Healthcare Fraud

On June 22, 2016, the Justice Department announced it had charged a record 301 people with schemes that defrauded government health programs by submitting $900 million in fraudulent health claims. A nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes.

The defendants are charged with numerous healthcare fraud-related crimes, including conspiracy to commit healthcare fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment and prescription drugs.

It's the largest takedown in history, both in terms of the number of people charged and the loss amount.

The Medicare Fraud Strike Force swept through territories that included that state of Florida, Texas, California, Michigan, Illinois, New York, and Louisiana.

A settlement has been reached to resolve False Claims Act allegations against Saint Michael’s Medical Center Inc.

The allegations arose from a lawsuit that claimed Saint Michael’s Medical Center falsely billed Medicare and Medicaid for medically unnecessary cardiac procedures.

Saint Michael’s Medical Center, from January 1, 2009, through January 1, 2015, submitted claims for percutaneous coronary interventions, catheterizations, and stents performed in its cardiac catheterization lab that was not medically needed.

The allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.

On May 2, 2016, Attorney General Schneiderman announced that New York’s Medicaid program will receive over $7.7 million from a settlement reached to resolve False Claims Act Allegations against Olympus Corporation. The allegations arose by a lawsuit claiming Olympus, a subsidiary of Olympus Corporation of Japan, which is headquartered in Center Valley, between January 1, 2006 and December 31, 2011 paid illegal kickbacks to healthcare providers.

Olympus used financial incentives to persuade healthcare providers to buy a variety of endoscopes and other surgical equipment manufactured by Olympus.  These financial incentives allegedly took the form of grants, fellowships, consulting payments, free trips, no charge loans for equipment along with other incentives.

The national settlement is $306 million, with the New York Medicaid Program receiving over $7.7 million dollars in damages.

On Friday, Department of Justice announced, Carlos Rodriguez Nerey, a patient recruiter for numerous Miami-area home health agencies was convicted for his role in a fraud and kickback scheme that resulted in the submission of millions of dollars in false and fraudulent claims to Medicare.

Mr. Nerey was convicted of one count of conspiracy to defraud the United States and pay and receive health care kickbacks and one count of receiving health care kickbacks.

The allegations arose from a lawsuit, alleging Mr. Nerey claimed to work at a staffing company called Sweet Life Staffing Inc. but was in fact a patient recruiter for D&D&D Home Health Inc and Mercy Home Care Inc, two fraudulent home health care agencies in Miami. 

Evidence proved Carlos Rodriguez Nerey worked for numerous fraudulent home health care companies before he began accepting kickbacks from D&D&D Home Health Inc and Mercy Home Care Inc. 

Mr. Nerey developed a shell company for the purpose of accepting kickbacks from for D&D&D Home Health Inc and Mercy Home Care Inc and received nearly $250,000 for his role in the scheme.

Medicare paid over $2 million to D&D&D Home Health Inc and Mercy Home Care Inc for those claims.

On April 1, 2016, Department of Justice announced, Sharon Iglehart, a former attending psychiatrist at Riverside General Hospital of Houston was convicted of one count of conspiracy to commit health care fraud, one count of health care fraud and three counts of making false statements relating to health care matters. The judge also ordered Sharon Iglehart to pay $6,363,528.82 in restitution and to forfeit the same amount.

The allegations arose from a lawsuit, claiming from 2006 until June 2012, Sharon Iglehart and others engaged in a scheme to defraud Medicare by submitting through Riverside approximately $158 million in false and fraudulent claims to Medicare for partial hospitalization program services, an intensive outpatient treatment for severe mental illness. 

Evidence proved that many of the Medicare beneficiaries did not receive partial hospitalization program services. The majority of the Medicare beneficiaries hardly ever saw a psychiatrist and did not receive intensive psychiatric treatment at all. Sharon Iglehart personally billed Medicare for individual psychotherapy, along with other treatments that were never provided and falsified the medical records of patients to make it appear as if she provided psychiatric treatment.

A total of twelve other individuals have also been convicted for their roles in this scheme. 

A settlement has been reached to resolve False Claims Act allegations against Respironics Inc.

The whistleblowers' share of the settlement will be $5.38 million.

On March 23, 2016, Department of Justice announced, that Respironics Inc was providing free services to durable medical equipment (DME) suppliers to persuade them to purchase Respironics masks that treat sleep apnea.  Respironics allegedly provided DME companies with call center services to meet their patients’ resupply needs at no charge as long as the patients were using masks that Respironics manufactured; otherwise, the DME companies would have to pay a monthly fee based on the number of patients who used masks manufactured by a competitor of Respironics.  The government alleged that the conduct began in April 2012 and continued until November 2015.

Respironics Inc will pay approximately $34.14 million to the federal government and approximately $660,000 to numerous state governments based on their involvement in the Medicaid program.

A settlement has been reached to resolve False Claims Act allegations against Cardiovascular Systems Inc.

The allegations arose from a lawsuit, which was filed July 2013, claiming that Cardiovascular Systems persuaded physicians to use its products by offering free, all-expense-paid training programs “followed by explicit demands by CSI employees that attendees use CSI products on future patients,” giving away product for free, 3rd-party referral channel marketing, and “sham Speaker Bureau payments for high-prescribers and others whom CSI sought to cultivate,” according to the complaint filed in the U.S. District Court for Western North Carolina.

Cardiovascular Systems was also accused of running an off-label promotion scheme to push sales of its unapproved 4 French catheter.

These allegations were brought forward by a former employee of Cardiovascular Systems Inc.

A settlement has been reached to resolve False Claims Act allegations against 21st Century Oncology.

The whistleblowers' share of the settlement will be $7 million.

The allegations arose from a lawsuit, claiming that 21st Century Oncology performed and billed for procedures that were not medically necessary.

On March 8, 2016, the Department of Justice announced, that the defendants intentionally and improperly billed for this procedure under circumstances where the procedure served no medically appropriate purpose.  The government alleged that the procedure was performed by physicians and physicists at 21st Century Oncology locations who were not properly trained to interpret and utilize the Gamma function results.  The government also alleged that the defendants billed for this procedure when no physician reviewed the Gamma function results until seven or more days after the last day patients received radiation treatment therapy.  Finally, the government alleged that the defendants billed for the procedure when no Gamma result was available due to technical failures in the imaging equipment.

In December 2015, 21st Century Oncology LLC, a wholly owned subsidiary of 21st Century Oncology Inc, paid $19.75 million to settle allegations that 21st Century Oncology LLC billed federal healthcare programs for laboratory tests that were not medically necessary.  The company also allegedly offered bonuses to physicians who ordered unnecessary test. 

A settlement has been reached to resolve False Claims Act allegations against Recovery Home Care Inc and Recovery Home Care Services Inc.

The whistleblowers' share of the settlement will be $315,000.

The allegations arose from a lawsuit, claiming Recovery Home Care Inc and Recovery Home Care Services Inc (collectively RHC) paid illegal kickbacks to doctors who agreed to refer Medicare patients to RHC for home health care services. 

According to the Department of Justice, from 2009 through 2012, RHC allegedly paid dozens of physicians thousands of dollars per month to serve as sham medical directors who supposedly conducted quality reviews of RHC patient charts. The physicians in many instances performed little or no work, but nevertheless received thousands of dollars from RHC.  The government’s complaint contended that these payments were kickbacks intended to induce the physicians to refer their patients to RHC.

On March 9, 2015, a settlement was also reached for $1.1 million with RHC’s purchaser, National Home Care Holdings.

Olympus Corporation will pay $646 million to resolve United States probes into kickbacks that it paid to doctors in the United States and funneled into bribes in Central and South America.

Olympus Corporation United States unit will pay $623.2 million in the kickback case and its Latin American medical business will pay $22.8 million to resolve a criminal case involving $3 million in illicit payments to government health-care providers in Brazil, Bolivia, Columbia, Argentina, Mexico and Costa Rica.

The kickback case involved an investigation of Olympus Corporation's financial relationship with medical business customers and doctors. The investigation was brought forward by a former employee.

The whistleblowers' share of the settlement will be $51.1 million.