Gwendolyn Gibbs, the owner of the Houston-based Daybreak Rehabilitation Center, has been sentenced to 84 months in federal prison and ordered to pay $8.68 million in restitution to Medicare for conspiracy to commit healthcare fraud. Gibbs fraudulently billed Medicare for unnecessary mental health services provided to vulnerable adults with intellectual disabilities. From 2007 to 2016, she submitted fraudulent claims for partial hospitalization program (PHP) services, falsified medical records, and paid kickbacks for patient referrals. Charles Guidry Jr., a manager at Daybreak and Gibbs’ ex-husband, was previously sentenced to 70 months imprisonment for his involvement. Gibbs will remain in custody until her transfer to a U.S. Bureau of Prisons facility. Source: Press Release.
Tag: Fraud & Abuse
Summary of article from mytexasdaily.com:
Gwendolyn Gibbs, the 72-year-old owner of a Houston-based mental health clinic, has been sentenced to seven years in federal prison for a healthcare fraud scheme. Gibbs pleaded guilty to conspiracy to commit healthcare fraud in December 2021 and was ordered to pay over $8.6 million in restitution to Medicare. The court found that Gibbs had fraudulently billed Medicare for services provided to adults with intellectual disabilities who did not require mental health services, from 2007 to 2016. She admitted to falsifying medical records and paying kickbacks for patient referrals. The case was investigated by multiple agencies, including the FBI and the Department of Health and Human Services.
From Bloomberg Law, by Daniel Seiden:
The Covid-19 Fraud Enforcement Task Force has reported that over $100 million has been reclaimed by the US government through False Claims Act (FCA) cases related to pandemic fraud. These funds have been recovered from more than 400 settlements and judgments, including cases of Paycheck Protection Program fraud, Economic Injury Disaster Loan fraud, health-care fraud, and agricultural program fraud. The report indicates a steady rise in new whistleblower actions under the FCA alleging pandemic relief fraud from 2020 to 2023. In 2023 alone, the Department of Justice (DOJ) recovered a record $2.68 billion from 543 FCA settlements and judgments.
From Holland & Hart, by Kim Stanger:
Although often well-intentioned, offering free or discounted items or services to patients (e.g., gifts, rewards, writing off copays, free screening exams, free supplies, etc.) may violate federal and state laws governing improper inducements, especially if the patient is a federal program beneficiary. The government is concerned that offering or rewarding such inducements to patients may result in overutilization, biased decisions concerning care, and increased costs to the Medicare, Medicaid, or other government programs. Penalties for illegal inducements may include administrative, civil, and criminal penalties; repayment to government programs; and exclusion from federal programs. Increasingly, private payors are also challenging such inducements. It is imperative that healthcare providers and their staff understand the applicable laws and limits.
From D Magazine, by Will Maddox:
A pharmaceutical kickback scheme in the Northern District of Texas has led to the indictment of 14 people, including several podiatrists, local businessmen, and executives at Next Health, a healthcare holding company. The scheme involved physicians receiving bribes and kickbacks from pharmacies for referring prescriptions to be filled at those pharmacies, with payments being proportional to the number of prescriptions received.
The scheme, which began in 2014, was concealed through complex business arrangements and involved multiple entities. Payments were funneled through management service organizations (MSOs) and a company called Med Left, which was used to conceal and funnel bribes from the pharmacies to the physicians.
The kickbacks were often disguised as legitimate returns on investments in the pharmacies. Physicians would purchase a percentage of the pharmacy for a nominal fee and were required to refer prescriptions to the pharmacy for ownership. The profits from these prescriptions were then shared with the prescribing doctors.
The owners of Next Health, Andrew Hillman and Semyon Narosov, previously pleaded guilty to charges connected with the scheme in 2018 and were sentenced to several years in prison. Ten physicians, including podiatrists, orthopedic surgeons, and a gastroenterologist, have been indicted for referring prescriptions to Next Health’s pharmacies and receiving kickbacks.
From Hospice News, by Holly Vossel:
Hospice providers face significant regulatory risks related to False Claims Act (FCA) violations, with potential criminal charges in instances of suspected fraud, waste and abuse. While most FCA cases don’t result in criminal charges, the resolution process can be complex and challenging for providers.
The burden of proof in most civil hospice fraud cases is relatively low, making it easier for the government to establish evidence of wrongdoing. However, the burden of proof in federal criminal fraud investigations is higher, requiring evidence of intent to defraud and willfulness.
Fraud cases can result in severe penalties for hospice owners, including prison sentences, heavy fines, revocation of Medicare certification, and being barred from the industry. An example is the case of Dr. Shiva Akula, former owner of Canon Healthcare, who was convicted for FCA violations totaling nearly $47 million.
Regulatory oversight of the hospice industry has increased due to concerns about fraud, waste, and abuse. This has been driven by the proliferation of new hospices and fraudulent billing practices. The Centers for Medicare & Medicaid Services (CMS) has implemented a “36-month” rule forbidding any change in majority ownership during the 36 months after initial Medicare enrollment.
The hospice industry is experiencing a surge in audit activity, with providers focusing more on documentation to prove patient eligibility and medical necessity of services. While increased audits do not necessarily indicate fraud, a high prevalence of billing errors can signal potential wrongdoing to regulators.
From Medical Xpress, by Florida Atlantic University:
- Medicare is frequently targeted by fraudulent insurance claims, with the estimated annual fraud amounting to over $100 billion. Traditional methods of detecting fraud, which involve manual inspection of claims by a limited number of auditors, are often insufficient due to the volume and complexity of the data.
- A study conducted by the College of Engineering and Computer Science at Florida Atlantic University explored the use of big data and machine learning models to detect Medicare fraud. However, handling imbalanced big data and high dimensionality, where the number of features is extremely high, presents significant challenges.
- The researchers tested two big Medicare datasets, Part B and Part D, using a method called Random Undersampling (RUS) and a novel ensemble supervised feature selection technique. RUS works by randomly removing samples from the majority class until a specific balance between the minority and majority classes is achieved.
- The results showed that the combined use of RUS and supervised feature selection outperformed models that used all available features and data. The best performance was achieved by performing feature selection, then applying RUS. This approach led to data reduction, more explainable models, and significantly better performance.
- The study’s findings could have substantial implications for Medicare fraud detection, offering computational advantages and enhancing the effectiveness of fraud detection systems. If properly applied, these methods could significantly reduce costs related to fraud and improve the standard of health care service.
From Press Release, United States Attorney’s Office, Northern District of Texas:
- A 36-year-old physician’s assistant at a Fort Worth pain management clinic has been convicted of conspiracy to commit health care fraud and 12 counts of healthcare fraud.
- The PA submitted claims to Medicare for injections of unapproved amniotic fluid for pain management.
- Although some amniotic products are FDA-approved for wound care, they are not approved for pain management, making the injections medically unnecessary and non-reimbursable by Medicare.
- He used an amniotic product called “Cell Genuity,” which was not covered by Medicare for either wound care or pain management. He initially asked patients to pay out of pocket for the injections, but many refused due to the high cost and questionable efficacy.
- The PA identified another product, “Fluid Flow,” that he believed could be reimbursed by Medicare. Instead of purchasing this more expensive product, he continued to use Cell Genuity but billed Medicare under Fluid Flow’s unique code. This resulted in significant profits for the clinic and himself.
- The PA now faces up to 240 years in federal prison – 20 years per count.
From Baker Donelson, by Alissa Fleming and Joseph Keillor:
- An Indianapolis-based health system recently settled with the Department of Justice for $345 million due to allegations of Stark Law and False Claims Act violations related to its physician compensation arrangements, highlighting the importance of appropriately structuring physician compensation to avoid fraud and abuse enforcement.
- The health system was accused of providing false information to appraisers, inflating physician salaries, and ignoring warnings about the large discrepancies between high physician compensation and moderate productivity. Additionally, it was alleged that physician compensation was dependent on the volume or value of referrals, which violates Stark Law’s restrictions.
- The actual compensation for many specialties was either fixed guaranteed compensation or wRVU-based compensation for personally-performed services, which under the December 2020 rulemaking, should not violate the Volume/Value element.
- The government argued that exceeding fair market value does not necessarily implicate the “indirect compensation arrangement” definition in place at the time, and that fair market value is only relevant where the parties have implicated a threshold volume/value standard.
- The settlement emphasizes the importance of structuring physician compensation appropriately, with the health system now under a five-year corporate integrity agreement with an independent review organization and a compliance expert. Unsettled claims from the relator are still pending, and attorney’s fees relating to the settled claims may be added to the $345 million settlement.
From HealthPayerIntelligence, Victoria Bailey:
- Cigna’s recent brush with False Claims Act violations serves as a reminder that Medicare Advantage organizations should be routinely assessing their risk and compliance activities.
- The United States alleged that Cigna submitted inaccurate and untruthful patient diagnosis data to receive additional payments from CMS and did not withdraw the inaccurate data or repay CMS.
- Cigna submitted the diagnoses to CMS even though they were not supported by information documented on the vendors’ forms, nor were they reported to Cigna by other healthcare providers who saw the patient during the year the home visits occurred.
- Medicare Advantage is a top priority for the government when it comes to detecting fraud.
- Medicare Advantage plans should focus on risk mitigation assessments to avoid similar situations:
- ensure your documentation looks good. Make sure if you’re doing these retrospective reviews of patient charts, you’re not just adding codes, but also making sure that if any of the codes needed to be downgraded, you’re deleting those extra codes
- look at their data and imagine how it would appear to an objective third party. Plans should ensure they are identifying the correct codes and that any in-home assessments are complete.
- conduct annual risk assessments and other monitoring.
- All Medicare Advantage organizations would benefit from proactively assessing their data on a routine basis. Some organizations may be able to monitor their documentation and conduct risk adjustments with their current staff. However, partnering with outside companies may be helpful for others.