The following is a summary of the federal Health and Human Services agency’s Office of Inspector General (OIG) reports of fraud and abuse enforcement activity across the country. The enforcement actions reported are based upon federal and individual states’ activity.
The summaries reflect areas of OIG’s and individual states’ current and recent enforcement activity. Knowing where regulators’ attention is focused can help healthcare providers identify areas of focus for compliance and risk assessment activities. Although not all the enforcement actions may be relevant to any one provider’s healthcare business, there may be some summaries that could be used as examples in compliance program education programs (“What to avoid”), or used in developing a risk management plan.
Of Note in this Issue:
- OIG’s use of Federal Debt Collection Procedures Act to recover fraud proceeds from a person who received proceeds from a fraudulent act, but was not involved in the actual fraud. (See June 7th summary.)
- Multiple reports of prosecution for beneficiary fraud.
- AG = Attorney General
- AKS = Anti-Kickback Statute
- CIA = Corporate Integrity Agreement
- CMP = Civil Monetary Penalties
- CMS = Centers for Medicare and Medicaid Services
- CPT = Current Procedural Terminology Codes
- DME = Durable Medical Equipment
- E&M = Evaluation & Management services
- FEHBP = Federal Employees Health Benefits Program
- FMV = Fair Market Value
- DOJ = United States Department of Justice
- FCA = False Claims Act
- FWA = Fraud, Waste & Abuse
- HHS = Department of Health and Human Services
- IA = Integrity Agreement
- LTC = Long Term Care (usually facilities)
- MCO = Managed Care Organization (typically Medicaid)
- MFCU = Medicaid Fraud Control Unit
- MSO = Management Services Organization
- OIG = Office of Inspector General in HHS
- OT = Occupational Therapy
- PBM = Pharmacy Benefit Managers
- PT = Physical Therapy
- SNF = Skilled Nursing Facility
June 15, 2022 OIG News Release
Alleged Health Care Fraudster Ordered Detained Pending Trial After Being Arrested on a Jet Ski Headed Toward Cuba
FL. The Defendant, owner of a DME provider, is alleged to have billed for DME that was never provided and never requested by Medicare beneficiaries. Claims submitted reflected that one physician purportedly prescribed DME for 145 patients, but none of those beneficiaries were patients of the physician and the physician never prescribed any of the billed-DME.
June 13, 2022 OIG News Release
Jury Finds Doctor Guilty in $10 Million TRICARE Scheme - Defendant Convicted of Fraud, Conspiracy, Identity Theft, and Other Crimes
AK. The Defendant, physician, was alleged to have signed off on illegitimate prescriptions for pain cream to receive a TRICARE payment. A pharmacy promoter paid recruiters to find TRICARE beneficiaries, regardless of whether they needed the drugs and then paid others to get medical professionals to “rubber stamp” prescriptions for TRICARE beneficiaries. The Defendant received cash bribes for signing off on prescriptions without consulting patients and without determining if the prescriptions were needed. A recruiter signed people up for the drugs and offered to pay them $1,000. The Defendant was convicted of wire fraud, mail fraud, falsifying records, violation of AKS, conspiracy and making false statements, and aggravated identify theft.
Former physician's assistant indicted for health care fraud, aggravated identity theft, and illegally prescribing controlled substances
GA. The Defendant, after serving a sentence for state and federal fraud and narcotics convictions related to illegally practicing as a physician assistant in MS, the Defendant relocated to GA and was employed as a physician assistant in GA without being a licensed physician assistant in any state, including GA. When posing as a physician assistant, she issued prescriptions, including for controlled substances without the physician’s permission which resulted in false pharmacy claims.
Steward Health Care System Agrees to Pay $4.7 Million to Resolve Allegations of False Claims Act Violations - System’s hospital paid physicians and physician practices for services not performed
MA. The Defendants agreed to resolve allegations that its relationships with several physicians and physician practice groups violated federal law, including the FCA. The Defendant-System allegedly paid a urology group to provide services to a non-existent Center of Excellence in return for referrals to the Defendant. The Defendant was also alleged to have entered into a similar arrangement with physicians specializing in cancer treatment and paying a physician to serve as director of the Defendant’s alleged Prostate Cancer Program. Referrals were made to the Defendant, but the physician did not perform any services. The Defendant disclosed during the government’s investigation that there were two other physician relationship that violated federal law by making payments to physicians when no physician services were provided. In return for referrals, the Defendant provided under market rent on some leases.
The Defendant is subject to a five year CIA.
Los Angeles Doctor to Pay $9.5 Million to Resolve Allegations of Fraud Against Medicare and Medi-Cal
CA. The Defendant, physician, is alleged to have submitted false claims to Medicare and Medicaid for procedures and tests never performed. The procedures, services and tests that were never conducted included injections of medications, drainage of cysts, and remove and destruction of various growths.
This was initiated through a Qui Tam case.
June 10, 2022 OIG News Release
AG Balderas Secures Prison Sentence for Power of Attorney Accused of Financially Exploiting Nursing Home Resident and defrauding the State Medicaid Program
NM. The Defendant maintained a power of attorney for a nursing home resident. The Defendant represented to Medicaid that the resident’s funds were held in a Medicaid trust, when no such trust existed. The Defendant then used the resident’s funds for the Defendant’s personal use. Medicaid paid for services that should not have been covered.
Outside the scope of this summary are issues related to misappropriation of the resident’s funds under the Power of Attorney.
Attorney General Moody Announces Arrests of a Nurse and the Mother of a Medicaid Recipient for Ripping Off Medicaid Program
FL. The Defendants, a licensed practical nurse and the mother of a high-risk infant, falsified progress notes for services alleged to have been provided by the Defendant-nurse. The Defendant-nurse submitted false progress notes, while the Defendant-mother signed and approved the progress notes and “clocked” in and out for the Defendant-nurse. After the Defendant-nurse was fired by her initial employer, the Defendant-mother declined a new LPN and continued the scheme by hiring the Defendant-nurse through another Medicaid provider company.
Three Clinical Laboratories and Their Owner Charged With Defrauding MassHealth, Money Laundering and Illegal Kickbacks - Defendants Allegedly Billed MassHealth for Medically Unnecessary Urine Drug Tests and Engaged in Kickback Relationships with Marketing Firms and Another Lab
MA. The Defendants, independent clinical labs, their owner and holding company, an additional independent clinical lab and its owner, a laboratory marketing company, and an MA physician were charged with Medicaid fraud, money laundering and kickbacks related to urine drug tests. It is alleged that kickback relationships existed with the marketing companies by increasing the number of urine drug test in exchange for a percentage of collected insurance reimbursement. A separate kickback arrangement was alleged with a lab who received referrals of urine samples. It is also alleged that lab claims were not properly ordered by physicians or other authorized prescribers, included false dates on the claims, were for medically unnecessary routine quantitative testing and/or were for medically unnecessary residential monitoring purposes (sober home testing is not covered by MA Medicaid).
Attorney General Alan Wilson announces recovery of almost $125,000 in Medicaid fraud
SC. The Defendants, two Medicaid recipients, completed applications and /or annual review forms in order to get Medicaid benefits and intentionally under-reported their income to receive the benefits.
Former Owner of Chicago Health Care Company Sentenced to a Year in Federal Prison for Billing Medicare for Non-Existent Treatment
IL. The Defendant, owner and CEO of a company that arranged in-home health care services for elderly and homebound patients, submitted false claims related to “care plan oversight” services that were not rendered or involved treatment less intricate than reflected on claims submitted by the Defendant to Medicare.
Muskegon Doctor Pleads Guilty To Billing For Office Visits She Never Performed And Agrees To Settle Civil Claims For Half A Million Dollars - Physician restricted from future controlled substance prescribing
MI. The Defendant, physician, pled guilty to billing Medicaid, Medicare and Blue Cross for services not performed. Office visits for prescriptions for controlled substances were billed for patient encounters when the Defendant was not in the office and unlicensed staff interacted with patients. It was alleged that the Defendant wrote prescriptions for controlled substances without a legitimate medical purpose and outside the course of usual professional practice.
This summary does not address the issues surrounding controlled substances and the Drug Enforcement Administration (DEA).
Medford Man Found Guilty, Sentenced To Jail for Defrauding MassHealth - Defendant Caused MassHealth to Pay Over $100,000 for Personal Care Attendant Services That Were Not Provided
MA. The Defendant, a Medicaid beneficiary, was found guilty in a scheme to falsely submit claims to Medicaid for Personal Attendant Care (PCA) services that were not rendered. The Defendant and the PCA schemed to submit timesheets for PCA services that were not actually rendered to the Defendant. The hours involved, included times when the PCA was working at a second employer or while the PCA or the Defendant were traveling ore residing out of the country separately for long periods of time.
Medicaid Fraud Control Unit Recovery
ND. The Defendant, pled guilty to Medicaid fraud, who was found to have over-billed Medicaid for services she did not provide. ND MFCU’s audit was the basis for the identification of the overpayment.
June 8, 2022 OIG News Release
Dansville Physician Agrees To Pay More Than $600,000 To Resolve Allegations That He Fraudulently Billed Medicare And Medicaid
NY. The Defendant, ENT physician, settled allegations that he fraudulently billed Medicare and Medicaid for procedures not performed at all or procedures that were not documented in patient medical records.
The matter was initiated as a Qui Tam case.
Georgia Man Pleads Guilty To Fraud And Kickback Scheme Involving Covid-19 And Cancer Genetic Testing
NJ. The Defendant conducted business with medical testing companies. He pled guilty to conspiracy to violate the Federal AKS and to health care fraud. He allegedly agreed to provide testing companies with qualified patient leads and tests for medically unnecessary cancer genetic screen tests for Medicare beneficiaries in exchange for kickbacks. To conceal his kickback scheme, he allegedly entered into a sham contract and utilized sham invoices to make it appear he was being paid for legitimate services. The scheme was expanded in March 2020 to include COVID-19 tests and significantly more expensive and medically unnecessary respiratory pathogen panel tests. Those tests were bundled and did not treat or identify COVID-19 regardless of medical necessity of either test.
June 7, 2022 OIG News Release
Suburban Chicago Home Sleep Testing Company To Pay $3.5 Million To Settle Federal Health Care Fraud Suit
IL. The Defendants, a diagnostic company providing home sleep testing, its founder and a vice president, are alleged to have fraudulently billed Medicare and four other Federal healthcare programs for medically unnecessary services and for services that involved kickbacks. The owner directed billing for second and third nights of testing when he knew only one night was needed to effectively diagnose sleep apnea and it only tested for one night when private health insurance was involved. Additionally, the Defendant company is alleged to multiply copays received from Medicare beneficiaries. The Defendants are alleged to use a business model that relied on several unlawful kickback schemes that incentivized physicians and their staffs to refer all of their home sleep testing services to the Defendant. The settlement amount was based upon the Defendants’ ability to pay.
The company and its founder agreed to enter into a Corporate Integrity Agreement as part of the settlement.
The matter was initiated through a Qui Tam action.
Justice Department Recovers Fraudulent Transfer of Proceeds Arising from Medical Kickback Scheme
SC. Alex Raley agreed to resolve a civil lawsuit brought under the Federal Debt Collection Procedures Act for his receipt of millions of dollars from an individual that had been found guilty of paying kickbacks in violation of the FCA. Although not involved in the kickback violations, funds he received were identified as coming from an individual previously convicted of submitting false claims to Medicare and TRICARE in violation of the AKS and FCA by paying kickbacks. The transferor acknowledged that he received nothing in return for the transfer and the payment was “intended to fulfill a childhood promise.”
June 4, 2022 OIG News Release
Cumberland County Man To Pay $900,000 For Violations Of The False Claims Act
PA. The Defendant controlled a group of pain management clinics and was alleged to have submitted false claims to Medicare for presumptive and definitive Urine Drug Tests (“UDT”) that were not medically reasonable or necessary and not used to aid in the diagnosis and treatment of patients.
June 3, 2022 OIG News Release
Case Update: Transportation Service Provider Owner Pleads Guilty to Multi-million Dollar Medicaid Fraud Scheme
PA. The Defendant, owner of a non-medical transportation service provider, pled guilty to charging Medicaid for non-medical transportation that was not medically necessary. Service coordination agencies enrolled beneficiaries in the Defendant as a service provider and the Defendant billed for services that were not necessary or rarely used.
Clinical Laboratory and Owner Charged in Medicaid Kickback and False Billing Scheme -
New Bedford Laboratory and Owner Billed MassHealth Over $4.6 Million for Medically Unnecessary Urine Drug Tests at Sober Homes; Referred Screens to Other Labs for Percentage of Insurance Reimbursement
MA. The Defendants, an independent clinical laboratory and one of its owners, are alleged to refer certain urine drug tests to two other labs in exchange for a percentage of collected insurance reimbursements in violation of the MA AKS. Additionally, MA Medicaid was billed for urine drug tests for residential sobriety monitoring at “sober homes,” which is not permitted due to lack of medical necessity. Many urine drug tests were not ordered by appropriate authorized prescribers.
Tampa Bay Medical Biller Sentenced For Healthcare Fraud, Aggravated Identity Theft, And Tax Offenses
FL. The Defendant was a medical biller that worked at a company that provided credentialing and medical billing services for medical provider clients. The Defendant wrongfully accessed and used his employer’s access to patient information and the name and identification number of a physician assigned to him to submit false and fraudulent claims to a Medicaid HMO for services that his assigned physician did not perform. The Defendant also altered the “pay to” address with the HMO so that payments for the non-rendered services were sent to a bank account controlled by the Defendant.
Not addressed in this summary are issues related to the income tax offenses.
Judge Orders Middle Georgia Family Rehab to Pay $9.6 Million in Damages for Submitting Hundreds of Fraudulent TRICARE/Medicaid Claims
GA. The Defendant, healthcare facility, was alleged to have submitted false claims for services improperly billed to Medicaid and TRICARE by the facility and its owner when it improperly used the names of a physical therapist and speech therapist who were no longer employed by the facility on the dates of service.
Woman Indicted for Prescribing Medically Unnecessary Medical Equipment in $8.8 Million Health Care Fraud Scheme
GA. The Defendant is alleged to have prescribed medically unnecessary DME without conducting proper consultations with beneficiaries, without a prior relationship with beneficiaries, without treating beneficiaries and without even conducting telemedicine consultations. Her co-conspirators are alleged to have submitted false and fraudulent claims to Medicare for DME and paid kickbacks and bribes to the Defendant in return for her participation.
June 2, 2022 OIG News Release
Healthkeeperz, Inc. To Pay $2.1 Million To Resolve False Claims Act Allegations
NC. The Defendant provides case management services for Medicaid beneficiaries. The Defendant is alleged to have submitted claims to NC Medicaid and received payment for services that were not covered by Medicaid.
The matter was initiated as a Qui Tam case.
This was also reported by OIG News on June 3, 2022.
Owner of Northeast Philadelphia Pharmacy Charged with Conspiracy to Distribute Oxycodone and Fraud - The Fox Chase-area Pharmacy is also the subject of a federal civil lawsuit filed earlier this year
PA. The Defendant, pharmacist, is alleged to have submitted fraudulent claims for prescription drugs that were not dispensed. The drugs involved were designated as “Bill But Don’t Fill” in patient profiles.
Outside the scope of this summary are allegations related to conspiracy to distributed controlled substances.
Caris Life Sciences Pays over $2.8 Million to Settle False Claims Act Allegations from Delay in Submission of Genetic Cancer Screening Tests - Caris circumvented Medicare’s “14-Day Rule” for Lab Tests Resulting in Added Medicare Expenses
NY. The Defendant, a laboratory that conducts national genetic testing for as a predictor for breast cancer, was alleged to have submitted claims to Medicare for tests performed on specimens which were ordered and performed within 14-days of patients’ discharge from an inpatient or outpatient hospital stay. Medicare rules allow labs to directly bill Medicare, only if the order and test is performed after 14-days from the discharge because the hospitals’ DRG payment should have covered the subject test. In addition to submitting the separate claims for the tests within the 14 day period, it failed to discourage providers who ordered to the testing within 14 days to cancel the order and place a new order outside of 14 days, and reimbursement was sought within 14 days of the date of outpatient procedures (also in violation of Medicare rules).
The matter was initiated as a Qui Tam case.
June 1, 2022 OIG News Release
Former CEO of defunct medical testing laboratory sentenced to prison for medical kickback scheme - Signed phony agreements to market other testing labs; payments were actually kickbacks for referring government business
WA. The Defendant, former CEO of Northwest Physicians Laboratory (“Lab”), was sentenced for his part in a conspiracy to obtain kickbacks by steering urine drug test specimens to two labs that could bill Medicare and TRICARE for tests. Two labs that were not physician owned made payments to the Lab in exchange for referrals of Medicare and TRICARE business in violation of the AKS. The kickbacks were disguised as fees for marketing services, however no marketing services were performed. Kickback payments were comingled with other Lab revenue and Defendant received distributions from the comingled funds.
Three Remaining Defendants Plead Guilty for Their Roles in Extensive Health Care Fraud Conspiracy to Defraud Medicaid Home Care Program - A Total of Fifteen Defendants Have Pleaded Guilty in Connection with the Conspiracy
PA. The Defendants pled guilty to submitting fraudulent claims for services that were never provided to Medicaid consumers, or for which there was insufficient or fabricated documentation to support claims. The conspiracy included: fabricated timesheets to reflect services that were never provided, paying kickbacks to consumers in exchange for their participation in the scheme, submission of Medicaid claims in the name of “ghost” employees for care that never occurred, bulk submission of fraudulent Medicaid claims for “unused” hours (excess hours of care beneficiaries did not need), and fabrication of documents for submission to PA auditors (i.e., timesheets, criminal history checks, child-abuse clearance forms, and consumer affidavits).
 Not included in the summaries are prosecutions related solely to drug diversion and inappropriate prescriptions, patient fiscal or physical abuse, or non-healthcare related matters. The summaries also do not include enforcement announcements of arrests with no report of an indictment or civil complaint.
 The summaries should be considered to reflect allegations and not necessarily be considered to be statements of fact.