Health Care Fraud Blog

The City of Delray Beach, Florida, is considering requiring pain management patients to give their fingerprints so those fingerprints can be used to immediately electronically check against a database to make sure the patient is not doctor shopping. That sounds great, but there is currently no electronic patient fingerprint network or database anywhere and for Delray Beach to create and maintain one itself it would cost more than they likely have budgeted for much of the services the city provides.

To read more, click here.

One bill pending before the Florida legislature proposes requiring that all physicians issuing a prescription for Schedule II and III controlled substances use a “multi-state electronic prescribing network” to verify whether a patient is doctor shopping. Unfortunately, no such network exists for controlled substances. In addition, the statute does not provide any way to fund it except for grants from unknown sources. For more, click here.

U.S. Senator Tom Coburn of Oklahoma, who is also a medical doctor, is proposing that the United States root out Medicare Fraud through the use of undercover patients. Actually this is not new a new idea, government agents have in the past used undercover activities for precisely this purpose; recently, undercover agents posing as patients have been used extensively for investigations of pain management clinics.

Part of the problem is that often the undercover agent has to come up with a malady that would be the pretense of the visit. Generally, undercover agents posing as patients generate a false identity as well as a false medical history; sometimes going as far as to use test results, x-rays or the like from other, real patients. Sometimes, for example with pain clinics, the condition could be somewhat subjective; “My back hurts.” Such investigations can have good, bad and sometimes even funny results. In one undercover investigation, a Medicaid fraud agent, posing as a patient going to physician’s offices where it was alleged patients were paid, learned that one of the physicians he went to see diagnosed him with, among other things, erectile dysfunction. On the not so funny side, one department of insurance agent investigating chiropractors posed as a patient and wound up receiving an adjustment that injured his back.

In the Medicare arena, since the program is for persons over 65, the challenge would be to use retired or near retired agents and then address the same quandary; do you falsify conditions or symptoms? This can be more difficult to do with an older agent/patient; some conditions or diagnoses that might lend to potential fraudulent activity by physicians such as cancer and cardiac conditions are difficult to fake. Although scenarios can always be found to avoid a circumstance where a patient will receive certain treatments or injections, sometimes the outcomes are hard to determine.

To read more, click here.

Arnesto Segredo, of Miami was sentenced to 70 months in prison for of conspiring to divert the prescription drugs Serostim and Nutropin AQ. Both drugs are human growth hormones (HGH).

The scheme involved Segredo using first and unlicensed company and then a Florida licensed wholesale company to buy and then resell the drugs that were originally purchased by co-conspirators in California from AIDS patients who were prescribed the drugs which were paid for by the California Medicaid program. The use of HGH by AIDS patients is used to prevent what is called “wasting” or the deterioration of muscle. The drugs are also used on the illegal market, by body builders to bulk up muscle mass.

Mr. Segredo wad convicted by a federal jury after going to trial. Going to trial was a pretty brave act given that the prosecutor’s opening statement to the jury likely contained some form of the following: Desperate, poor, dying people sold away the drugs that helped keep them alive so Mr. Segredo could make a profit; oh, and by the way, Medi-Cal paid for those life saving drugs so Mr. Segredo’s lucre also came at the expense of the hard-working taxpayers of California and the United States.

To read more, click: here.

If a provider discovers that it may have submitted false claims to Medicare or Medicaid, either through errors or through the malfeasance of an employee, the provider is obligated to pay the program back the funds wrongfully obtained. Medicare has a self disclosure protocol that allows providers to report false or erroneous claims but the terms of the protocol does not guarantee that by so doing anyone will avoid triple times damages under the False Claims Act or criminal prosecution.

When a provider self reports, its owners and employees can hope to avoid false claims or criminal liability based upon the benefit of telling Medicare before the false claim is otherwise discovered; whether through a whistleblower or the Program itself. However, often the problem can be large enough to cause serious financial distress to the provider or put other seemingly non responsible employees or owners at risk of criminal prosecution. Once reported, providers generally lose control of what happens; the money is not owed by only the criminal, but also the apparently innocent provider itself. The overpayment cannot be paid back at the provider’s schedule and the provider cannot control who the government decides to hold liable for the fraudulent acts.

Many times when reporting the crimes, others, innocent of the crime, also face scrutiny and the criticism “how could you have not known about this” is directed at the leaders of the organization. Some providers facing these circumstances, based upon a lack of certainty of the outcome, are tempted to end the problem, not report it, and hope that no one figures it out, fearing their own disclosure could be ruinous. This, of course, is the wrong decision, if discovered, the failure to disclose certainly tends to make everyone involved both in the activity and the decision to cover it up look guilty of a crime.

Take the case of the Eye Specialty Group of Memphis . They discovered that a physician employee was diluting the drugs used on patients so he could steal the excess drugs to sell for a profit. However, the provider unknowingly submitted claims to Medicare based upon the doctor’s services as if the doctor had been providing the accurate dose, causing the submission of false claims to Medicare. The provider had purchased all of the medicine it billed for, but the crooked doctor was stealing and reselling the excess medication. So the provider reported the doctor to the authorities and the result was a bill from Medicare for hundreds of thousands of dollars, potential lawsuits by patients, and a lot of really bad publicity.

To read more, click: here.

In an intriguing development in the war on pain, Palm Beach County, Florida, passed an ordinance designed to prevent new pain clinics from opening up and are intending to pass ordinances to curb the practices of existing pain clinics. This is a somewhat unusual development and may form the basis for legal challenges. The county commissioners, with some harsh words for pain clinics, are apparently attempting to regulate the medical profession through zoning regulations.

To read more, click: here.

According to a Department of Justice press release, Miami-Dade County resident Dulce Briceño was sentenced on February 4th to 63 months in prison for her role in a $2.3 million Medicare fraud scheme.

Miami based U.S. District Judge Ursula Ungaro also ordered Briceño to pay $1.8 million in restitution. Originally, Briceño was indicted in the Eastern District of Michigan, but after her arrest in Miami, she consented to have her case transferred to the Southern District of Florida for her plea and sentencing.

Briceño pleaded guilty on Oct. 9, 2009, at which time she admitted that in approximately September 2006, she agreed with the owners of X-Press Center to manage the clinic on a day-to-day basis in exchange for a percentage of the profits the clinic generated. Briceño also admitted that during the time the clinic was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or were never provided. Briceño admitted that she and her co-conspirators at the clinic had purchased only a small fraction of the medications that the clinic billed the Medicare program for providing.

Briceño admitted that Medicare beneficiaries were not referred to X-Press Center by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks. In exchange for those kickbacks, Briceño admitted that the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare. Kickbacks paid to Medicare beneficiaries at the clinic, according to plea documents, came in the form of cash and prescriptions for narcotic drugs.

Briceño also admitted that between approximately September 2006 and March 2007, she and her co-conspirators at X-Press Center caused the submission of approximately $2.3 million in false and fraudulent claims to the Medicare program for services purportedly provided at X-Press Center. Medicare paid approximately $1.8 million on those claims.

The FY 2011 Budget requests a $234.6 million increase, including 708 new positions (143 agents and 157 attorneys), to restore confidence in U.S.markets, protect the federal treasury and defend the interests of the U.S. Government.

This includes an additional $96.8 million for economic fraud enforcement, which is a 23 percent increase over the FY 2010 level. This increase will continue the department’s efforts to aggressively pursue traditional law enforcement and litigation activities ranging from mortgage fraud, corporate fraud and other economic crimes, to other mission-critical activities that support the overall functioning and efficiency of the department.

The Department of Health and Human Services’ (HHS) budget requests a $60.2 million increase specifically for DOJ components involved in the investigation and litigation of health care fraud cases. This increase will further the efforts of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced last year by Attorney General Holder and HHS Secretary Kathleen Sebelius.

DOJ's efforts to combat health care fraud are funded almost exclusively through reimbursements from the Health Care Fraud and Abuse Control (HCFAC) account administered by the Department of Health and Human Services (HHS). In FY 2010, the HCFAC account provided $211.4 million in mandatory and discretionary funding for the DOJ litigating components and the FBI which are engaged in combating health care fraud. The increased funding will permit DOJ to expand Medicare Fraud Strike Force operations in order to target agents and attorneys to the criminal hubs where health care fraud activities occur. In addition, these funds will be used for civil enforcement efforts, including alleged fraud by pharmaceutical and medical device manufacturers. These anti-fraud efforts have the potential to save $2.7 billion over five years by improving oversight and stopping fraud in the Medicare and Medicaid programs.

For more information, click here to view the Restore Confidence in our Markets, Protect the Federal Fisc, and Defend the Interests of the United States Fact Sheet.

As part of the recent focus of a task force in the Tampa area, a physician and a physician’s assistant who owned and operated 8 clinics were arrested for health care fraud and drug trafficking charges.

The clinics, Neurology & Pain Centers, operated in Tampa , Lakeland , Sarasota , Orlando and Jacksonville . State officials say that prescription drug overdose deaths are now more prevalent than overdose deaths for street drugs such as heroin and cocaine. The Tampa area, according to State officials, is responsible for 25% of those deaths. The allegations contained in the indictment include that the PA, Troy Wubbenna, offered free drugs to a 17 year old to recruit other high school students and that the physician, Dr. Jeffrey Friedlander, signed blank prescription pads so that drugs, particularly Oxycodone and Oxycontin, could be dispensed when he was not around.

To read more, click here.

HHS held a National Summit on Health Care Fraud in late January. The purpose was to bring together "leaders from the public and private sectors to identify and discuss innovative ways to eliminate fraud, waste and abuse in the U.S. health care system." However, groups representing providers who were initially approached about participation are angry at being shut out after being told that the meeting was for law enforcement and insurance company investigators. The providers have a point. If the government truly wants to know about waste in the system, shouldn’t they be seeking input from people in the system? The providers are angry, calling the exclusion a demonstration of government incompetence.

For more, click:here.

To read the transcript of the speech made by Attorney General Eric Holder at the Summit on Health Care Fraud click: here.