Health Care Fraud Blog

WASHINGTON (March 26) – The Office of the Inspector General of the Health and Human Services Department has issued a Special Fraud Alert that physician-owned distributorships (PODs) are “inherently suspect” under the anti-kickback statute (AKS) and has listed suspicious characteristics that may increase the risk of fraud and abuse.
The alert focused on physician-owned businesses / PODs that obtain revenue from selling implantable medical devices ordered by their physician owners to use in procedures they perform on their patients at hospitals or ambulatory surgical centers.

“The opportunity for a referring physician to earn a profit, including through an investment in an entity for which he or she generates business, could constitute illegal remuneration under the anti-kickback statute,” said the IG alert .

One purpose of the anti-kickback statute (AKS) is to protect patients from inappropriate medical referrals or recommendations made by health care professionals who may be unduly influenced by financial incentives. It a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce, or in return for, referrals of items or services reimbursable by a Federal health care program. When remuneration is paid purposefully to induce or reward referrals of items or services payable by a Federal health care program, the AKS is violated. Parties on either side of an impermissible “kickback” transaction are exposed to criminal liability. Violation of the AKS statute is a felony punishable by up to 5 years imprisonment, a maximum fine of $25,000 or both. Individuals convicted of violating the AKS are excluded from Federal health care programs, including Medicare and Medicaid. OIG also has the right initiate an administrative action to exclude persons from the Federal health care programs or to impose civil money penalties for fraud, kickbacks, and other prohibited activities under sections 1128(b)(7) and 1128A(a)(7) of the Act.

The financial incentives that PODs offer to their physician owners may influence them to perform medically unnecessary procedures and to use the devices the PODs sell instead of other more appropriate devices.

According to the Special Fraud Alert, the OIG is “particularly concerned about the presence of such financial incentives in the implantable medical device context because such devices typically are ‘physician preference items,’ meaning that both the choice of brand and the type of device may be made or strongly influenced by the physician, rather than being controlled by the hospital or ambulatory surgical center where the procedure is performed.”

If you or someone you know has been accused of violating the anti-kickback statute, for serious health care fraud defense, contact attorney Robert Malove (954)861-0384.

HOUSTON (March 13) - A Texas doctor who was convicted of conspiracy to commit health care fraud and six counts of false statements relating to health care matters was sentenced today to serve 63 months behind bars.

Ben Harris Echols, 63, of Houston, was convicted late last year of conspiring to commit health care fraud by falsifying plans of care for Medicare beneficiaries, including patients whom he did not treat, as part of a $17.3 million Medicare fraud scheme. Upon completion of his prison term, Echols was ordered to serve three years of supervised release and pay restitution in the amount of $2,918,830.

According to evidence presented at trial, Echols signed plans of care for Medicare beneficiaries who were not under his care and about whose conditions he had no knowledge. In many instances, Echols signed plans of care even though other doctors were listed as the attending physician on the documents.

Echols was prosecuted by the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Texas.

If you or someone you know is facing prosecution as a result of aggressive law enforcement activity in the area of Medicare or Medicaid fraud, call Board Certified Criminal Trial Lawyer Robert Malove, co-author of the noted treatise, White Collar Crime: Health Care Fraud (Thompson West 2012-2013 ed.)

Washington (Jan. 30) -- Assistant attorney general of the Criminal Division, Lanny Breuer, is leaving the Justice Department. Breuer gained notoriety for defending president Bill Clinton against impeachment and for defending four-time Cy Young award winner, Roger Clemens.

"Serving as assistant attorney general for the Criminal Division has been the greatest privilege of my professional life," Breuer said in a statement. "From my first day on this job nearly four years ago, I have loved it, and I am so proud of what the Criminal Division has accomplished over the past four years," Breuer said.

The announcement came the day after a federal judge in New Orleans approved the largest package of criminal fines and penalties in U.S. history. In 2010, Attorney General Eric Holder had named Breuer to oversee the Deepwater Horizon Task Force. The record amount of the settlement in the guilty plea will cost BP $4 billion and lets Breuer to depart the Justice Department on a positive note.

Many have criticized Breuer for failing to bring major prosecutions against the nation's largest financial institutions responsible for financial crisis in 2008 and 2009. Breuer maintained that the banks and their employees needed to be protected against an implosion that could cause greater problems.

Breuer was the top administration official who faced criticism for ATF's Operation Fast and Furious. Breuer ultimately apologized for an inaccurate letter to a senator in which the Justice Department denied the ATF allowed guns to be smuggled to Mexican drug cartels.

WASHINGTON, D.C. (October 4,2012) Today, U.S. Attorney General Eric Holder and U.S. Department of Health and Human Services Secretary Kathleen Sebelius announced at a joint press conference that Medicare Fraud Strike Force operations conducted one of the largest health care fraud takedowns in history.

Charges have been brought in seven cities from Brooklyn to Los Angeles against 91 individuals – including doctors, nurses, and other licensed medical professionals – for their alleged participation in fraud schemes involving nearly $430 million in false billings.

Charges include health care fraud, conspiracy to commit health care fraud, wire fraud, violations of the anti-kickback statutes, aggravated identity theft, and money laundering charges are based on a variety of alleged activities involving treatments and services that were medically unnecessary or never actually rendered.

The alleged fraudulent schemes range from home health care and mental health services, to psychotherapy, physical and occupational therapy, durable medical equipment services, and the largest ambulance fraud scheme ever prosecuted by the Medicare Fraud Strike Force.

The joint press release by the Department of Justice and Department of Health and Human Services announced that "in Miami, a total of 33 defendants are charged for their alleged participation in various fraud schemes involving a total of $204.5 million in false billings for home health care, mental health services, occupational and physical therapy, and DME.

In one case, three defendants are charged for participating in a fraud scheme at LTC Professional Consultants and Professional Home Care Solutions Inc. which led to approximately $74 million in fraudulent billing for home health care."

In another South Florida case, according to the indictment, the owners and operators of Hollywood Pavilion, psychiatric hospital, have been charged with paying cash kickbacks to owners and operators of assisted living facilities and halfway houses to obtain patients, and then billing Medicare for over $67 million in mental health services that were unnecessary or never even provided. The indictment alleges a scheme that is not new to South Florida and will feature a number of government witnesses who have previously testified in some of those cases.

In another Miami case, the government is restraining 40 bank accounts, and 16 residences valued at approximately $4.6 million, that belong to the owners and operators of a home health agency charged with defrauding Medicare to the tune of approximately $74 million.

MIAMI, FL - A Weston psychiatrist was sentenced on Monday to 10 years in for his role in what United States Department of Justice Health Care Fraud Strike Force prosecutor Jennifer Saulino called "one of the largest and most brazen health care fraud conspiracies in recent memory."

Dr. Mark Willner, who practiced in Fort Lauderdale and Boca Raton, was convicted of conspiracy to commit health care fraud after a six-week trial earlier this year. Prosecutors said Willner, 56, was part of a broader conspiracy involving American Therapeutic Corp., which billed the taxpayer-funded Medicare program for more than $205 million in fraudulent claims.

In her submission to U.S. District Court Judge Patricia Seitz, United States Department of Justice Heath Care Fraud Strike Force prosecutor Jennifer Saulino wrote "This massive fraud was committed by manipulating the proper treatment of Alzheimer's and dementia patients, substance abusers seeking treatment, and others convinced or cajoled into spending time at ATC."

"Without Willner and other doctors signing thousands of false and fraudulent patient documents – documents that stated he was personally directing the patients' treatment plans and having 'face-to-face' contact with the patients – ATC could not have succeeded on such an immense scale," Saulino wrote.

Psychiatrist Dr. Alberto Ayala, 68, of Coral Gables, who was also convicted at trial was sentenced to 10 years in federal prison. Willner's attorney, Sam Rabin, said he intends to appeal.

Dr. Alan Gumer, M.D., who after being unable to post his own $1 million bond to secure his release from jail following his arrest, was one of the witnesses the government called to the witness stand to testify at trial. After at least five debriefings with prosecutors in the week after his arrest, Gumer's bond was cut in half before he could be released.

Rabin's cross-examination of Gumer at trial was classic. Even Judge Seitz at one point referred to Rabin as "the honorable Mr. Rabin." Attorneys interested in learning about how to cross-examine a cooperating witness would do themselves a service by studying (as have I in preparation for a pending Medicare fraud case) Mr. Rabin's, and Miami criminal defense attorney extraordinaire, Jose Quinon's cross of Gumer.

Gumer was into bookies for gambling debts and hadn't paid federal income taxes for at least 10-years. Yet despite the clear implication that Gumer's cooperation was all about saving his own neck and that he would have said just about anything on the stand in hopes of earning a significant sentencing reduction at the government's request, in the end the evidence proved to be too much for the defense to overcome.

Prosecutors said Dr. Willner and Dr. Ayala caused false and fraudulent claims to be submitted to Medicare for partial hospitalization programs.

According to prosecutor Saulino, "These co-conspirators, including Dr. Willner, victimized the most vulnerable members of our society so they could have nicer homes and fancy artwork."

More than 30 people have been charged and more than half have pleaded guilty or been convicted at trial. Last year, Lawrence Duran, the president of ATC was sentenced by U.S. District Judge Lawrence King to 50-years behind bars; ATC vice-president Judith Negron was sentenced
to 35 years. Dr. Gumer also testified at Negron's trial.

BATON ROUGE, La. (AP - Karen Rayburn, a 47-year-old Baton Rouge woman, who worked as a patient recruiter for several Louisiana durable medical equipment (DME) companies has been sentenced to 18 months in prison for her role in a Medicare fraud scheme. Rayburn pleaded guilty to one count of conspiracy to commit health care fraud In January.

The companies linked to the scheme allegedly submitted more than $21 million in bogus Medicare claims. Prosecutors say bogus prescriptions for leg braces, wheel chairs and other equipment that Rayburn obtained were used to submit fraudulent claims to the Medicare program.

The United States Probation office conducted a Pre-Sentence Investigation and determined that Rayburn's advisory guidelines offense level was 23 with a criminal history category of I. Her advisory guideline imprisonment range is 46 to 57 months.

Noting that Rayburn had provided "substantial assistance" in the investigation or prosecution of others involved in the conspiracy, the prosecutor filed a §5K1.1 motion under the guidelines urging the judge to reduce Rayburn's sentence by 40%.

The prosecutor wrote, "While the United States would typically recommend a five (5) level reduction in a matter such as this, the result would be a advisory guideline range of 27 to 33 months, which would result in a recommended sentence for Ms. Rayburn that is much more severe than the sentence imposed by this Court for her own brother, Rodney Taylor, who did not cooperate. Such a sentence would also be approximately the same as that imposed by this Court on at least one recruiter who pled guilty in two separate matters and admitted to conduct in a third matter, yet who did not cooperate."

Eight other defendants have been sentenced for their roles in the plot. Three others await sentencing.

CHICAGO (September 25) - Two owners of Rosner home health care agency near Chicago and two physicians were among nine people charged in a 27-count indictment with federal offenses for paying and receiving kickbacks in exchange for the referral of Medicare patients for home health care services.

Three defendants were charged with one count of conspiracy to pay illegal kickbacks for Medicare patient referrals. Eight of the nine defendants were charged with two or more counts of violating the anti-kickback statute.

According to the indictment between January 2008 and July 2012, three defendants conspired with others to pay kickbacks and bribes to doctors. The amount of kickbacks varied from $300 to $600 for each new patient’s completion of five home health visits in one cycle and ranged between the same amounts for the repeat admission of a previous patient in a new cycle of home health care.

Medicare paid the HHCA approximately $13 million for claims submitted for home health services between January 2008 and January 2012.

Conspiracy and each count of violating the anti-kickback statute carry a maximum penalty of five years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

WESTON, FL (August 16 ) - At a news conference at DEA offices in Weston, FL, on Thursday regarding in the latest crackdown on South Florida pill mills - Phase II of the two-year Operation Pill Nation - it was announced that, seven doctors, three pain clinic owners at the Pompano Beach Medical Corp., and one owner's relative have been arrested for crimes including racketeering, trafficking in a controlled substance, money laundering among others.

The allegations are that beginning in April 2010 and continuing up until as recent as last month, undercover investigators visited the clinic and were prescribed controlled substances despite the fact that none of the agents were suffering from any infirmity that required medication.

"The DEA does not target doctors; we target drug traffickers," DEA Special Agent in Charge Mark Trouville said.

Among those arrested were: Dr. Marcia Sills, 59, of Fort Lauderdale; Dr. Gabriel Sanchez, 74, of Tamarac; Dr. Mark Cukierman, 56, of Boca Raton; Dr. Michael Fronstin, 75, of Palm Beach Gardens; Dr. Adeline Essian, 59, in Chicago; and Dr. Khanh Van Kim Duong, 33, in New York. Dr. Thomas Rodenberg, 53, of Fort Lauderdale, was being sought in Tennessee. Also arrested were clinic owner Steven August Edson, 40, of Coral Springs; Bruno Balbi, 29; Francisco Carlos Balbi, 57; and Aline Balbi Leca, 31, all of Deerfield Beach.

"[If] these folks [are] hiding behind a white jacket and diploma, it doesn't give them a pass," Trouville said.

According to Trouville, "[t]hese folks are simply doing this for profit and greed. There's no intent for good medical practice there."

Broward Sheriff Al Lamberti said, "I still don't get it. A doctor goes to medical school for 10 years to learn how to save lives and ends up ruining lives and that's something we just can't tolerate."

According to Lamberti, two years ago "there were 78 McDonald's and there were 130 pill mills. But I'm happy to say today that you have a better chance of buying a Big Mac than you do a bottle of oxycontin."

To watch a video clip from the news conference, click here.

MIAMI (June 21) - Two Miami home health care agency owners of a were sentenced to 73 and 74 months in prison for their participation in a $20 million home health Medicare fraud scheme.

Ariel Rodriguez was to 73 months in prison and three years of supervised release and Reynaldo Navarro was sentenced to 74 months in prison followed by three years of supervised release and were ordered to pay $14 million in restitution. Rodriguez, 41, Navarro, 37, were the owners of Serendipity Home Health Inc., a Miami home health agency that was supposed to provide home health care and physical therapy services to qualifying Medicare beneficiaries.

According to court records, Rodriguez and Navarro paid kickbacks and bribes to patient recruiters in exchange for the recruiters providing patients to their home health care agency, as well as prescriptions, plans of care and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries. The prescriptions, POCs and medical certifications were then submitted to Medicare for reimbursement.

Court documents claimed nurses and office staff falsified patient files for Medicare beneficiaries to make it look as if the beneficiaries qualified for home health care and therapy services. Rodriguez and Navarro knew that the beneficiaries did not qualify for and did not receive such services, but these files were falsified nevertheless so that Medicare could be billed.

Rodriguez, Navarro and their co-conspirators submitted almost $20 million in false and fraudulent claims to Medicare, of which Medicare paid approximately $14 million.

TAMPA (June 21) - Today, U.S. District Court Judge Virginia Hernandez Covington granted the defendant's motion for a downward variance from the sentence recommended by the advisory United States Sentencing Guidelines. As I sat in court and listened, I could not help but be very impressed with Judge Covington's keen insight into the application of the sentencing guidelines.
The defendant, Paul Vincent Rivers, was a pharmacist who twice sold oxycodone to a confidential informant. The advisory United States Sentencing guidelines called for a sentence of 46 - 57 months incarceration. In pronouncing sentence, Judge Covington recognized how the defendant never knew his father and was raised by his mother - which was certaintly no easy task, and that the defendant had served in the U.S. military.