federal law enforcement partners to unravel these schemes, and hold health care providers accountable for the money they receive.”

VNS Choice administers a Managed Long-Term Care Plan for Medicaid beneficiaries pursuant to a contract with the New York State Department of Health (“MLTC Contract”). VNS Choice receives payments for each member enrolled in the Plan (called “capitation payments”) in exchange for arranging and providing certain community-based long-term care services, such as care management, skilled nursing services, physical therapy, speech therapy, occupational therapy, and preventive services. During the relevant period, VNS Choice received a monthly capitation payment of $3,800 to $4,200 for each Choice MLTC member.

The MLTC Contract sets forth various circumstances under which members must be disenrolled. For example, VNS Choice is required to disenroll Choice MLTCP members when it knows that a member no longer resides in the service area, a member has been absent from the service area for a specified number of consecutive days, a member is hospitalized for 45 consecutive days or longer, a member is no longer eligible to receive Medicaid benefits, or a member is deemed to be no longer eligible for managed long-term care. VNS Choice also must initiate disenrollment upon a member’s voluntary request.

As alleged in the United States’ Complaint filed in Manhattan federal court, VNS Choice failed to timely disenroll 365 Choice MLTCP members as required by the MLTC Contract and regulatory requirements during the period January 1, 2011, through March 31, 2015. In many instances, VNS Choice continued to collect capitation payments for several months after the date the member should have been disenrolled, during which time VNS Choice provided no health care services to the member. Approximately half of the 365 members moved out of VNS Choice’s service area or left the service area for extended periods of time. Other members notified VNS Choice of their desire to disenroll from the Choice MLTCP or repeatedly refused services but were not timely disenrolled. VNS Choice also failed to promptly disenroll members after determining that they no longer met managed long-term care eligibility criteria. Although VNS Choice eventually disenrolled the 365 members, it kept the Medicaid payments it had improperly received for these members while delaying their disenrollment.

As part of the settlement, VNS admits, acknowledges, and accepts responsibility for the following conduct:

  • VNS Choice failed to identify and disenroll 365 Choice MLTCP members in a timely manner and, as a result, received monthly capitation payments to which it was not entitled.
  • With respect to a number of these 365 Choice MLCTP Members, VNS Choice was aware at the time it ultimately disenrolled the members that the members should have been disenrolled earlier, but failed to repay Medicaid for the monthly capitation payments that VNS Choice had improperly received for those members.

In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act. The Government previously partially intervened in this whistleblower lawsuit and entered into a settlement with VNS to resolve allegations relating to the use of social adult day care centers to enroll ineligible members in the Choice MLTCP.

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Mr. Kim thanked the Office of the Inspector General for HHS for its assistance. Kim also thanked the Medicaid Fraud Control Unit of the New York State Attorney General’s Office for its investigative efforts and work on the case.

The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Jeffrey K. Powell is in charge of the case.

Senior Executives Of Medical Drug Re-Packager Plead Guilty To Defrauding Healthcare Providers

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Friday, July 14, 2017

President and Pharmacist-in-Charge Distributed Cancer Drugs Contaminated With Mold

Earlier today, in federal court in Brooklyn, Gerald Tighe, the president and owner of Med Prep Consulting Inc. (Med Prep), and Stephen Kalinoski, its director of pharmacy and registered pharmacist-in-charge, pleaded guilty to wire fraud conspiracy in connection with their operation of the now-defunct Tinton Falls, New Jersey-based medical drug re-packager and compounding pharmacy. The pleas were entered before United States District Judge I. Leo Glasser.

The guilty pleas were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and Mark McCormack, Special Agent-in-Charge of the U.S. Food and Drug Administration’s Office of Criminal Investigations, Metropolitan Washington Field Office (FDA/OCI).

According to court filings and facts presented during the plea proceeding, Med Prep processed numerous drugs, including oncology and dialysis drugs, pain medications, anesthesia drugs, and operating room drugs, in purportedly aseptic conditions. In an effort to gain market share, Med Prep repeatedly misrepresented to its customers, who consisted of hospitals and other healthcare providers, that it adhered to, and in some areas exceeded, industry standards and laws applicable to sterile drug preparation. In fact, Med Prep produced drugs in a facility that fell far short of basic industry standards of cleanliness, creating a risk to the health of already ill patients. Tighe and Kalinoski lied to healthcare providers about Med Prep’s failures to comply with basic sterility practices. Med Prep halted its production of drug products in the summer of 2013, following an incident in which it had distributed intravenous drugs containing visible mold to a Connecticut hospital.

“Today’s guilty pleas mark an important step in our continuing effort to hold accountable those who pursue corporate profits over the health and safety of vulnerable patients suffering from disease,” said Acting United States Attorney Rohde. In announcing the guilty plea, Ms. Rohde gratefully acknowledged the assistance and cooperation of the United States Department of Health and Human Services, Office of the Inspector General, Office of Investigations; the United States Office of Personnel Management, Office of the Inspector General; the Department of Justice, Civil Division, Consumer Protection Branch and Commercial Litigation Branch; the FDA’s Office of the Chief Counsel; the Office of the Attorney General of New Jersey; and the New Jersey Board of Pharmacy.

“Producing unsafe and contaminated drugs poses a serious threat to the U.S. public health and cannot be tolerated,” stated FDA/OCI Special Agent-in-Charge McCormack. “The FDA remains fully committed to aggressively pursuing those who place unsuspecting American consumers at risk by distributing adulterated drugs.”

The sentencing, Tighe and Kalinoski each face up to five years in prison, a fine and the forfeiture of criminal proceeds. They will also be required to make full restitution to their victims.

The case is being prosecuted by Assistant United States Attorneys Alixandra E. Smith, Ameet B. Kabrawala and Erin E. Argo.

The Defendants:

GERALD TIGHE

Age: 59

West Long Branch, New Jersey

STEPHEN KALINOSKI

Age: 53

Middletown, New Jersey

E.D.N.Y. Docket No. 15-CR-62 (ILG)

As Part of National Health Care Fraud Takedown, Federal Prosecutors in Los Angeles Charge 14 Defendants in Fraud Schemes that Allegedly Cost Public Healthcare Programs nearly $150 Million

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Thursday, July 13, 2017

LOS ANGELES – In the largest-ever health care fraud enforcement action by federal prosecutors, 14 defendants – including doctors, nurses and other licensed medical professionals – have been charged in the Central District of California for allegedly participating in health care fraud schemes that caused approximately $147 million in losses.

The defendants charged locally are among hundreds of people charged across the United States in cases that cumulatively allege approximately $1.3 billion in false billings. The nationwide sweep includes charges against more than 120 defendants – some of whom are doctors – who allegedly prescribed and distributed opioids and other dangerous narcotics.

In the Central District of California, 14 defendants were charged for their roles in schemes to defraud health insurance programs such as Medicare. The cases allege health care fraud and kickback schemes involving compounded drugs, home health services, physical therapy, acupuncture, Medicare Part D prescription drugs, diagnostic sleep studies and hospice care.

“Health care fraud schemes such as these threaten the vital trust between a patient and his or her health care provider, undermine the integrity of our health care system, and cost all Americans billions of dollars,” said Acting United States Attorney Sandra R. Brown. “Today’s announcement serves as a clear warning that we will continue to work with our law enforcement partners to identify and hold accountable health care professionals who commit these crimes.”

The defendants charged locally include four physicians, including Dr. Jeffrey Olsen, who was charged with illegally prescribing controlled substances, including the opiate oxycodone.

The 57-year-old Olsen surrendered to authorities on Tuesday after being indicted last week by a federal grand jury on 34 counts of illegally prescribing controlled drugs, including oxycodone, and one count of false statement on a DEA registration application. Olsen, a resident of Laguna Beach, allegedly sold prescriptions to addicts and drug dealers in exchange for fixed cash fees, without any medical basis for the prescriptions.

During the investigation, Olsen also sold hundreds of prescriptions to addicts in other states, such as Oregon, without ever seeing the “patients” for an in-person examination. In text messages to these out-of-state customers, Olsen allegedly told customers that, in exchange for exorbitant fees as high as $3,000, he would write prescriptions for whatever drug they wanted, and that he would never check whether they were actually taking the prescribed drugs or whether they were getting additional narcotic prescriptions from other doctors. Olsen allegedly sold more than 1.2 million pills of narcotics, which were almost entirely at maximum strength, in addition to hundreds of thousands of pills of other controlled drugs such as the sedatives Xanax and Soma. The case against Olsen is being prosecuted by Assistant United States Attorneys Ben Barron and Bryant Yang.

In another local case involving a physician, Dr. Thomas S. Powers and Anthony Paduano were arrested Tuesday on healthcare fraud charges that allegedly bilked TRICARE.

The indictment in this case alleges that Powers, of Santa Ana, authorized prescriptions for compounded medications for patients he never examined. Under an agreement, Paduano, of Newport Beach, allegedly paid Powers $200 for each prescription. Paduano received approximately $1.2 million for referring the prescriptions to a local pharmacy that billed TRICARE more than $4.8 million and was paid more than $3.1 million. This case is being handled by Assistant United States Attorneys Mark Aveis, Paul Stern and Cassie Palmer.

“Americans already struggling with health care issues and rising premiums are further burdened with each dollar lost to fraud,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The losses estimated in Los Angeles for this operation alone are staggering as the abundance of health care fraud schemes in southern California adds considerably to this nationwide crime issue. By collaborating with our partners, we will continue to hold accountable those who get rich by targeting federal health care programs with fraud.”

“Those who would enrich themselves through healthcare fraud – including billing for unnecessary services, accepting kickbacks, and billing for prescriptions that were never provided – are putting profits over patients, stealing from government health programs and taxpayers alike,” said Special Agent in Charge Christian Schrank, of the U.S. Department of Health and Human Services Office of Inspector General. “These operations show yet again our commitment to working with our federal and state law enforcement partners. In fighting this epidemic, we must all stand together.”

“IRS Criminal Investigation will not stand still while criminals line their pockets with illicit proceeds obtained from publicly funded health care programs,” said IRS Criminal Investigation Special Agent in Charge R. Damon Rowe. “It depletes scarce taxpayer dollars and will not be tolerated. IRS Criminal Investigation will continue to work with our federal and state law enforcement partners to bring justice to those individuals who prey on the nation’s health care system for their own personal greed.”

“Our office, in partnership with our fellow investigative agencies, will continue to uncompromisingly investigate and bring to justice the people who perpetrate these criminal acts,” said Amtrak Inspector General Tom Howard. We will remain vigilant in protecting Amtrak employees, retirees, and their dependents, by ensuring our health care dollars are not wasted on fraudulent providers,”

“The Department of Labor – Employee Benefits Security Administration will continue to vigorously investigate wrongdoers committing health care fraud against employer sponsored health plans in Southern California which also impact TRICARE, Medicare, Medicaid” said Crisanta Johnson, DOL-EBSA’s Los Angeles Regional Office.

The other cases filed in federal court in Los Angeles as part of the nationwide sweep are:

  • Aniceto Baliton, of Diamond Bar, co-owner and managing employee of Bliss Hospice in Glendora, was charged yesterday with one count of conspiracy to pay and receive illegal remunerations for health care referrals. The charge stems from Baliton’s role in a fraud scheme to pay kickbacks in exchange for Medicare beneficiaries referred to Bliss and billed by Bliss for hospice services. As part of the fraud scheme, Baliton and the co-owners of the hospice also agreed to generate cash for the illegal kickbacks by disguising such monies as payroll expenses. Based on the referrals that Baliton and his co-conspirators obtained through illegal kickbacks, Bliss submitted claims to Medicare and was paid approximately $2.4 million. The case is being handled by DOJ Trial Attorney Claire Yan.
  • Aleksandr Suris and Maxim Sverdlov, co-owners and operators of Royal Care Pharmacy in Los Angeles, were arrested Monday on charges related to a scheme that allegedly brought in more than $41.5 million from Medicare and CIGNA. The indictment in this case charges Suris with two counts of conspiracy to commit health care fraud and 10 counts of health care fraud, and Sverdlov with one count of conspiracy to commit health care fraud and four counts of health care fraud. The defendants allegedly submitted fraudulent bills for prescription drugs that were never filled by the pharmacy or were not provided to the person to whom the drug was prescribed. The case is being handled by DOJ Trial Attorney Robyn N. Pullio.
  • Dr. Kanagasabai Kanakeswaran was indicted late last month on one count of conspiracy to pay and receive kickbacks for health care referrals and four counts of receiving kickbacks for health care referrals. The charges arise from a kickback conspiracy at a home health company called Star Home Health Resources. The owners and operators of Star allegedly paid kickbacks to referring physicians, including Dr. Kanakeswaran, in exchange for the physicians referring Medicare beneficiaries to receive home health services from Star. The indictment alleges that from May 2008 to May 2016, Star was paid $4,157,311 from Medicare based on home health services that Dr. Kanakeswaran referred to Star in exchange for illegal kickbacks. The case is being handled by Assistant United States Attorney Alex Porter and DOJ Trial Attorney Claire Yan.
  • Jamen Oliver Griffith and Damon Glover were charged late last month with conspiring to solicit, receive and pay illegal kickbacks for health care referrals. The charges stem from defendants’ role in a scheme involving undisclosed payments for generating and steering prescriptions of compounded drugs to Valley View Drugs, Inc., a pharmacy located in La Mirada. As set forth in plea agreements that have been filed in court, Griffith and Glover owned and operated Western Medical Solutions, a “marketing” company that paid non-employee “marketers” to generate compounded drug prescription referrals for Valley View. Commission payments to “marketers” for prescription referrals were based on a percentage of the amount insurance companies reimbursed Valley View. Health insurers ultimately reimbursed Valley View $13,860,083 for prescriptions generated by WMS-affiliated marketers. In turn, Valley View paid WMS approximately $7,622,864 for the prescription referrals. The case is being handled by Assistant United States Attorney Ashwin Janakiram.
  • Xiao “Kimi” Gudmundsen, a licensed acupuncturist and the owner of Healthy Life Acupuncture Center, Inc., which operated at two sites in Los Angeles and Riverside, was charged on June 22, with eight counts of health care fraud and three counts of money laundering. The charges arise from allegations that Gudmundsen recruited Amtrak employees to visit Healthy Life and then, among other things, billed the Amtrak health care plan for acupuncture and other services that were not actually provided. The indictment also charges that Gudmundsen laundered payments received from Amtrak for the false bills through various accounts, including accounts held in the names of relatives. Also charged in the indictment are Suzana Cortez, a Healthy Life employee (who faces five counts health care fraud) and Gladys Perez, an Amtrak employee (who faces two counts of health care fraud). This case is being handled by Assistant United States Attorney Poonam Kumar.
  • James Chen pleaded guilty on June 19 to a health care fraud charge related to his pharmacy processing and billing TRICARE for approximately $62 million for fraudulent prescriptions for compounded medications after Chen paid more than 50 percent in referral fees to marketers. The case is being handled by Assistant United States Attorneys Mark Aveis, Paul Stern and Cassie Palmer.

Indictments and criminal informations contain allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

The cases from the Central District of California are the result of investigations conducted by the United States Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; the Defense Criminal Investigative Service; the Drug Enforcement Administration; IRS Criminal Investigation; the Office of Personnel Management, Office of Inspector General; the Veterans Administration, Office of the Inspector General; the Department of Labor – Employee Benefits Security Administration; the California Department of Insurance, Fraud Division; the United States Postal Service, Office of the Inspector General; Amtrak’s Office of the Inspector General; the California Board of Pharmacy; California’s Department of Health Care Services; and the California Department of Justice.

The local cases were filed by Assistant United States Attorneys and Trial Attorneys with the Justice Department’s Medicare Fraud Strike Force. The Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Baton Rouge-Based Medicare Fraud Strike Force Announces Charges Against Four More Individuals For Health Care Fraud And Related Offenses

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Thursday, July 13, 2017

BATON ROUGE, LA – Acting United States Attorney Corey R. Amundson announced today the unsealing of two federal grand jury indictments charging four individuals with health care fraud and related offenses. The cases were unsealed as part of the 2017 National Health Care Fraud Takedown, during which federal, state, and local law enforcement partners announced charges of more than 400 defendants across 41 different federal judicial districts.

The Medicare Fraud Strike Force is part of the joint initiative announced in May 2009 between the U.S. Department of Justice and the U.S. Department of Health and Human Services to reduce and prevent Medicare and Medicaid fraud through enhanced cooperation. In December 2009, a Medicare Fraud Strike Force team was deployed in the U.S. Attorney’s Office in Baton Rouge, Louisiana. Strike Force teams bring together the resources of the U.S. Department of Health and Human Services—Office of Inspector General, the Federal Bureau of Investigation, the U.S. Department of Justice’s Criminal Division—Fraud Section, the U.S. Attorneys’ Offices, and other law enforcement agencies, including, in Baton Rouge, the Louisiana Attorney General’s Medicaid Fraud Control Unit. Over the past seven years, the team has continued working in Baton Rouge and expanded across southern Louisiana.

Louisiana Spine & Sports

In the first case, a federal grand jury has returned an indictment charging John Eastham CLARK, M.D., age 65, of Baton Rouge, Louisiana, and Charlene Anita SEVERIO, age 54, of Walker, Louisiana, with conspiracy to commit wire fraud and health care fraud. The charges stem from Dr. CLARK and SEVERIO’s role in a $4.4 million fraud scheme in which Dr. CLARK and SEVERIO allegedly submitted false claims to Medicare and private insurance companies on behalf of Louisiana Spine & Sports LLC, a pain management clinic in Baton Rouge co-owned by Dr. CLARK. Namely, according to the indictment, Dr. CLARK, and SEVERIO, his billing supervisor, falsified claims to indicate that certain minor surgical procedures occurred on separate days as patient visits, and then instructed employees to create false records substantiating those claims. The indictment also alleges that the defendants submitted false claims seeking reimbursement for medically unnecessary quantitative urinalysis tests. The indictment charges both defendants with two counts of conspiracy to commit wire fraud and health care fraud, and charges Dr. CLARK with an additional two counts of health care fraud. This ongoing investigation is being handled by Dustin Davis, who serves as Assistant Chief of the Department of Justice’s Criminal Division—Fraud Section, Assistant U.S. Attorney Adam Ptashkin, and Jared Hasten of the Fraud Section.

Express ACA

In the second case, a federal grand jury has returned an indictment charging Keaton L. COPELAND, age 32, of Miramar, Florida, and Dorothy V. DELIMA, a/k/a Dorothy V. Copeland, age 45, of Davie, Florida, with a scheme to submit fraudulent health insurance applications to Blue Cross/Blue Shield of Louisiana and other private insurers. According to the indictment, the defendants owned and operated Express ACA, LLC, a health insurance brokerage company in Florida, and they devised a scheme to submit fraudulent health insurance applications to various insurers for health insurance plans that would satisfy the Affordable Care Act’s “minimum essential coverage” requirement. Specifically, according to the indictment, the defendants submitted numerous fraudulent applications for so-called “bronze plans,” the premiums for which were fully subsidized by the U.S. Government, without the named applicants’ knowledge, consent, or authorization. The indictment charges both COPELAND and DELIMA with conspiracy to commit wire fraud and five counts of wire fraud, and the indictment also charges COPELAND with additional counts of wire fraud and aggravated identity theft. This ongoing investigation is being handled by Assistant United States Attorneys J. Brady Casey and Ryan R. Crosswell.

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Since its inception, the Baton Rouge-based Medicare Fraud Strike Force has charged more than 80 defendants with health care fraud and related offenses, achieving a 95% conviction rate and sending nearly 50 of those defendants to federal prison.

Acting U.S. Attorney Corey Amundson stated, “Our medical providers spend countless hours caring for our everyday ailments, improving and extending our lives, and often fighting for us in our most desperate hours. They are rightly viewed as some of the most trusted and respected members of our society. Too often, the few dishonest providers hijack this well-earned respect and trust to line their own pockets through fraud. My office, which has sent nearly 50 healthcare fraud defendants to federal prison since the inception of the Medicare Fraud Strike Force, will continue to work tirelessly with our outstanding federal, state, and local partners to root out these bad actors. I greatly appreciate all those who have contributed to this important and successful law enforcement effort.”

“The indictments returned in both of these cases affirm our commitment to protecting the integrity of our nation’s health insurance programs,” said Special Agent-in-Charge C.J. Porter of the United States Department of Health and Human Services, Office of Inspector General’s (OIG) Dallas Regional Office. “These investigations are also indicative of our continuing efforts to work closely with our Federal and State law enforcement partners to identify and bring to justice those who deliberately manipulate health insurance systems to fraudulently obtain money from Medicare, Medicaid and other federally funded health care programs.”

Jeffrey S. Sallet, the Special Agent-in-Charge of the New Orleans Division of the Federal Bureau of Investigation, stated, “Countless Americans rely on the Medicare and Medicaid programs for essential health coverage. The New Orleans Division of the FBI, along with its local, state and federal partners, will continue to identify and pursue any individuals or entities who would seek to harm and diminish these programs through fraud.”

Louisiana Attorney General Jeff Landry stated, “The success of this initiative shows that collaboration between law enforcement agencies at all levels combats crime. Our investigators work around the clock to fight waste, fraud, and abuse in Medicaid. My office and I are committed to doing all we can to save taxpayer money and protect this program for the people in our State that need it the most. I am proud of the results our team achieved during this operation and what we do daily to reduce Medicaid fraud.”

NOTE: An indictment is an accusation by the Grand Jury. The defendants are presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.

U.S. Attorney Charges NW Alabama Compounding Pharmacy Sales Representatives in Prescription Fraud Conspiracy

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Thursday, July 13, 2017

BIRMINGHAM – The U.S. Attorney’s Office on Wednesday charged two sales representatives for a Haleyville, Ala.,-based compounding pharmacy for participating in a conspiracy to generate prescriptions and defraud health care insurers and prescription drug administrators out of tens of millions of dollars in 2015.

Acting U.S. Attorney Robert O. Posey, FBI Acting Special Agent in Charge David W. Archey, U.S. Postal Inspector in Charge, Houston Division, Adrian Gonzalez, U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson, Defense Criminal Investigative Service Special Agent in Charge John F. Khin, and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge James E. Dorsey announced the charges as part of a nationwide Department of Justice Health Care Fraud Takedown.

Attorney General Jeff Sessions and Department of Health and Human Services Secretary Tom Price, M.D., earlier today announced the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts, including 115 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving about $1.3 billion in false billings. Of those charged, more than 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s nationwide arrests. In addition, HHS has initiated suspension actions against 295 providers, including doctors, nurses and pharmacists.

In the Northern District of Alabama, the U.S. Attorney’s Office filed separate informations charging KELLEY NORRIS, also known as KELLEY NORRIS-HARTLEY, 41, of Tuscaloosa, and BRIDGET McCUNE, 41, of Destin, Fla., with conspiracy to commit health care fraud, wire fraud and mail fraud. McCune’s information also charges her with conspiring to solicit and receive kickbacks in return for referring prescriptions under Medicare and TRICARE, a U.S. Department of Defense health care program, and with money laundering for spending proceeds of the crimes. Both women face various counts of health care fraud for submitting fraudulent prescription reimbursement claims to Blue Cross Blue Shield of Alabama.

In conjunction with the charges, prosecutors also filed plea agreements with Norris and McCune.

“In this case, a pharmacy used a marketing scheme that increased sales of expensive medications without regard for patient need or medical necessity,” Posey said. “Schemes like this defraud Medicare and other health insurance systems by pushing unnecessary medications and driving up the costs of health care.”

Norris and McCune both worked for Northside Pharmacy, an Alabama company doing business as Global Compounding Pharmacy. Global’s compounding and shipping facility was in Haleyville. The pharmacy did its prescription processing, billing and customer service at its “call center” in Clearwater, Fla.

Global hired sales representatives, including Norris and McCune, who were located in various states and were responsible for generating prescriptions from physicians and other prescribers. To bill insurance providers, including Blue Cross Blue Shield of Alabama, Medicare and TRICARE, for these prescriptions, Global contracted to enter the pharmacy networks of their third-party administrators, known as “pharmacy benefit managers” or “PBMs. These PBMs included Prime Therapeutics, Express Scripts Incorporated and CVS/Caremark.

The court documents describe a conspiracy at Global that centered on generating and billing PBMs for fraudulent, often high-reimbursement prescriptions. To generate prescriptions, Global hired sales representatives who were married or related to doctors and other prescribers. Global also encouraged sales representatives to volunteer at doctors’ offices where they would review patient files and push Global’s products to patients. Global executives also frequently instructed employees to obtain high-reimbursing prescriptions that Global would fill and bill for reimbursement. Each of the plea agreements describes a Global executive instructing sales representatives to obtain certain prescriptions and, shortly after, Norris and McCune obtained those prescriptions for themselves and their dependents.

When billing, Global engaged in various fraudulent practices, including splitting drug quantities to evade PBM billing safeguards and automatically refilling and billing for prescriptions regardless of patient need. Global routinely waived co-pays to encourage patients to accept unnecessary medications and refills.

As part of their plea agreements, Norris and McCune agree to forfeit money to the government as proceeds of illegal activity. Norris agrees to forfeit $287,698 and McCune $401,628.

Global paid the defendants a base salary plus a monthly commission for prescriptions that they obtained, according to court documents.

Norris worked out of Tuscaloosa as a sales representative for Global’s Alabama region from August 2014 to July 2016. She was closely related to an Alabama physician. That relative and a second physician, described in her plea agreement as a family friend, wrote a significant number of the prescriptions Norris obtained for Global to fill.

McCune began as a sales representative for Global’s Florida region in September 2014, working from Destin. Global promoted her to national field trainer in January 2015, but she also continued to function as a sales representative until she left the company in July 2016. McCune had a “close familial relationship” with a Florida physician, according to her plea agreement. “The overwhelming majority of prescriptions she obtained” were issued under her family member’s signature, her plea agreement states.

The charges against Norris and McCune follow charges brought by the U.S. Attorney’s Office in May against Global sales representative Robin Gary Lowry, 49, of Columbus, Miss. Lowry was charged with conspiracy to defraud BCBS of Alabama and Prime Therapeutics. She also faced three counts of health care fraud for submitting fraudulent claims for payment to BCBS of Alabama.

Lowry pleaded guilty to the charges in June. She is scheduled for sentencing Nov. 7.

FBI, U.S. Postal Inspection Service, U.S. Department of Health and Human Services Office of Inspector General, U.S. Defense Criminal Investigative Service and Internal Revenue Service, Criminal Investigation investigated the cases, which Assistant U.S. Attorneys Chinelo Dike-Minor and Nicole Grosnoff are prosecuting.

Owner of Home Health Agency and Employee Arrested for Allegedly Stealing Nearly $2.7 Million From MassHealth

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July 11, 2017

Defendants Charged with Routinely Overbilling MassHealth, Falsely Billing for Unauthorized Services that Were Never Provided

BOSTON – The owner of a Boston-based home health agency and an employee have been arrested in connection with allegedly stealing nearly $2.7 million from the state’s Medicaid program (MassHealth) by routinely overbilling and falsely billing for services that were not authorized or provided to patients, Attorney General Maura Healey announced today.

Elena Kurbatzky, age 44, of Boston, and Natan Zalyapin, age 43, of Burlington, were arrested last night by Massachusetts State Police assigned to the AG’s Office. A Suffolk County Grand Jury returned indictments charging Kurbatzky, Zalyapin and the company, Harmony Home Health Care, LLC (Harmony), on Monday.

“We allege that these defendants stole millions of MassHealth funds meant to provide health care for those in need,” said AG Healey. “My office is committed to protecting Medicaid from fraud and abuse.”

Kurbatzky was indicted on charges of Medicaid False Claims (3 counts), Larceny over $250 by False Pretenses (3 counts), and Medicaid Member Eligibility Fraud (1 count). Zalyapin was indicted on charges of Medicaid False Claims (2 counts) and Larceny over $250 by False Pretenses (2 counts). Harmony was indicted on charges of Medicaid False Claims (3 counts) and Larceny over $250 by False Pretenses (3 counts).

Kurbatzky and Zalyapin were arraigned in Suffolk Superior Court today where they pleaded not guilty to the charges. Zalyapin was released on personal recognizance and Kurbatzky was transferred to Boston Municipal Court on an outstanding warrant.

As conditions of their release, they must surrender their passports, be monitored by GPS, not travel outside of the state, check in weekly with the Probation Department, stay away from witnesses in the case, and not provide or bill for MassHealth services. They are scheduled to appear in Suffolk Superior Court for a hearing on Aug. 8.

The company will be arraigned in Suffolk Superior Court on Aug. 8.

Harmony is a home health agency located on Albany Street in Boston and Kurbatzky is the sole owner. The agency was established to provide home health services to individuals covered by the MassHealth program, including skilled nursing, home health aide visits and physical, occupational, and speech therapies. Kurbatzky and Zalyapin are both registered nurses and allegedly provided the majority of nursing services to Harmony’s patients.

The AG’s Office began an investigation after the matter was referred by MassHealth, which suspected misconduct and fraudulent billing practices.

The AG’s investigation revealed that between February 2015 and October 2016, Harmony billed MassHealth for home health services allegedly provided to 38 patients, but either provided no services to those patients or billed for more services than were actually provided.

Specifically, authorities allege that on numerous instances, Harmony billed MassHealth for nurses who allegedly provided services to several patients in different locations at the exact same time, so those services could not physically have been performed as claimed.

The defendants also billed MassHealth for services that were not authorized by physicians and, in many cases, forged physician signatures on the patient plans of care in an attempt to show the services were authorized.

The defendants allegedly billed for services never provided to MassHealth members, including instances where the company billed for home health services while members were at inpatient facilities. Kurbatzky and Zalyapin also billed MassHealth for services that were not provided while they were traveling or while Zalyapin was working at other jobs.

The defendants billed for physical, occupational, and speech therapy for the majority of Harmony’s MassHealth patients even though the services were not authorized by the patients’ physicians and Harmony did not employ licensed therapists to perform the alleged services.

Kurbatzky also allegedly made false statements or failed to disclose material facts in order to make herself eligible for MassHealth. She then allegedly billed MassHealth for services she purportedly received from Harmony that were not authorized by a physician.

Based on these various schemes, the AG’s Office alleges that the defendants defrauded MassHealth of nearly $2.7 million dollars.

MassHealth provides healthcare products and services to eligible low-income individuals, including people with disabilities, children and senior citizens.

All of these charges are allegations and defendants are presumed innocent until proven guilty.

This matter was handled by Assistant Attorneys General Jennifer Goldstein and Kevin Lownds and Investigators Christine Baker and Megan Corrigan, all of AG Healey’s Medicaid Fraud Division, with assistance from the Massachusetts State Police assigned to the AG’s Office, Victim Witness Advocate Amber Anderson, of the AG’s Victim Services Division, and the Office of the Inspector General. MassHealth provided invaluable assistance during this investigation.

Drug Company Sales Rep Admits Role in Kickback Scheme Related to Fentanyl Spray Prescriptions

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Tuesday, July 11, 2017

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that NATALIE LEVINE, 33, of Scottsdale, Arizona, waived her right to be indicted and pleaded guilty today before U.S. District Judge Michael P. Shea in Hartford to one count of engaging in a kickback scheme that defrauded federal healthcare programs.

According to court documents and statements made in court, from approximately March 2013 to October 2014, LEVINE was employed by Insys Therapeutics, an Arizona-based pharmaceutical company that manufactured and sold Subsys, a fentanyl-based sublingual spray that was approved by the Food and Drug Administration solely for the management of breakthrough pain in cancer patients. LEVINE was a sales representative for the company and was responsible for covering the territories that included Connecticut, New Hampshire and Rhode Island.

In pleading guilty, LEVINE admitted that she induced certain medical practitioners, including an advanced practice registered nurse (APRN) in Connecticut, a physician’s assistant (PA) in New Hampshire, and a physician in Rhode Island, to prescribe Subsys by paying them to participate in hundreds of sham “Speaker Programs.” The Speaker Programs, which were typically held at high-end restaurants, were ostensibly designed to gather licensed healthcare professionals who had the capacity to prescribe Subsys and educate them about the drug. In truth, the events were usually just a gathering of friends and co-workers, most of whom did not have the ability to prescribe Subsys, and no educational component took place. “Speakers” were paid a fee that ranged from $1,000 to several thousand dollars for attending these dinners. At times, the sign-in sheets for the Speaker Programs were forged so as to make it appear that the programs had an appropriate audience of healthcare professionals.

The medical practitioners were paid thousands of dollars in illegal kickbacks in order to prescribe Subsys, and induce others to prescribe Subsys, over similar medications. Medicare Part D plans authorized payment for hundreds of Subsys prescriptions written by the three medical practitioners, resulting in a loss of approximately $4.5 million.

LEVINE pleaded guilty to one count of conspiracy to violate the anti-kickback law, an offense that carries a maximum term of imprisonment of five years and a fine of up to $250,000. Judge Shea scheduled sentencing for October 5, 2017.

This investigation is being conducted by the U.S. Department of Health and Human Services Office of the Inspector General and the Federal Bureau of Investigation, with the assistance of the Drug Enforcement Administration’s Tactical Diversion Squad. The case is being prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and Richard M. Molot.

Several other individuals affiliated with Insys Therapeutics, and medical practitioners involved in this kickback scheme, have been charged in the District of Connecticut and in other Districts across the United States.

U.S. Attorney Daly encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force (203) 785-9270 or 1-800-HHS-TIPS.

National Health Care Fraud Takedown Results in Charges Against Over 412 Individuals Responsible for $1.3 Billion in Fraud Losses

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Thursday, July 13, 2017

Largest Health Care Fraud Enforcement Action in Department of Justice History

Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced today the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts, including 115 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $1.3 billion in false billings. Of those charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS has initiated suspension actions against 295 providers, including doctors, nurses and pharmacists.

Attorney General Sessions and Secretary Price were joined in the announcement by Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting Director Andrew McCabe of the FBI, Acting Administrator Chuck Rosenberg of the Drug Enforcement Administration (DEA), Inspector General Daniel Levinson of the HHS Office of Inspector General (OIG), Chief Don Fort of IRS Criminal Investigation, Administrator Seema Verma of the Centers for Medicare and Medicaid Services (CMS), and Deputy Director Kelly P. Mayo of the Defense Criminal Investigative Service (DCIS).

Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG.  In addition, the operation includes the participation of the DEA, DCIS, and State Medicaid Fraud Control Units.

The charges announced today aggressively target schemes billing Medicare, Medicaid, and TRICARE (a health insurance program for members and veterans of the armed forces and their families) for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 91 Americans die every day of an opioid related overdose.

“Too many trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” said Attorney General Sessions. “Amazingly, some have made their practices into multimillion dollar criminal enterprises. They seem oblivious to the disastrous consequences of their greed. Their actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start. The consequences are real: emergency rooms, jail cells, futures lost, and graveyards.  While today is a historic day, the Department’s work is not finished. In fact, it is just beginning. We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”

“Healthcare fraud is not only a criminal act that costs billions of taxpayer dollars – it is an affront to all Americans who rely on our national healthcare programs for access to critical healthcare services and a violation of trust,” said Secretary Price. “The United States is home to the world’s best medical professionals, but their ability to provide affordable, high-quality care to their patients is jeopardized every time a criminal commits healthcare fraud. That is why this Administration is committed to bringing these criminals to justice, as President Trump demonstrated in his 2017 budget request calling for a new $70 million investment in the Health Care Fraud and Abuse Control Program. The historic results of this year’s national takedown represent significant progress toward protecting the integrity and sustainability of Medicare and Medicaid, which we will continue to build upon in the years to come.”

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid and TRICARE for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims.  Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.

“This week, thanks to the work of dedicated investigators and analysts, we arrested once-trusted doctors, pharmacists and other medical professionals who were corrupted by greed,” said Acting Director McCabe. “The FBI is committed to working with our partners on the front lines of the fight against heath care fraud to stop those who steal from the government and deceive the American public.”

“Health care fraud is a reprehensible crime.  It not only represents a theft from taxpayers who fund these vital programs, but impacts the millions of Americans who rely on Medicare and Medicaid,” said Inspector General Levinson. “In the worst fraud cases, greed overpowers care, putting patients’ health at risk. OIG will continue to play a vital leadership role in the Medicare Fraud Strike Force to track down those who abuse important federal health care programs.”

“Our enforcement actions underscore the commitment of the Defense Criminal Investigative Service and our partners to vigorously investigate fraud perpetrated against the DoD’s TRICARE Program. We will continue to relentlessly investigate health care fraud, ensure the taxpayers’ health care dollars are properly spent, and endeavor to guarantee our service members, military retirees, and their dependents receive the high standard of care they deserve,” advised Deputy Director Mayo.

“Last year, an estimated 59,000 Americans died from a drug overdose, many linked to the misuse of prescription drugs. This is, quite simply, an epidemic,” said Acting Administrator Rosenberg. “There is a great responsibility that goes along with handling controlled prescription drugs, and DEA and its partners remain absolutely committed to fighting the opioid epidemic using all the tools at our disposal.”

“Every defendant in today’s announcement shares one common trait – greed,” said Chief Fort. “The desire for money and material items drove these individuals to perpetrate crimes against our healthcare system and prey upon many of the vulnerable in our society.  Thanks to the financial expertise and diligence of IRS-CI special agents, who worked side-by-side with other federal, state and local law enforcement officers to uncover these schemes, these criminals are off the street and will now face the consequences of their actions.”

The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

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For the Strike Force locations, in the Southern District of Florida, a total of 77 defendants were charged with offenses relating to their participation in various fraud schemes involving over $141 million in false billings for services including home health care, mental health services and pharmacy fraud.  In one case, the owner and operator of a purported addiction treatment center and home for recovering addicts and one other individual were charged in a scheme involving the submission of over $58 million in fraudulent medical insurance claims for purported drug treatment services. The allegations include actively recruiting addicted patients to move to South Florida so that the co-conspirators could bill insurance companies for fraudulent treatment and testing, in return for which, the co-conspirators offered kickbacks to patients in the form of gift cards, free airline travel, trips to casinos and strip clubs, and drugs.

In the Eastern District of Michigan, 32 defendants face charges for their alleged roles in fraud, kickback, money laundering and drug diversion schemes involving approximately $218 million in false claims for services that were medically unnecessary or never rendered. In one case, nine defendants, including six physicians, were charged with prescribing medically unnecessary controlled substances, some of which were sold on the street, and billing Medicare for $164 million in facet joint injections, drug testing, and other procedures that were medically unnecessary and/or not provided.

In the Southern District of Texas, 26 individuals were charged in cases involving over $66 million in alleged fraud. Among these defendants are a physician and a clinic owner who were indicted on one count of conspiracy to distribute and dispense controlled substances and three substantive counts of distribution of controlled substances in connection with a purported pain management clinic that is alleged to have been the highest prescribing hydrocodone clinic in Houston, where approximately 60-70 people were seen daily, and were issued medically unnecessary prescriptions for hydrocodone in exchange for approximately $300 cash per visit.

In the Central District of California, 17 defendants were charged for their roles in schemes to defraud Medicare out of approximately $147 million. Two of these defendants were indicted for their alleged involvement in a $41.5 million scheme to defraud Medicare and a private insurer. This was purportedly done by submitting fraudulent claims, and receiving payments for, prescription drugs that were not filled by the pharmacy nor given to patients.

In the Northern District of Illinois, 15 individuals were charged in cases related to six different schemes concerning home health care services and physical therapy fraud, kickbacks, and mail and wire fraud.  These schemes involved allegedly over $12.7 million in fraudulent billing. One case allegedly involved $7 million in fraudulent billing to Medicare for home health services that were not necessary nor rendered.

In the Middle District of Florida, 10 individuals were charged with participating in a variety of schemes involving almost $14 million in fraudulent billing.  In one case, three defendants were charged in a $4 million scheme to defraud the TRICARE program.  In that case, it is alleged that a defendant falsely represented himself to be a retired Lieutenant Commander of the United States Navy Submarine Service. It is alleged that he did so in order to gain the trust and personal identifying information from TRICARE beneficiaries, many of whom were members and veterans of the armed forces, for use in the scheme.

In the Eastern District of New York, ten individuals were charged with participating in a variety of schemes including kickbacks, services not rendered, and money laundering involving over $151 million in fraudulent billings to Medicare and Medicaid. Approximately $100 million of those fraudulent billings were allegedly part of a scheme in which five health care professionals paid illegal kickbacks in exchange for patient referrals to their own clinics.

In the Southern Louisiana Strike Force, operating in the Middle and Eastern Districts of Louisiana as well as the Southern District of Mississippi, seven defendants were charged in connection with health care fraud, wire fraud, and kickback schemes involving more than $207 million in fraudulent billing. One case involved a pharmacist who was charged with submitting and causing the submission of $192 million in false and fraudulent claims to TRICARE and other health care benefit programs for dispensing compounded medications that were not medically necessary and often based on prescriptions induced by illegal kickback payments.

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In addition to the Strike Force locations, today’s enforcement actions include cases and investigations brought by an additional 31 U.S. Attorney’s Offices, including the execution of search warrants in investigations conducted by the Eastern District of California and the Northern District of Ohio.

In the Northern and Southern Districts of Alabama, three defendants were charged for their roles in two health care fraud schemes involving pharmacy fraud and drug diversion.

In the Eastern District of Arkansas, 24 defendants were charged for their roles in three drug diversion schemes that were all investigated by the DEA.

In the Northern and Southern Districts of California, four defendants, including a physician, were charged for their roles in a drug diversion scheme and a health care fraud scheme involving kickbacks.

In the District of Connecticut, three defendants were charged in two health care fraud schemes, including a scheme involving two physicians who fraudulently billed Medicaid for services that were not rendered and for the provision of oxycodone with knowledge that the prescriptions were not medically necessary.

In the Northern and Southern Districts of Georgia, three defendants were charged in two health care fraud schemes involving nearly $1.5 million in fraudulent billing.

In the Southern District of Illinois, five defendants were charged in five separate schemes to defraud the Medicaid program.

In the Northern and Southern Districts of Indiana, at least five defendants were charged in various health care fraud schemes related to the unlawful distribution and dispensing of controlled substances, kickbacks, and services not rendered.

In the Southern District of Iowa, five defendants were charged in two schemes involving the distribution of opioids.

In the Western District of Kentucky, 11 defendants were charged with defrauding the Medicaid program.  In one case, four defendants, including three medical professionals, were charged with distributing controlled substances and fraudulently billing the Medicaid program.

In the District of Maine, an office manager was charged with embezzling funds from a medical office.

In the Eastern and Western Districts of Missouri, 16 defendants were charged in schemes involving over $16 million in claims, including 10 defendants charged as part of a scheme involving fraudulent lab testing.

In the District of Nebraska, a dentist was charged with defrauding the Medicaid program.

In the District of Nevada, two defendants, including a physician, were charged in a scheme involving false hospice claims.

In the Northern, Southern, and Western Districts of New York, five defendants, including two physicians and two pharmacists, were charged in schemes involving drug diversion and pharmacy fraud.

In the Southern District of Ohio, five defendants, including four physicians, were charged in connection with schemes involving $12 million in claims to the Medicaid program.

In the District of Puerto Rico, 13 defendants, including three physicians and two pharmacists, were charged in four schemes involving drug diversion, Medicaid fraud, and the theft of funds from a health care program.

In the Eastern District of Tennessee, three defendants were charged in a scheme involving fraudulent billings and the distribution of opioids.

In the Eastern, Northern, and Western Districts of Texas, nine defendants were charged in schemes involving over $42 million in fraudulent billing, including a scheme involving false claims for compounded medications.

In the District of Utah, a nurse practitioner was charged in connection with fraudulently obtaining a controlled substance, tampering with a consumer product, and infecting over seven individuals with Hepatitis C.

In the Eastern District of Virginia, a defendant was charged in connection with a scheme involving identify theft and fraudulent billings to the Medicaid program.

In addition, in the states of Arizona, Arkansas, California, Delaware, Illinois, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, New York, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Texas, Utah, Vermont and Washington, 96 defendants have been charged in criminal and civil actions with defrauding the Medicaid program out of over $31 million. These cases were investigated by each state’s respective Medicaid Fraud Control Units. In addition, the Medicaid Fraud Control Units of the states of Alabama, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Missouri, Nebraska, New York, North Carolina, Ohio, Texas, and Utah participated in the investigation of many of the federal cases discussed above.

The cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section and from the U.S. Attorney’s Offices of the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG, Drug Enforcement Administration, DCIS and state Medicaid Fraud Control Units.

A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent unless and until proven guilty.

Additional documents related to this announcement will shortly be available here: https://www.justice.gov/opa/documents-and-resources-july-13-2017.

This operation also highlights the great work being done by the Department of Justice’s Civil Division.  In the past fiscal year, the Department of Justice, including the Civil Division, has collectively won or negotiated over $2.5 billion in judgements and settlements related to matters alleging health care fraud.

Brooklyn Pharmacy Owner/Operator Charged With Defrauding Medicare And Medicaid Programs Of Approximately $9 Million

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Monday, July 10, 2017

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the New York Office of the Federal Bureau of Investigation (“FBI”), Scott J. Lampert, Special Agent in Charge of the New York Regional Office for the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), and Dennis Rosen, Inspector General of the New York State Office of the Medicaid Inspector General (“OMIG”), announced today the unsealing of a criminal Complaint charging defendant SUNITA KUMAR with operating a health care fraud scheme utilizing two pharmacies in Brooklyn, New York, through which KUMAR submitted approximately $9 million in fraudulent claims to Medicaid and Medicare. KUMAR was arrested this morning and was presented in Manhattan federal court today before U.S. Magistrate Judge Andrew J. Peck.

Manhattan Acting U.S. Attorney Joon H. Kim said: “As alleged, Sunita Kumar defrauded Medicare and Medicaid, public programs to assist the indigent and the elderly, by submitting $9 million in fraudulent claims. She allegedly did so by inducing people to surrender their own prescriptions and forego their medications in exchange for kickbacks. Medicare and Medicaid provide critical health care for some of our most vulnerable citizens. Together with our law enforcement partners, we will aggressively pursue those who allegedly use public programs as a vehicle for illegal personal profit.”

FBI Assistant Director William F. Sweeney Jr. said: “Exploiting our federal and state health care programs places the economy at a significant disadvantage and threatens the stability of the health care industry overall. Because there’s no single, clearly identifiable victim, the public often finds these schemes incomparable to other, more explicit frauds. But everyone deserves to know that health care fraud alone costs this country tens of billions of dollars a year, not to mention the obvious health safety risks it presents. We will continue to confront this type of crime, and root it out, until it no longer exists.”

HHS-OIG Special Agent-in-Charge Scott J. Lampert said: “Prescription drug scams, such as the one alleged in this case, work to undermine our nation’s health care system. Today’s arrest coordinated with our law enforcement partners serve as a stern warning to pharmacy owners tempted to plunder government health programs meant to care for our most vulnerable citizens.”

Medicaid Inspector General Dennis Rosen said: “Exploiting the Medicaid program for personal gain by preying upon New York’s most-vulnerable populations is reprehensible. We will continue to work closely with our federal, state and local partners to hold wrongdoers fully accountable and protect the integrity of the Medicaid program.”

According to the allegations contained in the Complaint[1]:

KUMAR – while owning one pharmacy herself and operating a second pharmacy, both located in Brooklyn, New York – conducted a multimillion-dollar scheme to defraud Medicare and Medicaid programs by fraudulently seeking reimbursements for prescription drugs. Specifically, KUMAR engaged in a scheme to obtain prescriptions for medications, for which her pharmacies billed and received reimbursement from Medicare and Medicaid, but which she did not actually dispense to customers. From in or about January 2015 through in or about December 2016, KUMAR obtained approximately $9 million in reimbursements from Medicare and Medicaid for prescription drugs that her pharmacies never actually dispensed. KUMAR defrauded Medicare and Medicaid into providing her pharmacies with these reimbursements by obtaining prescriptions from other individuals, who were willing to forego delivery of the medications in exchange for a share of the reimbursed proceeds, in the form of kickbacks paid by KUMAR.

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KUMAR, 54, of Old Westbury, New York, is charged with one count of health care fraud, which carries a maximum sentence of 10 years in prison, and one count of paying illegal remuneration in the form of kickbacks, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Kim praised the investigative work of the FBI, HHS-OIG, and OMIG.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Christopher J. DiMase and Sarah E. Paul are in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

[1] As the introductory phase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Hospice Company To Pay $2 Million To Resolve Alleged False Claims Related To Unnecessary Hospice Care

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Thursday, July 6, 2017

NEWARK, N.J. – A hospice company in Bensalem, Pennsylvania, has agreed to pay to the United States $2 million to resolve allegations that it provided unnecessary hospice services, Acting U.S. Attorney William E. Fitzpatrick announced today.

Compassionate Care of Gwynedd Inc. is a hospice provider based in Bensalem and a subsidiary of Compassionate Care Hospice Group Inc., a Florida corporation with its principal place of business in Parsippany, New Jersey. The settlement announced today follows an investigation by the U.S. Attorney’s Office for the District of New Jersey and the Commercial Litigation Branch of the Justice Department’s Civil Division. The allegations arose from a whistle-blower suit filed under the False Claims Act.

The United States alleges that from Jan. 1, 2005, through Nov. 15, 2011, Compassionate Care of Gwynedd admitted patients who did not need hospice care and billed Medicare for these medically unnecessary services. The government alleges that the company admitted these patients by using a diagnosis of “debility” that was not medically justified.

The relators, or whistler-blowers, in the underlying qui tam will receive more than $350,000 as their statutory share of the recovery under the False Claims Act. The civil lawsuit was filed in the District of New Jersey and is captioned United States, et al., ex rel. Jane Doe and Mary Roe v. Compassionate Care Hospice, et al.

Acting U.S. Attorney Fitzpatrick credited special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to the settlement.

The government is represented by Assistant U.S. Attorney Charles Graybow of the Health Care and Government Fraud Unit of the U.S. Attorney’s Office for the District of New Jersey and Trial Attorney Justin Draycott of the Department of Justice’s Civil Division. The Office of Inspector General and the Office of the General Counsel for the Centers for Medicare and Medicaid Services of the Department of Health and Human Services also participated in the investigation and settlement.

The U.S. Attorney’s Office for the District of New Jersey reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.36 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.

The claims settled by this agreement are allegations only; there have been no admissions of liability.

Counsel for relators: Britton D. Monts Esq., Austin, Texas; Timothy J. McInnis Esq., New York

Counsel for defendant: Sean C. Cenawood Esq., New York