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When Healthcare Fraud Becomes a Criminal Offense

8/13/2015

Exploring the Factors that Turn an Overbilling Dispute into a Lengthy Prison Sentence

Every day I read the press releases from healthcare fraud prosecutors around the country describing how some cases settle for millions of dollars with no criminal charges, while other cases result in lengthy prison sentences even though much less money was involved. Two cases that came to my attention today illustrate when and how a healthcare fraud dispute becomes a criminal offense.

The first case involves a former chiropractor who was accused of submitting a little more than $180,000 in false claims. He was sentenced to 44 months in prison and an additional three years of supervised release after pleading guilty to health care fraud. He was also ordered to pay $183,674.14 in restitution.

As far as health care frauds go, this one did not involve a tremendous amount of money. There were several factors, however, that made this a criminal case.

First, the former chiropractor was already serving 60 months in prison on charges of domestic abuse and battery involving strangulation.

Second, the former chiropractor was accused of billing for chiropractic services, back braces, and X-rays that he did not actually provide to patients.

Third, the former chiropractor was accused of inducing patients to agree to an expensive test that they did not want or need by agreeing to reduce or eliminate their co-payment if they agreed to let him perform the test.

Fourth, the former chiropractor was accused of fraudulently billing for services using physician provider numbers without authorization, or on days when the physicians were not working in his clinic.

In contrast, a second case that came to my attention involved an $8 million settlement of false claims that will result in no criminal prosecution at all if the defendant complies with the terms of a deferred prosecution agreement.

An OB/GYN in New York was accused of submitting more than $8 million in false claims to Medicare by billing for services provided by unlicensed and unsupervised staff. Instead of going to prison, however, this physician was able to negotiate a deferred prosecution agreement.

Under the agreement, the physician will pay back the disputed amount and will retain an independent billing monitor to oversee the billing in his practice. If he complies with the terms of the deferred prosecution agreement for a period of two years, the prosecutors agree to drop the criminal charge against him.

Unlike the chiropractor in the first case, the OB/GYN did not have any other criminal problems and was not billing for services that were not provided or that were not medically necessary. By retaining an experienced Medicare fraud criminal defense attorney early in the process, he was able to highlight these facts and others to prosecutors, with a very favorable result.

John Howley, Esq.
(212) 601-2728

Felony Charges for Personal Care Attendant Medicaid Fraud

12/25/2013

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A personal-care attendant was arrested and charged with felonies after an investigation by the Attorney General’s Medicaid Fraud Control Unit for submitting false claims to Medicaid for services that were never provided.

The woman had worked as a personal-care attendant for a Medicaid beneficiary. She was caught when the patient’s spouse told investigators that the woman had stopped assisting the beneficiary and no longer lived in the area.

A felony is a very serious crime that carries a penalty of one year or more in prison. Conviction of a felony charge also results in immediate exclusion from Medicaid, Medicare and other government healthcare programs. You almost always lose your professional license as well.

In this case, the personal-care attendant was able to avoid prison by entering into a plea agreement. After pleading guilty to one count of Medicaid Fraud, she was sentenced to five years of probation, fined almost $30,000, and ordered to pay restitution of $9,468.48 to the Medicaid program.

If you are under investigation for Medicaid fraud, or if you have been charged with a crime, then you need to consult with an experienced Medicaid fraud defense attorney immediately to protect your rights. For a free initial consultation, call John Howley, Esq. at (212) 601-2728.

John Howley, Esq.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact our law offices and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. I practice law and offer legal services only in jurisdictions where I am properly authorized to do so. I do not seek to represent anyone in any jurisdiction where this web site does not comply with applicable laws and bar rules.

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Medicare Fraud Strike Force Goes After Home Healthcare Fraud

8/26/2013

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A patient recruiter and the owner of a home healthcare staffing company face up to 10 years in prison after pleading guilty to a conspiracy to commit health care fraud.

The guilty pleas were the result of an investigation by the federal Medicare Fraud Strike Force. The Strike Force is an inter-agency effort to investigate and prosecute Medicare fraud across the country.

In this case, the investigation was conducted jointly by the Federal Bureau of Investigation (FBI) and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).

The patient recruiter pleaded guilty to supplying Medicare patients to a now defunct home healthcare agency that billed Medicare for expensive physical therapy and home health care services that were not medically necessary and/or were not provided.

As part of the scheme, the patient recruiter paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for prescriptions, medical certifications, and other documentation. The patient recruiter used the false medical records to bill Medicare for home health care services and physical therapy that had not been provided and/or were not medically necessary.

The government alleges that Medicare paid approximately $7 million based on fraudulent claims for home health care services that were not medically necessary and/or not provided.

When the government investigates and prosecutes Medicare fraud, it has tremendous resources at its disposal.

If you are under investigation or have been charged with a crime, then you should consult with an experienced Medicare and Medicaid fraud defense attorney immediately to protect your rights, your livelihood, and your freedom.

Call John Howley, Esq. at (212) 601-2728 to arrange a free and confidential consultation.

John Howley, Esq.

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Change of Residence Results in Medicaid Fraud Charges

7/12/2013

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A woman from Lake George, New York, has been charged with Medicaid fraud because she allegedly continued to receive Medicaid benefits from New York State after moving to Massachusetts.

The woman was arrested and charged with fourth-degree grand larceny, a felony that carries a possible prison sentence of more than one year, and fifth-degree health care fraud, a misdemeanor.

A government press release said the woman was arrested after she moved back to New York State recently. She is accused of receiving Medicaid benefits from New York State for three months when she lived in Massachusetts.

This case should be watched carefully because of the relatively short time she spent outside New York State. New York courts have held that individuals and their families do not automatically lose their New York residence status for Medicaid eligibility purposes merely by leaving the state, even if they remain outside the state for a substantial period of time.

If you are under investigation for Medicaid fraud or have been charged with a crime, then you should consult with an experienced Medicaid fraud attorney immediately to protect yourself.

To arrange a free and confidential consultation, call John Howley, Esq. at (212) 601-2728.

John Howley, Esq.

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What is Medicaid Eligibility Fraud?

7/11/2013

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Every year, the Bureau of Fraud Investigation conducts investigations and interviews of more than 5,000 New York City residents about their eligibility for Medicaid.

Your first notice of the investigation is usually a letter from the NYC Human Resources Administration asking you to bring your tax returns and other documents to an “interview” at 151 West Broadway in lower Manhattan.

By the time you receive this letter, the Medicaid fraud investigator has already conducted an investigation. They know where you live, who you live with, where you work, and whether you own a home or a car.

They also have all your applications and re-certifications for Medicaid. If the information they have gathered in their investigation is different than what you put on your application and re-certification forms, then you could have a very serious problem.

You should get advice from an experienced Medicaid fraud attorney. Your lawyer can help you present your case and negotiate a resolution in an effort to avoid criminal charges.

The most common types of Medicaid eligibility fraud include:

Your Income: Your eligibility for Medicaid, Family Health Plus, and Child Health Plus is based on your monthly income. If your income exceeds the eligibility levels for these programs, then you are not eligible to receive benefits.

Understating your income, or failing to disclose income from a spouse or rental property, is a type of Medicaid fraud. It can result in a lawsuit against you for restitution – that is, the City can sue you to pay back all the benefits you received. Misrepresenting your income can also result in criminal charges being filed against you.

The Bureau of Fraud Investigation has a number of ways they can discover what your actual income is. Sometimes they ask your employer for payroll records without telling you. other times they infer what your income must be based on your expenses. For example, if you wrote that your income was only $1,000 per month, but public records show that you are paying a $2,500 per month mortgage, then they will infer that your income must be more than what you said it was.

Your Residence: Eligibility for Medicaid and Family Health Plus is based on where you live. If you are receiving these benefits through the New York City Human Resources Administration, then you must be a New York City resident.

People sometimes move out of New York City and fail to change their address for their Medicaid and Family Health Plus benefits. This creates a problem.

Even if your income is still below the eligibility levels for Medicaid where you live, you do not qualify for benefits from New York City. You may be asked to pay back thousands of dollars and, in some cases, tens of thousands of dollars. And if you lied about where you lived on your application or re-certification forms, you could face criminal charges.

Home and Asset Ownership: If you applied for Medicaid or Family Health Plus before 2010, then you were required to disclose if you owned or home or had other assets such as bank or investment accounts. Failing to disclose your assets, or understating their value, can constitute Medicaid eligibility fraud.

After 2010, your eligibility was determined only by looking at your monthly income. But the investigators still may want to know if you own a home. As mentioned above, your ability to pay a mortgage may raise questions about what your actual income is.

Employer Health Insurance: Your eligibility for Medicaid and Family Health Plus is also affected by your ability to obtain health insurance from your employer.

The application and re-certification forms for Medicaid and Family Health Plus ask whether you are able to obtain health insurance through your employer or your spouse’s employer. Providing a false answer to that question may constitute Medicaid eligibility fraud, even if you never actually received medical benefits from an employer.

Here’s the bottom line: Medicaid fraud is a serious offense. You could face lawsuits to recover money from you and even criminal charges. A letter from an investigator, therefore, should be taken seriously and should not be ignored.

To arrange a free and confidential consultation with an experienced Medicaid fraud attorney, call John Howley, Esq. at (212) 601-2728.

John Howley, Esq.

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Home Health Care Fraud Report Shows Need for Whistleblowers

8/27/2012

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A new government study reports that Medicare is paying for home health care services under circumstances suggesting fraud, waste, and abuse. This is no small matter. Medicare pays nearly $20 billion per year to home health care agencies for services provided to 3.4 million beneficiaries.

The latest study by the Office of the Inspector General (OIG) of the Department of Health and Human Services compared Medicare claims for home health care services with claims for inpatient hospital and skilled nursing facility services for the same patients. The results were shocking. The OIG study found numerous instances where:

claims were made to Medicare for home health care services and for inpatient hospital stays for the same patients at the same time
claims were made to Medicare for home health care services and for skilled nursing facility stays for the same patients at the same time; and
claims were made to Medicare for home health care services allegedly provided after the patient’s date of death.

If that isn’t enough to make your blood boil, here’s the real shocker. Looking at larger trends, the OIG study found that 25% of home health care agencies – that is one out of every four – exhibited a pattern of unusually high billing under at least one category that OIG uses to identify questionable billing practices.

Billing patterns, of course, are only a starting point. Billing patterns may be an indication of Medicare fraud, or they may be the result of a legitimate home health care agency with a high number of patients needing a particular type of treatment. Often, the only way to tell the difference is by talking with the people who actually work for the home health care agency.

That is why the government pays very large rewards to health care workers and others who help uncover Medicare fraud.

Under the False Claims Act, a whistleblower can be paid between 15% and 30% of the amount the government recovers in a lawsuit against a company engaged in Medicare fraud. And because the government is able to recover three times the amount that was paid going back six to ten years, that reward can add up to hundreds of thousands, and sometimes millions of dollars.

If you are aware of false claims being made to Medicare or Medicaid, then you should consult with an experienced lawyer immediately. To schedule a free and confidential consultation by telephone or in person, call my office today at (212) 601-2728 or click here to communicate with me via email.

John Howley
New York, New York

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Physician Leases Lead To $1.3 Million Stark Law Settlement

8/24/2012

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Memorial Health Care System has agreed to pay $1.3 million to settle allegations that certain financial arrangements with physicians violated the Ethics in Patients Referrals Act (the “Stark law”), the Anti-Kickback Statute, and resulted in the submission of false claims to the Medicare system.

According to a press release issued by the hospital, an internal investigation disclosed that it “had lease arrangements with physicians and physician groups that may have been out of compliance with the federal Stark law.” Upon evaluating the lease arrangements as part of its ongoing compliance program, the hospital determined that the arrangements “did not reflect the true market value of office space leased to physicians or physician groups as the law requires.”

The hospital corrected the problem and notified the government, which, unknown to the hospital, was already conducting an investigation into the matter.

The Stark law prohibits a physician from referring Medicare or Medicaid patients for designated health services to entities with which the physician has a “financial relationship,” unless an exception or safe harbor applies. A “financial relationship” may include an office lease with a hospital.

Under the law’s “safe harbor” provision, however, a full-time lease agreement between a physician and a provider to whom the physician refers patients will not result in a violation if the agreement: (a) is set out in writing and signed by the parties; (b) covers all of the premises rented by the parties; (c) is for a term not less than 1 year; (d) has an aggregate rental charge set in advance, is consistent with fair market value in arm’s length transactions, and does not take into account the volume or value of Federal health care program referrals; and (e) the aggregate space rented does not exceed the space that is reasonably necessary to accomplish the commercially reasonable business purpose of the rental.

If you are unsure whether your leases and other financial relationships are appropriate, or if you are under investigation for possible Stark Law violations, then you should consult with an experienced lawyer immediately. To schedule a free and confidential consultation by telephone or in person, call my office today at (212) 601-2728 or click here to communicate with me via email.

John Howley
New York, New York

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Dickensian Healthcare Tragedies: Fraud Investigations Target Individual Recipients Too

5/12/2012

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Mention the words "Medicaid Fraud Investigation" to most people and they immediately envision FBI agents going after a large enterprise of greedy and sophisticated healthcare providers engaged in a complex scheme to manipulate the diagnostic codes used to claim payments.

But sometimes it's just the tragedy of a desperate older woman making a huge mistake after falling through the cracks of our very complicated healthcare payments systems.

This week a sheriff in Hamilton County, Tennessee arrested a 58 year old woman for using someone else’s benefits to pay for prescription drugs, including medications to treat high blood pressure, high cholesterol, type-2 diabetes and ulcers.

She was charged with 24 counts of fraud. If convicted, she will face a maximum sentence of up to 2 years in prison per charge.

This is a very sad case. While the government's press release refers to unspecified "muscle relaxers," the other medications involved are not the types of drugs used by addicts or sold on the street for a profit. Someone who steals medications for high blood pressure, high cholesterol, type-2 diabetes and ulcers is most likely an individual with potentially life threatening heart disease, diabetes, and other illnesses.

What if this is a woman who desperately needs medications that she cannot afford, who is a couple of years shy of qualifying for Medicare, and who either does not qualify for or needs help applying for Medicaid?

Desperation is not a justification for fraud, so we cannot pretend that this woman did nothing wrong. At the same time, it appears that this woman may have fallen through the cracks of a complex healthcare system that enriches many (thanks to government programs, the healthcare industry is adding jobs and increasing profits despite the lingering effects of the Great Recession) while not reaching many who desperately need it.

Dickens himself would probably see both the tragedy and the irony of what may happen next. If this woman is sent to prison and she really does have heart disease and type-2 diabetes, then the state will be required to pay for her medications.

John Howley, Esq.
New York, New York

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Home Health Care Fraud in Detroit Covers All the Bases

5/9/2012

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Claims for Care Never Provided, Payments to Patients to Create False Records, Unlicensed Doctors, and Money Laundered Through Sham Companies

Two Detroit-area residents have pleaded guilty to participating in a $13.8 million home health care fraud and money laundering scheme that sounds like a case study of the different types of healthcare fraud that can occur.

The defendants and co-conspirators owned or controlled four different home health care agencies that billed Medicare for home health visits that never occurred. Payments were made to various medical professionals, including doctors, nurses, physical therapists and physical therapy assistants, to create fictitious patient files to document purported home health services that were never provided. One of the defendants, a physical therapy assistant, also signed fictitious patient files in which physical therapy services were documented, but never actually provided.

Kickbacks were paid to recruiters who obtained beneficiaries’ information and used the information to submit claims for home health services that were never provided. The beneficiaries sometimes pre-signed forms and visit sheets that were later falsified to indicate that they received home health services that were never provided. Other times, the beneficiaries’ signatures were forged on forms and visit sheets.

At least one shell company was incorporated for the purpose of laundering the proceeds of health care fraud, which were obtained through the submission of false and fraudulent claims to Medicare.

Other corporations were formed that employed individuals who claimed to be doctors, but, in fact, were not licensed in the state to perform any medical services. The unlicensed doctors met with and purported to examine Medicare beneficiaries for home health care services. In fact, the patients were not examined, nor were they homebound. Many of the beneficiaries were paid to pre-sign patient visit forms and did not receive home health services at all.

Click here to read the full press release from the U.S. Department of Justice.

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John Howley, Esq.
The Howley Law Firm P.C.
350 Fifth Avenue, 59th Floor
New York, New York 10118
(212) 601-2728

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THIS BLOG PROVIDES GENERAL INFORMATION. IT DOES NOT PROVIDE LEGAL ADVICE. YOU SHOULD CONSULT A LAWYER TO OBTAIN LEGAL ADVICE REGARDING YOUR INDIVIDUAL SITUATION.

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