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Health Law Highlights

The Risk of Criminal Charges in Hospice Fraud Cases

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.

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Hospice, home health agency and owners pay over $1.8M to resolve claims concerning physician payments

The founders of an Edinburg hospice and related home health agency have paid to resolve allegations they submitted claims to Medicare that resulted from unlawful referrals.

Onder Ari, 49, Edinburg, and Sedat Necipoglu, 48, McAllen, founded Allstate Hospice LLC and Verge Home Care LLC. They and their companies have now paid $1,847,279.36 following an investigation into improper payments to physicians for referrals.

Ari and Necipoglu offered compensation to physicians who were responsible for a significant majority of their patient referrals. Specifically, they provided physicians with monthly payments pursuant to medical directorship agreements with Allstate and Verge. Those payments were in excess of fair market value for the services the physicians actually provided. They also sold interests in Allstate to five different physicians which ultimately netted them substantial quarterly dividends. They also provided physicians other gifts and benefits, such as travel and tickets to sporting events.

Source: Hospice, home health agency and owners pay over $1.8M to resolve claims concerning physician payments

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Texas Hospice Owner Sentenced for Fraud Scheme

A jury found Rodney Mesquias guilty last week on charges of: conspiracy to commit healthcare fraud, conspiracy to commit money laundering, conspiracy to obstruct justice, conspiracy to pay and receive kickbacks, and six counts of healthcare fraud.

Mesquias owned and operated Merida Group, a healthcare company with dozens of locations in Texas. The Department of Justice says Mesquias conspired with the company’s CEO and medical director to mislead thousands of people with long-term, but not fatal, illnesses into believing they had only six months to live. This led to their enrollment in Merida’s “expensive and unnecessary” group homes, nursing homes, and housing projects.

This story has been widely reported and is one of the more egregious examples of intentional fraud I’ve seen. It has everything – false medical records, kickbacks, medically unnecessary services. To make matters worse, there were allegations that those involved were lying to patients telling them they had fatal illnesses, going so far as to send “chaplains” to lie to patients and give them last rites.

 

Given the complexities of the fraud and abuse laws, there are occasions when providers unintentionally run afoul of the rules. This is not one of those instances. The jury clearly thought this was intentional deceit.

Source: Texas Hospice Owner Sentenced for Fraud Scheme