Category Archives: HHS-OIG

South Carolina Ambulance Company to Pay U.S $800,000 to Resolve False Claims Allegations

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Monday, February 25, 2013
Williston Rescue Squad Inc. has agreed to pay the United States $800,000 to resolve allegations that it violated the False Claims Act by making false claims for payment to Medicare for ambulance transports, the Justice Department announced today.  Williston, based in Williston, S.C., provides ambulance transport services in the southwestern part of South Carolina.

 

Medicare is a federally-funded health care program that is intended to provide basic medical insurance to people over the age of 65.  Medicare reimburses providers only for non-emergency ambulance transports if the patient transported is bed-confined or has a medical condition that requires ambulance transportation.  The settlement resolves allegations that Williston billed Medicare for routine, non-emergency ambulance transports that were not medically necessary and that Williston created false documents to make the transports appear to meet the Medicare requirements.

“Billing Medicare for unnecessary ambulance transports contributes to the soaring costs of health care,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division.  “The Department of Justice is committed to pursuing companies that waste limited Medicare funds.”

 

“Medicare fraud is stealing, and it is crippling America’s health care system.  We have doubled the number of attorneys working these cases in South Carolina.  Take notice, if you are bilking the Medicare system designed to support our elders, we are working to find you.  For the honest service providers, which is a greater majority of the community, you can report fraud at  1-800-MEDICARE,” said William N. Nettles, U.S. Attorney for the District of South Carolina.

 

The settlement resolves a lawsuit filed by Sandra McKee under the qui tam, or whistleblower provisions, of the False Claims Act.  McKee is a clinical social worker at a facility that regularly received patients transported by Williston’s ambulances.  Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery.  Ms. McKee will receive $160,000 as her share of the government’s recovery.

 

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion.

 

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

 

The United States’ investigation was conducted by the U.S. Attorney’s Office for the District of South Carolina, the Justice Department’s Civil Division, and the U.S. Department of Health and Human Services, Office of the Inspector General.  The claims settled by this agreement are allegations only; there has been no determination of liability.

 

The False Claims Act suit was filed in the U.S. District Court for the District of South Carolina and is captioned United States ex rel. McKee v. Williston Rescue Squad, Inc., No.  11-CV-00186 (D.S.C.).

Miami Pharmacy Owner Sentenced to 14 Years in Prison in $23 Million Health Care Fraud Scheme

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Monday, February 25, 2013
A co-owner and operator of three Miami discount pharmacies was sentenced today to 168 months in prison for his role in a health care fraud scheme that submitted more than $23 million in false claims to Medicare.

The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

Jose Carlos Morales, 55, of Miami, was sentenced by U.S. District Judge Joan A. Lenard in the Southern District of Florida.  In addition to his prison term, Morales was sentenced to serve three years of supervised release and to pay a $100,000 fine.  A hearing to determine the amount of restitution Morales will pay has been scheduled for April 29, 2013.

On Dec. 6, 2012, Morales pleaded guilty in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and pay illegal health care kickbacks.

According to court documents, Morales was the co-owner of Pharmovisa Inc. and PharmovisaMD Inc., which operated a total of three pharmacies in Miami.  Morales paid illegal health care kickbacks to co-conspirators in return for a stream of beneficiary information to be used to submit claims to Medicare and Medicaid.  The beneficiaries who were referred to the pharmacies in exchange for kickback payments resided at assisted living facilities (ALFs) located in Miami.  Morales and his alleged co-conspirators also paid illegal health care kickbacks to physicians in exchange for prescription referrals, which the pharmacies ultimately billed to Medicare.

Court documents also reveal that beginning in approximately 2007, drivers working for Morales’ pharmacies, at his direction, delivered “bingo cards” containing pop out medications to ALFs located throughout the Southern District of Florida.  Morales instructed the drivers to pick up any unused “bingo cards” so that Morales pharmacy personnel could put the medications back into pill bottles.  Unused and partially used medications were eventually re-billed to Medicare and Medicaid, and a majority of the previously submitted claims to Medicare and Medicaid were never reversed.  Morales also instructed Morales pharmacy personnel to place unused and partially used medications into bottles to be sold directly to the general public from the “community” pharmacy shelves.

Morales and his alleged co-conspirators also engaged in sham financial transactions to facilitate and conceal the fraud schemes and the flow of fraud proceeds, according to court documents.  In most instances, the sham transactions involved shell entities owned and/or controlled by Morales or his alleged co-conspirators.

According to court documents, Morales and his co-conspirators submitted and caused to be submitted approximately $23,367,755 in false and fraudulent claims to the Medicare and Florida Medicaid programs.

The case is being prosecuted by Trial Attorney Allan J. Medina and Special Trial Attorney William Parente of the Criminal Division’s Fraud Section.  This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.  To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

Illegal Marketer of Medicare Information Admits Role in Detroit-area Home Health Care Fraud Scheme

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Friday, February 22, 2013
A health care worker who sold Medicare beneficiary information to Detroit-area home health agency operators as part of a $24.7 million home health care fraud conspiracy pleaded guilty today for his role in the scheme, which sought to profit by billing for home healthcare services that were medically unnecessary and not provided.

The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Chicago Regional Office.

Clarence Cooper, 54, of Detroit, pleaded guilty before U.S. District Judge Victoria A. Roberts in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.

According to court documents, Cooper and others conspired to defraud Medicare through purported home health care companies operating in the Detroit area, including now-defunct First Choice Home Health Care Services Inc. and Reliance Home Care, LLC.  Cooper admitted that he sold Medicare information he obtained from Detroit-area Medicare beneficiaries to other conspirators at these and other health care companies, knowing that it was to be used to submit claims to Medicare for home health services that were not medically necessary and/or not provided.  According to court documents, from 2008 through May 2012, Cooper sold co-conspirators the Medicare information of hundreds of Medicare beneficiaries, at $200 to $300 per beneficiary, and this Medicare information was used at these companies to bill Medicare for nearly $1 million in home health care services.

Court documents show that the larger scheme in which Cooper participated resulted in more than $24.7 million in claims to Medicare for the cost of home health services, psychotherapy and other medical services.

Cooper faces a maximum potential penalty of 10 years in prison and a $250,000 fine.  Sentencing is currently scheduled for July 23, 2013.

This case is being prosecuted by Trial Attorney William G. Kanellis and Assistant Chief Gejaa Gobena of the Criminal Division’s Fraud Section.  It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

Northern Virginia Therapy Provider to Pay $700,000 to Resolve False Claims Act Allegations

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Government Alleges Skilled Nursing Facility Billed for Medically Unnecessary Therapy

Fairfax, Va.-based skilled nursing facility Fairfax Nursing Center (FNC) and its owners have agreed to pay $700,000 to resolve allegations that they violated the False Claims Act by knowingly submitting or causing the submission to Medicare of false claims for non-reimbursable rehabilitation therapy services, the Justice Department announced today.

 

The settlement resolves claims that FNC provided excessive, medically unnecessary, or otherwise non-reimbursable physical, occupational, and speech therapy services to 37 Medicare beneficiaries serviced by FNC between January 2007 and December 2010.   The United States alleged that the rehabilitation therapy services provided by FNC to these beneficiaries were not reasonable and necessary for the treatment of their condition.  Specifically, the United States alleged that the therapy services were often excessive, duplicative, performed without clear goals or direction, and, in some instances, performed primarily to capture higher reimbursement rates.

 

“Today’s settlement is another example of the Department’s efforts to hold skilled nursing facilities accountable for the rehabilitation therapy services they deliver to some of the most vulnerable in our society,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice.   “The provision of excessive and medically unnecessary therapy services will not be tolerated.”

 

“Medicare fraud takes many forms and arises in various segments of health care,” said U.S. Attorney Neil H. MacBride. “We continue to work toward recovery of money lost to overbillings to Medicare.”

 

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $10.2 billion since January 2009 in cases involving fraud against federal health care programs.  The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion.

 

The allegations settled today arose from a lawsuit filed by two former FNC therapists and one former contract therapist under the qui tam, or whistleblower provisions, of the False Claims Act.   Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery.   The whistleblowers in this case will receive, collectively, $122,500 of the recovery.   The lawsuit is captioned as United States of America & Commonwealth of Virginia ex rel. Christine Ribik, Nadine Kelly, & Stephanie Beauregard v. Fairfax Nursing Center, Inc., et al. , No. 1:11-cv-496 (E.D. Va.).

 

The case was handled by the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Virginia, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the Medicaid Fraud Control Unit of the Commonwealth of Virginia Attorney General’s Office.   The claims settled by this agreement are allegations only; there has been no determination of liability.

Florida Physician to Pay $26.1 Million to Resolve False Claims Allegations

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Steven J. Wasserman, M.D., a dermatologist practicing in Venice, Fla., has agreed to pay $26.1 million to resolve allegations that he violated the False Claims Act by accepting illegal kickbacks from a pathology laboratory and by billing the Medicare program for medically unnecessary services, the Justice Department announced today.   The settlement is the largest ever with an individual under the False Claims Act in the Middle District of Florida and one of the largest with an individual under the False Claims Act in U.S. history.

The government alleged that, in or around 1997, Dr. Wasserman entered into an illegal kickback arrangement with Tampa Pathology Laboratory (TPL), a clinical laboratory in Tampa, Fla., and Dr. José SuarezHoyos, a pathologist and the owner of TPL, in an effort to increase the lab’s referral business.   Under that agreement, Dr. Wasserman allegedly sent biopsy specimens for Medicare beneficiaries to TPL for testing and diagnosis.   In return, TPL allegedly provided Dr. Wasserman a diagnosis on a pathology report that included a signature line for Dr. Wasserman to make it appear to Medicare that he had performed the diagnostic work that TPL had performed.   The government alleged that Dr. Wasserman then billed the Medicare program for TPL’s work, passing it off as his own, for which he received more than $6 million in Medicare payments.   In addition, the government asserted that, in furtherance of his agreement with TPL, Dr. Wasserman substantially increased the number of skin biopsies he performed on Medicare patients, thus increasing the referral business for TPL.

The government further alleged that, in addition to his involvement in the alleged kickback scheme, Dr. Wasserman also performed thousands of unnecessary skin surgeries known as adjacent tissue transfers on Medicare beneficiaries.   Adjacent tissue transfers are complicated and often time-consuming procedures physicians sometimes use to close a defect resulting from the removal of a growth on a patient’s skin.   The governmentalleged that Dr. Wasserman performed many of these procedures in order to obtain the reimbursement for them, and not because they were medically necessary.

“Doctors who take illegal kickbacks and perform unnecessary procedures not only put their own financial self-interest over their duty to their patients, they raise the cost of health care for all of us as patients and as taxpayers,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “The Department of Justice will not tolerate those who abuse the public health care programs to which we all contribute and on which we all depend.”

“This settlement represents a watershed achievement in our district’s civil healthcare fraud enforcement program,” said Robert O’Neill, U.S. Attorney for the Middle District of Florida.  “Schemes of this magnitude require extraordinary remedies, and we are proud to have reached such an outstanding resolution for the taxpayers and their health programs.”

The allegations resolved by today’s settlement were initiated by a lawsuit originally filed in the District Court for the Middle District of Florida by Alan Freedman, M.D., a pathologist who formerly worked at TPL.   Dr. Freedman filed the lawsuit under the qui tam, or whistleblower provisions of the False Claims Act.   Under the False Claims Act, a private party may file suit on behalf of the United States for false claims and share in any recovery.   The United States has the right to intervene in the action, which it did in this case, filing its own complaint in October 2010.   Dr. Freedman will receive $4,046,000 of today’s settlement.

The United States previously settled with TPL and Dr. SuarezHoyos for $950,000 to resolve the allegations asserted against them in the same lawsuit.

“Anyone cheating patients and taxpayers should expect to pay a high price,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.  “Besides paying more than $26 million, Dr. Wasserman is excluded from treating patients and being paid under Medicare, Medicaid and all other federal health care programs.”

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion.

Principal Deputy Assistant Attorney General Delery and U.S. Attorney O’Neill thanked the joint investigation team, which includes special agents with the Department of Health and Human Services-OIG and the FBI, for their efforts in the investigation of this matter.

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

Former Registered Nurse Sentenced in Miami to 111 Months in Prison in Connection with $63 Million Mental Health Care Fraud Scheme

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A former registered nurse was sentenced today to serve 111 months in prison for his role in a health care fraud scheme involving defunct health provider Health Care Solutions Network Inc. (HCSN), announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

John Thoen, 53, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida.  In addition to his prison term, Thoen was sentenced to serve three years of supervised release.

On Nov. 20, 2012, Thoen pleaded guilty in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.

According to court documents, HCSN operated community mental health centers (CMHC) at three locations in Miami-Dade County, Fla., and one location in Hendersonville, N.C.  HCSN purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness.  A PHP is a form of intensive treatment for severe mental illness.  According to court documents, HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not even provided.  HCSN obtained those beneficiaries in Miami by paying kickbacks to owners and operators of assisted living facilities.

According to court documents, Thoen was a licensed registered nurse in both Florida and North Carolina.  In Florida, Thoen participated in the admission to HCSN of patients who were ineligible for PHP services.  Thoen participated in the routine fabrication of patient medical records that were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Medicaid.

In North Carolina, Thoen, according to court documents, routinely submitted fraudulent PHP claims for Medicare patients who were not even present at the CMHC on days PHP services were purportedly rendered.  Thoen also caused the submission of fraudulent Medicare claims on days the CMHC was closed due to snow.

Thoen also admitted to his role in a money laundering scheme, involving Psychiatric Consulting Network Inc. (PCN), a Florida corporation that was utilized by HCSN as a shell corporation to launder health care fraud proceeds.  According to court documents, Thoen was president of PCN.

According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.

Fifteen defendants have been charged for their alleged roles in the HCSN health care fraud scheme, and nine defendants have pleaded guilty.  Alleged co-conspirators Wondera Eason and Paul Layman are scheduled for trial on March 11, 2013, before Judge Altonaga in Miami.  And alleged co-conspirators Alina Feas, Dana Gonzalez, Gema Pampin and Lisset Palmero are scheduled for trial on June 3, 2013.  Defendants are presumed innocent until proven guilty at trial.

The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section. This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  In support of the Medicare Fraud Strike Force, the FBI Criminal Investigative Division’s Financial Crimes Section has funded the Special Trial Attorney position.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

District Court Enters Permanent Injunction Against Ohio-Based Drug Manufacturer and Company’s Senior Executives

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U.S. District Court Judge Lesley Wells entered a consent decree of permanent injunction against Ben Venue Laboratories Inc., a Bedford, Ohio-based drug manufacturer, the Justice Department announced today.  The permanent injunction was also entered against George P. Doyle, president and chief executive officer, Kimberly A. Kellermann, vice president of operations, and Douglas A. Rich, vice president of quality operations, for Ben Venue. The department, at the request of the Food and Drug Administration (FDA), asked the court to enter the consent decree.

Ben Venue manufactures numerous generic sterile injectable drug products, including cancer medications.   As set forth in the complaint filed by the United States on January 22, FDA conducted an inspection of defendants’ facility from Nov. 7 to Dec. 2, 2011, and documented 10 deviations from current good manufacturing practices.   According to the complaint, the FDA found, among other things, that the company failed to create and follow appropriate procedures to prevent contamination of drugs which were purported to be sterile.   The FDA also found that the company failed to properly clean and maintain its equipment to ensure the safety and quality of the drugs it manufactured.   In addition, the FDA determined that the company failed to conduct adequate investigations of drugs that did not meet their specifications.

 

Compliance with current good manufacturing practices requirements assures that drugs meet the safety requirements of the law and have the identity and strength and meet the quality and purity characteristics that they purport to or are represented to possess.   FDA regulations, which establish minimum current good manufacturing practices applicable to human drugs, require manufacturers to control all aspects of the processes and procedures by which drugs are manufactured in order to prevent the production of unsafe and ineffective products.

 

According to the complaint, t he deviations observed by FDA during the November – December 2011 inspection were similar to deviations observed by FDA during its many previous inspections of Ben Venue’s facility.   During FDA’s May 2011 inspection, FDA documented 48   deviations from current good manufacturing practices including an inadequate quality control unit, inadequate and untimely investigations, inadequately designed aseptic processing areas, poor employee aseptic practices, failure to prevent microbial contamination of drug products purporting to be sterile and failure to determine the root cause for microbial contaminants.

 

As described in the complaint, FDA’s long inspection and regulatory history of Ben Venue, including 35 inspections since 1997, and approximately 40 recalls since February 2002 associated with drugs manufactured at the Ben Venue facility (including 10 recalls in 2011 and 10 recalls in 2012), reflects a continuing pattern of significant deviations from current good manufacturing practices with its drugs.  Some recalls involved drugs contaminated with glass and other particulates.   Additional recalls were based on the company’s inability to assure the drug’s sterility.   Of the roughly 40 recalls, nine were classified by FDA as “Class I,” meaning that FDA determined that there was “a reasonable probability that the use of . . . a violative product will cause serious adverse health consequences or death.”

 

The consent decree entered resolves the complaint by requiring Ben Venue to take a wide range of actions to correct its violations and ensure that they do not happen again.  The injunction establishes a series of steps which must occur before Ben Venue can fully resume operations, including the retention of an expert to inspect the company’s facility, the development and then implementation of a remediation plan, and an inspection by FDA to confirm that the company’s manufacturing processes are fully compliant with the law.

 

“This consent decree restricts Ben Venue from manufacturing and distributing certain drugs until the company fully complies with the law,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division.  “As this case demonstrates, the Department of Justice and FDA will work together to protect the health and safety of Americans by making sure that those who produce and distribute prescription drugs follow the law.”

“This resolution comes following nearly three dozen inspections which revealed inadequate quality control, including contaminated drugs, and led to approximately 40 recalls on products from this facility alone,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “The Justice Department and the Food and Drug Administration will continue to place its highest priority on protecting consumers.”

 

Under the decree, Ben Venue may continue to manufacture and distribute a subset of their drugs (listed on Attachment A to the decree), which FDA has determined are currently in shortage (domestically or abroad) or are vulnerable to shortage.   However, prior to distribution of each batch of these drugs, the company’s expert must conduct a batch-by-batch review and certify that no deviations occurred during the manufacture of the drug that would adversely affect the safety or quality of the batch.

 

Principal Deputy Assistant Attorney General Delery thanked the FDA for referring this matter to the Department of Justice.  Jeffrey Steger, Assistant Director of the Consumer Protection Branch of the Justice Department and Michele Svonkin, Counsel at FDA’s Office of the Chief Counsel, brought this case on behalf of the United States.

Guest Columnist Al Scott, CFE: Emerging Health Care Fraud: China tackles emerging health care fraud (Part 2 of 2)

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In part 2 of 2 parts, Guest Columnist Al Scott, CFE, principal for NSD Bio Group LLC in Philadelphia, Pa., describes Chinese emerging enforcement approaches.

Jan-Feb ’13 Fraud Magazine Rx for Fraud column – Emerging Health Care Fraud in China (part 2 of 2)

In part 1 of 2 parts, Al described lesser-known but emerging health care frauds, including schemes involving fraudulent treatments, cures and devices, and crimes involving the manufacture, sale or distribution of unapproved FDA-regulated products.

Nov-Dec ’12 Fraud Magazine Rx for Fraud column – Emerging Health Care Fraud

 

The opinions expressed in this column aren’t necessarily those of GeyerGorey LLP.  Special thanks to Fraud Magazine for authorizing us to republish Al’s work— ed.

 

Four Sentenced to Prison in Florida Community Mental Health Center Case

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The owners of three Miami-area assisted living facilities and an affiliated psychologist were sentenced to prison today in connection with a health care fraud scheme, involving now-defunct Miami-area health provider Health Care Solutions Network Inc. (HCSN), in which Medicare was billed for mental health treatments that were unnecessary or not provided.

The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

U.S. District Judge Cecilia M. Altonaga sentenced Serena Joslin, 32, of Looneyville, W.Va., to 63 months in prison, following her previous guilty plea to conspiracy to commit health care fraud.  Raymond Rivero, 55, Daniel Martinez, 46, and Ivon Perez, 50, all of Miami, were each sentenced to 28 months in prison.  All three had previously pleaded guilty to conspiracy to violate the anti-kickback statute.

According to court documents, HCSN operated community mental health centers both in Miami and North Carolina, including partial hospitalization programs (PHP) – a form of intensive treatment for severe mental illness.  HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not provided.

In Miami, HCSN obtained beneficiaries by paying kickbacks to owners and operators of assisted living facilities (ALF) or by otherwise recruiting them from the facilities and from nursing homes.  Rivero, Martinez and Perez admitted during their guilty pleas to referring Medicare beneficiaries to HCSN in exchange for cash bribes.  Rivero, former owner of Miami-based God Is First ALF; Martinez, former owner of Homestead, Fla.-based Mi Renacer ALF; and Perez, former owner of Homestead-based Kayleen and Denis Care Corp., are no longer permitted to operate such facilities as a condition of their guilty pleas.

According to court documents, ALF residents referred to HCSN by Rivero, Martinez and Perez were not qualified to be placed in PHP and were only selected because they had Medicare or state of Florida Medicaid benefits.  In some cases, ALF patients suffered from dementia, Alzheimer’s disease or mental retardation, or were otherwise unable to benefit from mental health services.

According to court documents, Joslin, a licensed psychologist, was hired by HCSN in North Carolina in April of 2010 as a clinical coordinator and later promoted to clinical director. In those roles, she conspired with other HCSN employees to fabricate medical documents to substantiate alleged PHP treatment that was medically unnecessary and, in many instances, not even provided to the beneficiaries.  Joslin admitted that many of the HCSN patients were unqualified for the PHP program because they suffered from conditions such as mental retardation and dementia, and that she directed therapists to fabricate medical records to support HCSN’s fraudulent billing to the Medicare program.  Joslin was also required to surrender her North Carolina license to provide mental health treatment as part of her plea agreement.

According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.

In addition to the prison terms, Judge Altonaga sentenced Joslin, Rivero, Martinez and Perez each to serve three years of supervised release, and ordered them to pay $4,464,728; $90,896; $76,358; and $89,245 in restitution, respectively.

The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section.  The cases were investigated by the FBI and HHS-OIG and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Former Miami Clinic Director Sentenced to 70 Months in Prison for Role in HIV Infusion Fraud Scheme

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A former Miami HIV infusion clinic director was sentenced today to serve 70 months in prison for his role in a $26.2 million HIV infusion fraud scheme, announced Assistant Attorney General Lanny Breuer of the Criminal Division, U.S. Wifredo A. Ferrer of the Southern District of Florida, Acting Special Agent in Charge  Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
Enrique Gonzalez, 67, formerly of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida.  In addition to his prison term, Judge Altonaga sentenced Gonzalez to serve three years of supervised release and ordered him to pay $17,590,896 in restitution to HHS.

On Nov. 13, 2012, Gonzalez pleaded guilty to one count of conspiracy to defraud the United States, to cause the submission of false claims, and to pay health care kickbacks, and one count of conspiracy to commit health care fraud.

Gonzalez admitted that between August 2002 and March 2004, he conspired with co-defendant Ronald Harris, a Miami physician, and alleged co-conspirators to operate Physicians Med-Care and Physicians Health (together the “Physicians Clinics”), two Miami HIV infusion clinics.  According to court documents, the Physicians Clinics were owned and controlled by alleged co-conspirators Carlos Benitez and his brother Luis Benitez.  The Physicians Clinics purported to specialize in treating patients with HIV, but were operated for the sole purpose of committing Medicare fraud, according to court documents.  Gonzalez was a director of Physicians Med-Care and, at the direction of his co-conspirators, was responsible for the finances of the Physicians Clinics.

Gonzalez admitted that he agreed with his co-conspirators to handle the finances for the Physicians Clinics, moving the money paid by the Medicare program out of the Physicians Clinics’ accounts and into accounts owned and controlled by his co-conspirators.  According to court documents, Harris signed blank checks that Gonzalez used to transfer funds to various Benitez-owned entities and others, as directed by his co-conspirators.  In addition, Gonzalez agreed to provide cash to various co-conspirators at the Physicians Clinics to be used to pay bribes and kickbacks to the Medicare beneficiaries in return for those beneficiaries allowing the Physicians Clinics to bill the Medicare program for HIV infusion services that were not medically necessary and often not provided.

Gonzalez admitted that during his association with Physicians Med-Care, the clinic billed the Medicare program approximately $24.5 million in HIV infusion therapy claims, for which the clinic received $16.7 million in payments.  Gonzalez also admitted that during his time with Physicians Health, the clinic billed Medicare approximately $1.7 million and received approximately $800,000 in payment from the Medicare program for fraudulent services.

Gonzalez was a fugitive from justice from the time of his indictment in 2008, until he was located and detained in Peru in late 2011.  Gonzalez was extradited to the United States in July of 2012.  Gonzalez’ daughter, Carmen Gonzalez, was indicted in a related case and is currently a fugitive.

Co-defendant Harris pleaded guilty on Aug. 26, 2008, to one count of conspiracy to defraud the United States, to cause the submission of false claims and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims to the Medicare program.  Harris pleaded guilty in connection with his role as the medical director for the Physicians Clinics.  On Nov. 4, 2008, Harris was sentenced to serve 84 months in prison for his role in the scheme.

Carlos and Luis Benitez and Thomas McKenzie were charged separately with health care fraud and money laundering crimes in an indictment unsealed on June 11, 2008.  According to the separate indictment, the defendants provided the money and staff necessary to open the Physicians Clinics, the Medicare patients that the clinics needed to bill the Medicare program and transportation for the HIV patients who visited the clinics.  Carlos and Luis Benitez and McKenzie were charged for their role in committing approximately $109 million in HIV infusion fraud and money laundering through the Physicians Clinics and nine other HIV infusion clinics.

On Sept. 18, 2008, McKenzie pleaded guilty to one count of conspiracy to commit health care fraud and one count of submitting false claims to the Medicare program, and admitted to his role in a $119 million HIV infusion fraud scheme.  On Dec. 18, 2008, McKenzie was sentenced to serve 14 years in prison.

Carlos and Luis Benitez are also fugitives.  Anyone with information regarding the whereabouts of the fugitives is urged to contact HHS-OIG fugitive reporting phone line at 888-476-4453.

The defendants who have not been convicted are presumed innocent unless and until proven guilty.

The Physicians Med-Care and Physicians Health case is being prosecuted by Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section.  The case was investigated by the FBI and the DHS Office of Inspector General.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  The Department also thanks the Peruvian National Police Interpol Unit for their assistance.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.