Tag: Fraud & Abuse

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Texas Heart Hospital and Subsidiary Management Company to Pay $48 Million to Settle False Claims Act Allegations Related to Alleged Kickbacks

Huge qui tam settlement where the qui tam plaintiffs will recover $13.9 million. The underlying action involves allegations that the Heart Hospital violated the Stark Law and the Anti-Kickback Statute by requiring physician owners to satisfy the Heart Hospital’s yearly 48 patient-contact requirement in order to maintain ownership in the hospital.

This settlement arises from a lawsuit filed by former Heart Hospital physician owners Mitchell Magee, M.D. and Todd Dewey, M.D. pursuant to the whistleblower or qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds.

Dr. Dewey and Dr. Magee will collectively receive $13,920,000 as their share of the recovery.

Source: Texas Heart Hospital and Wholly-Owned Subsidiary THHBP Management Company LLC to Pay $48 Million to Settle False Claims Act Allegations Related to Alleged Kickbacks

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Federal Regulatory Compliance Issues Can Arise in State Court Matters

An interesting read regarding the use of federal regulatory compliance issues (e.g impermissible healthcare kickbacks) to support a state court tort claim.

The plaintiffs sued the manufacturer of a immunoglobulin infusion product alleging that the manufacturer improperly induced a physician to misdiagnose their condition by paying the physician impermissible kickbacks through bonuses and commissions. The plaintiffs did not assert Anti-kickback or Stark claims directly. Such claims must be brought as qui tam actions.

Instead, they alleged that the fact that the federal statutes prohibit such conduct illustrates that patient harm is a foreseeable consequence of the payment of kickbacks.

The gist is that these regulatory issues could find their way into your state court litigation case.

Source: Memorandum Order Denying Defendants’ Motion to Strike, Post v. AmerisourceBergen Corp., Northern District of West Virginia

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Two area home health agency owners charged in health care fraud and illegal kickback scheme

A federal grand jury indicted two home health agency on allegations that they fraudulently billed Medicare more than $10 million.

The indictment alleges that Tataw and Anglea Bisong, co-owners of SierCam Healthcare Services LLC, billed Medicare for home health services that were not medically necessary or not actually provided as billed.

Under the alleged scheme, the Bisongs paid SierCam patients to sign up for medically unnecessary home health services and provided free transportation and covered the copayments and other fees at doctor’s office visits to facilitate their health care fraud scheme.

It is also alleged that they created created false medical records to make it appear the services met Medicare’s criteria for reimbursement.

They were charged with six counts of health care fraud and conspiracy to commit health care fraud.

Source: Two area home health agency owners charged in health care fraud and illegal kickback scheme

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Jefferson County Doctor Convicted of Health Care Fraud Violations

The fraud and abuse laws can sometimes be obtuse, but this is a clear-cut case of intentional fraud.

Grigoriy T. Rodonaia, of Port Neches, Texas, was convicted by a jury of 12 counts of health care fraud, three counts of aggravated identity theft, one count of making a false statement, and two counts of accepting kickbacks.

Rodonaia, a physician practicing in Beaumont with Rodonaia Family Medicine and Aesthetics, was indicted on March 18, 2020.  According to information presented in court, beginning in January 2015, Rodonaia participated in a health care fraud scheme by issuing prescriptions for specially compounded scar creams using the names, dates of birth, and Health Insurance Claim Numbers of TRICARE beneficiaries, and caused the prescriptions to be forwarded directly to Memorial Compounding Pharmacy in Houston, Texas.

These prescriptions were issued without consultation with the patient and without the patient’s knowledge. The prescriptions were billed to the military health care program, TRICARE, by the pharmacy at approximately $9,000 to $13,000 per prescription, with multiple refills authorized per prescription.  Rodanaia issued over 600 prescriptions in the names of approximately 140 beneficiaries in furtherance of this scheme.

Before the scheme could be detected, TRICARE paid approximately $6.7 million in TRICARE funds to Memorial Compounding Pharmacy.  Further, to conceal his criminal activity, Rodonaia created fictitious patient files and records that falsely indicated that he had examined or consulted with those patients, and submitted those false records to the Defense Health Agency in response to an audit.

Source: The Gilmer Mirror – Jefferson County Doctor Convicted of Health Care Fraud Violations

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HHS Finalizes Highly Anticipated Final Rules Amending AKS and Stark Law Regulations, Part III: Value-Based Arrangements

A value-based arrangement is an arrangement entered into between a value-based enterprise (VBE) and one or more of its participants, or among VBE participants in the same VBE, for the provision of one or more value-based activities for a target patient population. The final rule defines a VBE participant as an individual or entity that engages in at least one value-based activity as part of a value-based enterprise, other than a patient acting in their capacity as a patient.

For purposes of the OIG’s new safe harbors, a VBE is two or more participants that: (1) are collaborating to achieve at least one value-based purpose; (2) are each a party to a value-based arrangement with the other (or at least one other participant in the same VBE); (3) have an accountable body or person responsible for financial and operational oversight of the VBE; and (4) have a governing document describing the VBE and how its participants intend to achieve the VBE’s value-based purpose(s).

The size and structure of a VBE can vary greatly from a large network of providers and suppliers; a separate legal entity, like an Accountable Care Organization (ACO); or just two providers contracting together to form a value-based arrangement.Finally, a value-based purpose is (1) coordinating and managing the care of a target patient population; (2) improving the quality of care for a target patient population; (3) appropriately reducing the costs to, or growth in expenditures of, payors without reducing the quality of care for a target patient population; or (4) transitioning from health care delivery and payment mechanisms based on the volume of items and services provided to mechanisms based on the quality of care and control of costs of care for a target patient population.

Source: HHS Finalizes Highly Anticipated Final Rules Amending AKS and Stark Law Regulations, Part III: Value-Based Arrangements | Mintz

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New Stark and Anti-Kickback Statute Comparisons

A great resource of the a redline versions of the regulations that highlight the changes for the new revisions to Stark and the Anti-Kickback Statute. The documents may be accessed here:

The Federal Register versions of the revised regulations and accompanying commentary may be accessed here:

Hat tip to Holland and Hart.

Source: New Stark and Anti-Kickback Statute Comparisons

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Fifth Individual Charged in Health Care Kickback Conspiracy

The defendants are alleged to have conspired to pay and receive kickbacks in exchange for physicians’ orders that were used to submit claims for payment to federal health care programs.  The conspirators obtained patient information, including protected health information and personally identifiable information, and used the information to create fictitious physicians’ orders.  The conspirators then sold the physicians’ orders to each other and to other durable medical equipment providers.  Within approximately eight months, the defendants collectively obtained more than $2.9 million in proceeds from the criminal scheme.

Source: Fifth Individual Charged in Health Care Kickback Conspiracy

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Stark + AKS Final Rules

The final rules for changes to the Stark Law and Anti-Kickback Statute (healthcare fraud & abuse laws) have been published and go into effect on January 19, 2020. Of course, health lawyers love this stuff, but it could impact other practice areas too.

Transaction attorneys, you already know to be very careful if your transaction or arrangement, in any way, involves a hospital, doctor, or any other healthcare provider or entity. Even if your deal does not involve a healthcare provider, but could impact reimbursement by any federal program, these statutes may be implicated.

Litigators, these statutes can apply to your cases too. If your case involves one of these improper payments or an improper business structures, you might have a contractual avoidance theory available to you, if you’re the defendant, or an additional claim of fraud, if you are the plaintiff.

The key point is that these statutes can apply in ways that don’t seem immediately obvious.

Source: Stark + AKS Final Rules

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OIG Fraud Concerns Over Physician Speaker Programs

In a Special Fraud Alert issued on November 16, 2020, the Department of Health and Human Services Office of Inspector General (HHS-OIG) raised significant fraud and abuse concerns with companies offering or providing remuneration in connection with physician speaker programs. Speaker programs typically involve one health care professional presenting to others on a company’s drug or device, or a disease state relevant to the company’s products, in exchange for a speaker honorarium. While speaker programs may have some legitimate purposes, HHS-OIG warned of risk the programs create for drug or medical device companies and health care professional participants, if one purpose of the program is to induce or reward federal health care program referrals.

This has been a long time coming. There have been various prosecutions and settlements involving speaker programs over the years. I’m surprised it has taken this long for OIG to issue a Special Fraud Alert.

Source: OIG Fraud Concerns Over Physician Speaker Programs

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Houston physician sentenced to prison for $17M billing fraud

Yolanda Hamilton, MD, was found guilty by a federal jury of participating in a Medicare scheme that involved signing false “plans of care” and other medical documents for home health services that were used to submit fraudulent claims to Medicare. She allegedly received $30,000 in kickbacks during the four-year scheme. Prosecutors alleged that Dr. Hamilton and her co-conspirators submitted more than 2,500 fraudulent claims to Medicare, according to the Houston Chronicle.

Source: Houston physician sentenced to prison for $17M billing fraud