Health Care Fraud Blog

“Sweeps” among law enforcement are generally used in high drug crime areas to literally sweep in and arrest as many people as possible to clear out the drug dealing in that area.

In a modification of the theme, the State of Florida Agency For Health Care Administration (AHCA) decided to conduct an auditing sweep of durable medical equipment (DME) providers in Bay County, Florida. AHCA is the Florida Medicaid program administrator, and has the authority under Florida law to initiate overpayment actions or terminate a program provider, but is not a law enforcement authority, referring instances of fraud to the Attorney General’s Medicaid Fraud Control Unit. The probe was directed to supplies of oxygen to patients with COPD under the Medicaid program.

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According to a press release, HHS Secretary Kathleen Sebelius and Attorney General Eric Holder launched an interagency high-level task force to help detect and prevent health-care fraud, which robs the nation's coffers of billions of dollars each year.

The Department of Justice and Department of Health and Human Services directed federal investigators and prosecutors to expand special strike forces to Detroit and Houston, where "erratic" billing data suggest high levels of fraud, waste and abuse in Medicare and Medicaid programs. The first of these task forces was launched in Miami and then expanded to Houston and Los Angeles.

The new task force, the Health Care Fraud Prevention and Enforcement Action Team, or HEAT, would be run from the highest levels of government. The Health Care Fraud Prevention and Enforcement Action Team will be composed of senior-level officials at the Justice Department and HHS. The group will use electronic claims data, as well as the threat of federal prosecution, to look for unusual billing problems.

To read more about about the HEAT initiative, click here and here.

The Justice Department and 16 Attorneys General joined a whistleblower lawsuit alleging that Wyeth Labs offered lower prices on two prescription drugs that were not offered to the Medicaid Programs of the various states avoiding hundreds of millions of dollars in rebate payments owed to state Medicaid Programs. Under the Medicaid rebate programs of most states, manufacturers are required to offer the same discount pricing to the program as they do to customers. The suit alleges hospitals received steep discounts that were not provided to the states in order to gain access to hospital patients.

To read more, click here.

Some 60 defendants charged with Medicare Fraud in the Southern District of Florida have fled pending trial since 2004. Many who have fled are of Cuban origin, leading authorities to conclude that they have returned to Cuba, which is generally out of reach of U.S. law enforcement.

Previously, defendants were able to be released on minimal restrictions. However, over the last year judges in the Southern District have been denying bond and placing significant restrictions on defendants to assure the presence of Medicare fraud defendants.

In another very good article, Jay Weaver of the Miami Herald, breaks down the fugitive life of one such defendant, Alcides Garcia, originally believed to have fled to Cuba but who had traveled to Mexico, Spain and was eventually arrested in the Canary Islands.

To read more click here.

One study by CMS found that up to 70% of payments for some medical equipment should not have been due to a failure to document the medical necessity for the equipment provided under CMS guidelines. In 2008, the errors resulted in $2.8 billion. A representative of CMS indicated that the numbers were not actual fraud, but the error rates made fraud more likely. A new program is of regional bidding for DME suppliers is expected to begin in 2010.

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Newly appinted Secretary of HHS, Kathleen Sebelius, has stressed health care fraud enforcement, citing that for every dollar spent on fraud and abuse detection and enforcement, the government receives $1.55 in savings. $1.7 billion over the next ten years has been set aside for such enforcement.

For more info click here.

An Ohio pharmaceutical wholesaler, Masters Pharmaceutical, Inc, agreed to pay $500,000 and entered into a consent decree pertaining to compliance with DEA regulations in settlement of claims that the distributor unlawfully supplied controlled substances to unlawful internet pharmacies and failed to report those sales to the DEA.

The settlement agreement covers the sales of more than 4,199,465 dosage units of hydrocodone, phentermine and alprazolam that occurred between 2005 and 2008 and were not reported to the DEA. DEA has reporting requirements with respect to the theft or diversion of controlled substances under 21 C.F.R. 1301.74(b).

To read more, click here and here.

WellCare Health Plans, Inc., Florida ’s largest managed care provider, has agreed to pay $80 million in forfeiture and restitution to Florida’s Medicaid program. WellCare also entered into an agreement for compliance and monitoring in a deferred prosecution agreement with the United States. Under a deferred prosecution agreement, the company would not be prosecuted for fraud if it complies with all the provisions of the agreement.

WellCare was charged in a scheme to defraud the Florida Medicaid program and the Florida Healthy Kids Corp., the U.S. Attorney’s office said in a press release. The scheme alleged by the government was that Wellcare charged the Medicaid program for services it claimed were paid to another entity, Harmony Behavioral Health, Inc. Harmony was wholly owned by Wellcare and did not provide the services claimed.

To read more, click here.

Telemarketers in Houston are pushing “Medicare approved arthritis kits” that are really an assortment of DME and prosthetic devices billed to Medicare individually.

Barbara McGinity with the Better Business Bureau explains that the scam artists have taken something Medicare will pay for, individual items like a wrist band, like a knee brace, like a back brace, and have packaged them making it sound like it's a new thing a Medicare approved arthritis kit.

Houston's FOX 26 Investigates report that many of the Medicare patients contacted never got the kit even though their Medicare was billed hundreds of dollars.

You can click here to read the article.

The Senate recently approved the Fraud Enforcement and Recovery Act of 2009, originally designed to combat mortgage fraud, however the Act also expands the Federal False Claims Act, generally brought by whistleblowers against health care providers. Pursuant to the Act, the government won't have to prove that the defendant intended to defraud the U.S. government. The violator would only have to have had knowledge of information that a claim might be false, acted deliberately without verifying the information, or acted in reckless disregard of the truth or falsity of the information. Currently, the False Claims Act requires specific Knowledge of fraud.

The government recovered more than $15 billion using lawsuits under the False Claims Act from 2000 to 2008.

To read more click here.

HealthEssentials was a Louisville, KY company providing nurse practitioner services to geriatric patients at assisted living facilities and nursing homes. The company, which started in 1998, grew quickly and at one point had operations in 18 states with revenues of over $53 million in 2003.

Then in 2005, lawsuits were initiated by former staffers from the Louisville, KY firm under whistleblower provisions of the False Claims Act which lead to criminal and civil investigations by the United States just as the company was planning an IPO. Three suits, initially filed under seal, accused HealthEssentials of systematically upcoding claims and billing for assisted living care for services actually provided in patients' homes.

The company filed for bankruptcy protection in 2005 and entered a criminal plea to Health Care Fraud in 2008, also agreeing to pay $3.1 million of $40 million of claimed fraud. The officers of the company avoided criminal charges, however a business manager, Karen Stone was recently indicted for Health Care Fraud.

The original whistleblowers will not likely see any recovery under the False Claims Act as the company is largely insolvent and is not expected to be able to pay the $3.1 million settlement.

To read more, click here and here.