Health Care Fraud Blog

MIAMI CLINIC OWNER CONVICTED IN $24 MILLION HIV-INFUSION FRAUD

2010-07-22T20:25:21Z

On July 21, 2010, Raul S. Ramirez, 55, of Miami Gardens, FL, was convicted of one count of conspiracy to commit health care fraud, twelve counts of health care fraud, and three counts of money laundering.

According to the evidence presented at trial, the fraud involved purported treatment of HIV- positive Medicare beneficiaries at RA Medical Center, 2455 W. Flagler St., Miami, Florida. Ramirez paid Medicare beneficiaries to sign papers as though they had received treatment and to allow their Medicare numbers to be used to bill Medicare.

According to the evidence presented at trial, the billings were mostly for expensive drug infusion treatments for blood disorders that were claimed to be complications of the beneficiaries’ HIV condition. To justify the treatments, Ramirez caused the falsification of medical records showing severe symptoms such as spontaneous bleeding. Also, the blood samples from Ramirez’ clinic were found to be fraudulent. Blood tests from the same Medicare beneficiaries at legitimate hospitals did not show the purported blood disorders.

The evidence showed that Ramirez hired billing companies to bill Medicare, and had the bills submitted under the name of an elderly doctor, now deceased. The doctor traveled weekly to New York where he had a general medicine practice. The doctor was not in Miami on the dates of many of the doctor visits and treatments billed to Medicare. In this way, Ramirez caused approximately $24 million in fraudulent Medicare claims to be submitted and obtained approximately $6.9 million in payments. Ramirez deposited the Medicare funds into bank accounts that he controlled. He was convicted of money laundering counts related to his withdrawals of millions of dollars of the fraud proceeds for his own benefit.

Prior to the criminal trial, approximately $4.9 million was recovered in a civil forfeiture case. Also, based on the jury’s forfeiture verdict in the criminal trial, Ramirez will be ordered to forfeit an additional $960,688.54.

Sentencing has been scheduled for October 13, 2010. Ramirez faces a maximum sentence of ten (10) years' imprisonment on each of the 16 counts.

Feds Announce Largest Healthcare Fraud Takedown Underway

2010-07-17T20:07:40Z

MIAMI (July 16) - U.S. Agents have arrested 94 doctors, health care owners, and executives in a nation-wide crack down on fraudulent medicare billing, U.S. Attorney General and Health and Human Services Secretary Kathleen Sebilius announced today in Miami, where 24 of those people were arrested. After the announcement, Secretary Sebilius visited offices near the Miami airport, where nine people have been arrested since 2004, to see examples of empty storefronts of purported health care businesses.

To read the U.S. Attorney's press release, click: here.

To watch a video of the announcement of the operation produced by the Miami Herald's Chuck Fadely, click: here.

HHS Secretary Sebelius, U.S. Attorney General Holder Kick-Off First Regional Health Care Fraud Prevention Summit in Miami, Florida

2010-07-17T02:44:57Z

MIAMI (July 16, 2010) – U.S. Health and Human Services Secretary Kathleen Sebelius and U.S. Attorney General Eric Holder today kicked-off the first in a series of Regional Health Care Fraud Prevention Summits in Miami, Florida. The summit brought together a wide-array of federal, state and local partners, beneficiaries, providers, and other interested parties to discuss innovative ways to eliminate fraud within the U.S. health care system.

“The days of scamming dollars from our health care system are over,” said Secretary Sebelius. “Thanks to new tools contained in the Affordable Care Act, we are more prepared than ever to safeguard taxpayer dollars and ensure that the health care coverage of our seniors, families and children is secure. I’m proud of the tremendous success we’ve had so far, and look forward to continuing this important dialogue at fraud prevention summits across the country.”

“Despite all that’s been accomplished over the last year, we cannot yet be satisfied or become complacent. And we cannot ignore the fact that health care fraud remains a significant problem, said Attorney General Holder. “Each of you can be part of this and other public education efforts. Each of you can help to ensure that our health reform achievements are not exploited.”

The summit also featured educational panels that discussed best practices for both providers and law enforcement in preventing health care fraud. The panels included law enforcement officials, consumer experts, providers and representatives of key government agencies.

The recently enacted Affordable Care Act provides additional tools and resources to fight fraud in the health care system by providing an additional $350 million over the next ten years through the Health Care Fraud and Abuse Control Account (HCFAC). In addition, the Affordable Care Act toughens sentencing for criminal activity, enhances screenings and enrollment requirements, encourages increased sharing of data across government, expands overpayment recovery efforts, and provides greater oversight of private insurance abuses. 2

Investments in anti-fraud detection and enforcement pay for themselves many times over, and the Administration’s tough stance against fraud is already yielding results. In FY 2009, anti-fraud efforts put $2.51 billion back in the Medicare Trust Fund, a $569 million, or 29 percent, increase over FY 2008, and over $441 million in federal Medicaid money was returned to the Treasury, a 28 percent increase from FY 2008.

The Affordable Care Act builds on innovative strategies to fight fraud, such as the Health Care Fraud Prevention and Enforcement Action Team (HEAT), the joint operation between the Department of Justice (DOJ) in partnership with their 94 U.S. Attorneys Offices, CMS and the HHS Office of Inspector General that has unleashed special strike forces in seven regions to target health care fraud hot spots like South Florida, Los Angeles, Houston, Detroit, Brooklyn, Baton Rouge and Tampa.

On June 8, 2010, President Obama announced this nationwide series of regional fraud prevention summits as part of a multi-faceted effort to crack down on health care fraud. The Miami summit was the first in a series, with additional summits to follow in the coming months in Los Angeles, Las Vegas, Detroit, Boston, New York and Philadelphia.

In FY2009, the Department of Justice (DOJ), including its 94 U.S. Attorneys’ Offices, HHS’s Office of the Inspector General, and the Centers for Medicare and Medicaid Services (CMS) worked together to file charges involving criminal health care fraud violations against more than 800 defendants, secure 583 criminal convictions, open 886 new civil health care fraud investigations, obtain 337 civil administrative actions against individuals and organizations who were committing Medicare Fraud, and recovered more than $2.5 billion in criminal, civil and administrative actions related to our joint health care fraud enforcement activities.

The success of HEAT’s collaboration has been recognized by President Barack Obama, whose FY2011 budget request includes an additional $60.2 million to allow the Strike Forces to continue to expand into additional cities in the near future. The request also includes an increase of $250 million over FY 2010 to fight health care fraud, waste and abuse, and seven program integrity proposals that will give CMS new tools to fight fraud and which are projected to generate approximately $15 billion in Medicare and Medicaid savings over 10 years.

As part of ongoing HEAT activities, Attorney General Holder and Secretary Sebelius recently sent a letter to all state attorneys general urging them to work with HHS and federal, state and local law enforcement officials to mount a substantial outreach campaign to educate seniors and other Medicare beneficiaries about how to prevent scams and fraud beginning this summer. In the letter, the Attorney General and Secretary outline education and outreach efforts where state attorneys general could make a significant difference. These include efforts to cut the improper payment rate in the Medicare Fee for Service program in half by 2012; a series of regional fraud prevention summits around the country over the next several months; expanding the use of regional and local health care fraud task force meetings to improve the exchange of information with partners in the public and private sector, and to further coordinate anti-fraud efforts; HHS’s plans to double the size of the Senior Medicare Patrol and to put more boots on the ground in the fight against Medicare fraud; and a new educational media campaign this summer to educate Medicare beneficiaries about how to protect themselves against fraud.

Mission of HEAT:

* To marshal significant resources across government to prevent waste, fraud and abuse in the Medicare and Medicaid programs and crack down on the fraud perpetrators who are abusing the system and costing us all billions of dollars.

* To reduce skyrocketing health care costs and improve quality of care by ridding the system of perpetrators who are preying on Medicare and Medicaid beneficiaries.

* To highlight best practices by providers and public sector employees who are dedicated to ending waste, fraud and abuse in Medicare.

* To build upon existing partnerships that already exist between the two agencies, including our Medicare Fraud Strike Forces to reduce fraud and recover taxpayer dollars.

For more information, go to www.stopmedicarefraud.gov

HEAT Accomplishments:

HEAT’s creation and ongoing collaboration has allowed top-level law enforcement agents, criminal prosecutors and civil attorneys, and staff from DOJ and HHS to examine lessons learned and innovative strategies in our efforts to both prevent fraud and enforce current anti-fraud laws around the country. Since its creation in May 2009, HEAT has focused on key areas for coordination and improvement:

* HEAT members are working to identify new enforcement initiatives and areas for increased oversight and prevention to increase efficiency in pharmaceutical and device investigations. This includes close collaboration with DOJ’s Civil Division and U.S. Attorneys’ Offices, HHS’s Office of the Inspector General and the Food and Drug Administration.

* Medicare Fraud Strike Forces, which include teams from DOJ’s Criminal Division and U.S. Attorneys’ Offices, the FBI, CMS and HHS’s Office of the Inspector General’s offices have expanded from the 2007 launch sites of South Florida and Los Angeles to Houston, Detroit, Brooklyn, Baton Rouge and Tampa.

*Since announcing HEAT in May 2009, the Medicare Fraud Strike Forces have charged more than 375 defendants with defrauding Medicare of more than $615 million taxpayer dollars.

*In the three years since they were created, Medicare Fraud Strike Forces have charged more than 720 defendants with defrauding Medicare of nearly $1.65 billion taxpayer dollars.

* Since the False Claims Act was significantly amended in 1986 through FY 2009, DOJ’s Civil Division and U.S. Attorneys’ Offices have recovered nearly $16 billion in matters alleging fraud against government health care programs. This includes more than $2.27 billion in health care fraud matters pursued under the False Claims Act since HEAT was announced.

* As a primary tool in finding fraudulent activity, DOJ and HHS have expanded data sharing and improved information sharing procedures in order to get critical data and information into the hands of law enforcement to track patterns of fraud and abuse, and increase efficiency in investigating and prosecuting complex health care fraud cases.

* A cross-government health care fraud data intelligence sharing workgroup has been established to share fraud trends, new initiatives, ideas and success stories to improve awareness across the government of issues relating to health care fraud.

* Both departments have worked to increase training to prevent honest mistakes and help stop potential fraud before it happens. This includes CMS compliance training for providers, ongoing meetings at U.S. Attorneys’ Offices with the public and private sector, and increased efforts by HHS to educate specific groups – including elderly and immigrant communities – to help protect them. CMS has also expanded several of their programs, including a demonstration project on Durable Medical Equipment and their Medicaid provider audit program, to help monitor activities and detect fraud.

* Recognizing that training is also necessary for investigative and law enforcement personnel, both agencies have also increased opportunities within their departments. In November 2009, DOJ launched a new Medicare Fraud Strike Force training program designed to teach the Strike Force concept and case model to prosecutors, law enforcement agents and administrative support teams. CMS and the HHS Office of the Inspector General are also providing ongoing training to DOJ and HHS staff on the use of new technology to catch and quickly turn off funding to those who are defrauding the system.

* In January 2010, the first “National Summit on Health Care Fraud” was held to bring together leaders from the public and private sectors to identify and discuss innovative ways to eliminate fraud, waste and abuse in the health care system.

To view a webcast of the event, please visit www.hhs.gov/live

Attorney General & HHS Secretary Send Letter to States on New Outreach and Education Efforts to Combat Medicare Fraud

2010-06-09T01:28:32Z

WASHINGTON (June 8, 2010) – Attorney General Eric Holder and Secretary of Health and Human Services (HHS) Kathleen Sebelius have sent a letter to state attorneys general urging them to work with HHS and federal, state and local law enforcement officials to mount a substantial outreach campaign, beginning this summer, to educate seniors and other Medicare beneficiaries about how to prevent scams and fraud. The outreach campaign is another step in the ongoing work of HEAT - the Health Care Fraud Prevention Enforcement Action Team, a cabinet-level initiative launch by the Justice Department and HHS in May 2009. For more on HEAT, click: here.

"We are heading into the week when our first tax-free $250 donut hole rebate checks will be mailed out to Medicare beneficiaries who have fallen into the coverage gap. Accordingly, we are especially concerned about fraud and increased activity by criminals seeking to defraud seniors – and we are seeking your help to stop it," said Attorney General Holder and Secretary Sebelius in the letter. "Building on our record of aggressive action, we will use the new tools and resources provided by the Affordable Care Act to further crack down on fraud."

In the letter, the Attorney General and Secretary outline education and outreach efforts where state attorneys general could make a big difference. These include efforts to cut the improper payment rate, which tracks fraud, waste and abuse in the Medicare Fee for Service program, in half by 2012; a series of regional fraud prevention summits around the country over the next few months; regular health care fraud task force meetings to facilitate the exchange of information with partners in the public and private sector, and to help coordinate anti-fraud effort; HHS’s plans to double the size of the Senior Medicare Patrol and to put more boots on the ground in the fight against Medicare fraud; and a new educational media campaign this summer to educate Medicare beneficiaries about how to protect themselves against fraud.

Health Care Reform Legislation Seeks Funding for 13 New Health Care Fraud Stike Forces

2010-03-24T19:36:21Z

As reported previously here, a central feature of the Obama administration’s health care reform has been the HEAT (Health Care Fraud Prevention and Enforcement Action Team) initiative is the use of Strike Force teams. Strike Forces are multi-agency units of Federal and State law enforcement personnel designed to identify, investigate, and prosecute Medicare fraud. Strike Forces are supported by a CMS data analysis team and CMS program experts.

Since May 2009, this Administration has expanded Strike Force cities from Miami and Los Angeles, when Strike Force teams were launched in Houston and Detroit in May 2009 and in Brooklyn, Baton Rouge, and Tampa in December 2009. (To read more, click: here).

Building on the momentum started last May, U.S. Department of Health and Human Services Deputy Secretary William Corr and U.S. Department of Justice Acting Deputy Attorney General Gary Grindler, testified earlier this month before the United States House of Representatives Subcommittee on Labor, Health and Human Services, Education, and Related Agencies Committee on Appropriations and stated that the entire $250 million increase in the President’s Budget advances the goals of the HEAT initiative.

Strike Force defendants are also more likely to receive prison sentences and longer terms of imprisonment than more traditional criminal health care fraud defendants. Since the Strike Force’s inception, over 94% of all Strike Force defendants were convicted and sentenced to terms of imprisonment compared to 64% of all criminal health care fraud defendants. The average prison term for Strike Force defendants was 45 months, which was about 10% longer than the overall national average for federal health care fraud defendants over this same period.

New Strike Force locations are chosen based on thorough analysis of Medicare claims data, which helps identify hot spots of unexplained high-billing levels in concentrated areas, and a review of the most effective allocation of investigative and prosecutorial resources. The cost associated with Strike Forces expansion resulting in 20 locations by end-of-year FY 2011 is an estimated $46 million.

The Illusion of Cheaper Drugs From Canada

2010-03-15T15:40:32Z

The Governor of Montana, following a line of other politicians over the years, is promoting the idea of that state purchasing drugs for publicly run health care programs from Canada . However, for a number of reasons, such ideas have never gained any traction.

The position of the FDA has been rather clear, Canadian drugs are not US NDC (National Drug Code) products, and therefore are adulterated versions of the drugs they purport to be. Since the source of the drugs is not the US regulatory system, the drugs are "potentially" dangerous. As we pointed out on a previous posts (click: here and here), the actual danger was largely caused by Canadian and US drug officials themselves.

In reality, though, the name brand drugs being used by Canadians are in fact the very same drug as are offered in the United States , only in Canada the drugs are cheaper due not only market forces, but also government price controls. Americans pay more for drugs because the United States does not have any government restrictions on prices. Intellectual property rights in Canada and the US protect the right of one manufacturer to control the price of a name brand drug, therefore the price is what the market will bear; and Americans are generally willing to pay more for their name brand drugs than to allow the government to regulate commerce in the way Canada does.

The same is not true with respect to generic drugs. Generic drugs are name brand drugs whose intellectual property rights have expired, allowing any manufacturer to make and sell the drugs. The price of generic drugs in Canada is the same or more expensive than generic drugs in the United States because the prices of generic drugs are controlled solely by the market, since there are multiple manufacturers.

Typically, the only generic drugs that people attempt to import into the United States tends to be controlled substances. This is not due not to government pricing restrictions, but government availability restrictions. When the DEA began aggressively pursuing internet pharmacies in 2002 and pain management now, one aspect of that enforcement was to warn manufacturers and distributors that they would hold them accountable for the distribution of too many of their drugs and particularly to suspect providers, warning that their DEA registrations were at issue. In one instance, the DEA certificate for a major wholesaler was suspended for its Florida location because the supplier distributed too many controlled substances to suspect providers. This led many internet pharmacies to move off shore and some suppliers to illegally import controlled substances.

For more, click: here.

Sometimes Being The Low Man On The Totem Pole Doesn’t Help Much At Sentencing

2010-03-11T12:00:00Z

Alex Carrazana was a Medical Assistant. He is currently serving 72 months in prison for Medicare Fraud. He was for a time employed by a clinic called Midway Medical. At that clinic his job was to help with the infusion of drugs to HIV patients for therapy for a condition called thrombocytopenia, a bleeding disorder. He was not an owner, operator or licensed health care professional. Nearly everyone connected to the alleged conspiracy and probably even the government would concede he was not a major participant in the crimes (by way of disclosure, we represented other parties in this matter).

According to the government and the plea proffers of the co-defendants who were physicians, physicians assistant and owner of Midway, the clinic billed Medicare for approximately $8,000,000 in false claims. The claims were for infusion of a drug, RhoGAM, which in many instances was not provided. It was somewhat fortunate the drug wasn’t provided because the blood tests, detailing the need for the infusion therapy, had false data because the blood of the patients was altered by a person hired by the owner to mix the blood to generate false results.

There were apparently some facts that indicated Mr. Carrazana was aware fraud was going on and at a certain point he quit, according to his lawyer because he discovered what was going on and wanted out. Rather than pleading guilty with a plea agreement as most of the co-defendants did, he plead openly to the court because he and his lawyer disagreed with the facts the prosecutors would have required him to agree to as well as several sentencing guidelines adjustments; and he would have given up his right to an appeal.

By pleading guilty without a plea agreement, he and his lawyer could challenge at sentencing and on appeal everything from the amount of loss alleged down to his role in the clinic and the conspiracy. They did exactly this, and it did not turn out well - he unfortunately received a higher sentence than some of the other co-defendants. He appealed and the United States District Court for the 11th Circuit rejected all of his arguments and upheld his sentence. (To read the opinion, click: here).

The court found that leaving a conspiracy is not enough to cut off responsibility for the acts of co-conspirators after he left, therefore he was responsible for the full $8 million dollars in fraud. In addition, even though Mr. Carrazana did nothing sophisticated himself to aid in the commission of the crime and may have been unaware of the blood mixing, the court held that he should have known that his co-defendants would do something by sophisticated means, so he was also responsible for their acts in that sense.

To read more, click: here.

The War On Pain, Law Enforcement versus Medicine?

2010-03-10T12:00:00Z

When it comes to chronic pain, the current DEA war on pain management leads to a question: How much authority should the DEA have over the treatment of patients? According to the Association of American Physicians and Surgeons, “If you’re thinking about getting into pain management using opioids as appropriate: DON’T. Forget what you learned in medical school – drug agents [from the DEA] now set medical standards.” For more on this click: here.

Chronic pain, pain that lasts longer than 24 hours, affects approximately 25 percent of the U.S. population, that is 76 million people, according to the National Centers For Health Statisitics. Of those that reported chronic pain, 43% reported that pain has persisted longer than a year. More than 26 million people report having persistent back pain. Ouch! (To read more on this, click: here).

The treatment options, depending on the cause of the pain involve invasive measures such as surgery and injections, however such results can be short lived. Also, physicians who practice interventional pain find it difficult to get privileges to perform services at hospitals and have very high malpractice insurance premiums. Chiropractic adjustment and physical therapy are less invasive and less expensive, but for chronic pain are also considered by many patients to be of limited use.

What is left is treatment through combinations of other therapies and prescription drugs. The problem for physicians is that pain medications are being prescribed to help a person get through their day, not to solve the underlying medical issue that causes the pain. Therefore, the analysis is very subjective, a combination of the condition causing the pain, the patient’s history of previous treatment, and the amount of prescription drugs that currently work to ease that patient’s suffering. The challenge to the physician prescribing drugs designed to treat chronic pain, opioids, is to discern how much should be prescribed and when and if a patient should be cut off due to potential abuse.

Here is where the war on drugs encounters the reality of medical practice and pain management. As the advice of the AAPS makes clear, doctors are advised to and many doctors stay away from treating pain with narcotics because they are at risk of prosecution or discipline for doing so even when it is a necessary and valid treatment. Accordingly, there is a narrower and narrower pool of physicians willing to treat pain and do so largely in pain management practices. The result is that such physicians prescribe much more pain medications than ordinary physicians, because those are the only patients they see, those physicians will also likely be more liberal in the prescribing of those medications simply because they are so used to seeing chronic pain.

In comes law enforcement, curiously timing high profile raids on pain clinics smack dab in the middle of the Florida legislative session which ends in several weeks while two competing pain management bills are debated. (To read the proposed legislation, click here and here). Reporters, as they do with every law enforcement crime du jour, breathlessly report about how dangerous and prolific “pill mills” are, never once addressing any reason for the need or treatment of pain. Law enforcement describes how oxycontin pills sold to patients in Florida for $5 end up being sold in Kentucky for $20 on the street, without examining whether those people paying those premiums are merely drug addicts, or patients who cannot get pain treatment in Kentucky due to fearful physicians there.

The DEA, using only the vaguest of regulations, declares that physicians treating pain are criminals, dispensing excessive amounts of medications. The DEA does so without legislating, regulating or providing any guidance on the limitations of such dispensing. For example, if the DEA believes no patient should receive more than a certain amount of oxycontin in a prescription, create and publicly debate such a measure.

There is certainly much that can be debated in the treatment of pain and the prescribing of narcotics, but it is rarely debated, often with the words “pill mill” substituting for actual analysis of a much larger and complex issue. Tragically, many of those issues find their way into criminal courts, with jurors instead of health care officials, debating the medical validity of prescription medication dispensing.

Law Enforcement Focuses on Pain Clinics, Ignoring Patients Who Suffer

2010-03-09T16:32:39Z

According to an article in the South Florida Sun-Sentinel, at least 45 pain clinics opened in Broward and Palm Beach counties in the past year, while state law makers and state and local law enforcement agencies stepped-up their efforts to put an end to the operation suspected “pill mills.”

In August 2008, 66 pain clinics were open for business in Broward and Palm Beach counties combined. The Sun-Sentinel article reports that according to data available from the Florida Department of Health, the number centers issuing narcotic pain medications currently is more than the times what it was in August 2008 - with 122 in Broward to 122 and in Palm Beach County to 108.

Pain clinics “are proliferating despite our efforts," Broward Sheriff Al Lamberti said last week, after state and federal agents executed search warrants at three pain clinics owned or controlled by Christopher and Jeffrey George in Palm Beach County. The Georges' homes were also searched.

No arrests have been made yet, however, a federal law law suit has been filed in U.S. District Court in West Palm Beach. According to the law suit, three of the Georges’ clinics collected $14 million last year and dispensed more than 2.1 million pills. [To read the law suit, click: here.] Additionally, five doctors who worked at the clinics have had their DEA numbers to prescribe pain medications suspended. The doctors can either voluntarily agree to the suspension or can challenge the suspension before a DEA Administrative Law Judge at a hearing scheduled for May.

Independent sources close to the investigation indicate that patient files were properly documented, regular MRI's were required and prescriptions that issued were 100% medically necessary. From time to time, patients who were suspected of phony symptom ology were discovered, refused treatment and escorted off the premises. If you or someone you know has ever suffered from debilitating pain, then no one has to tell you that life can be pure hell without taking pain medication just to get through the day and attempting to perform even the simplest of tasks. The real tragedy in the "gung-ho, rah, rah" attitude of law enforcement targeting pain clinics, is that the overwhelming majority of patients have well-documented injuries requiring pain medication for treatment. These legitimate pain sufferers are the forgotten "victims" who unfortunately wind up as unintended by-product caught in the overreaching net of law enforcement, much like innocent dolphins caught in the nets of profit-driven commercial fisherman.

Palm Beach County and several cities in both counties have temporarily banned new pain clincs, reported by the HCFB here and here. "Palm Beach County is ahead of us [in law enforcement efforts aimed at detecting criminal activities at pain clinics]. We're [Broward County is] trying to play catch up now," Lamberti said. "On the street, [there are] too many targets, not enough deputies. We're really trying to be hard on it because it causes crime in the community. We think they know we are serious."

To read the Sun-Sentinel article, click here.

The Value of Patient Information

2010-03-09T02:04:37Z

Florida and a number of states attempting to outlaw so called ambulance chasing in personal injury cases have employed several methods to limit access to records of patients. First, statutes prohibit access to police accident reports for 60-days. Second, statutes as well as professional rules regulating the professional conduct of lawyers and health care license holders prohibit the direct solicitation of patients for services.

Nevertheless, there have been some novel ways developed to get around those laws, including every once in a while someone starting a “newspaper” to use a media exception to the rule regarding access to accident reports. With restrictions on direct access to accident information, a black market for patient information has developed as well as intricate referral networks, including everyone involved in accidents, from tow truck drivers and auto body employees, to ambulance service employees, to hospital employees.

All these involve payments of one type or another, generally in cash, for access to that information and people who employ themselves gathering that information. In a recent case, a Miami man was indicted for a second time for bribing employees, first of an ambulance company, and then hospital employees to get patient information for personal injury attorneys.

To read more, click: here.

The Return Of The Medicare Bounty Hunters

2010-03-05T00:05:34Z

In the 1990’s there was a system in place that seemed reasonable at the time. The government hired private companies to audit hospital cost reports on the government’s behalf and to add additional incentive, those companies, generally large insurance companies, would receive bonuses based upon funds recovered. This lead to a sort of system where there were "gotcha" games between the auditors and providers, the providers would try and maximize their reimbursement knowing that the auditors would be specifically looking for places to cut.

Making matters worse, the auditors tended to ignore “errors” that benefited the providers because those errors didn’t benefit the government contractors. So too, the providers, in analyzing and contesting the audits through the appeals process would only report “errors” that benefited the providers. This system eventually led to the prosecution of a number of hospital executives as well as one of the largest whistleblower cases ever. (Click here to read more about John W. Schilling and the case against HCA/Columbia) The government ended that incentive program in part because of the gaming of the system it produced.

Well, it is back again. The government has contractors, called recovery audit contractors, or RACs that receive between 9-12% of overpayment funds they recover on behalf of the government on Medicare audits. In just three years, they have reportedly collected over $1 billion dollars. The only problem, except that the last time it produced somewhat unseemly results, is that these contractors are required to report to law enforcement instances of criminal fraud as opposed to billing errors or overpayment.

To date, only two cases have been referred to for criminal prosecution. The motive, you might suspect, is financial. The RACs don’t get any money for cases referred for criminal prosecution, only for their own recoveries. This suggests that the RACs are erring on the side of overpayment as opposed to fraud, which still benefits the government as well as the RAC and the provider; no harm, no foul. However, the implicit or explicit threat of criminal referral may be an interesting bargaining tool to make these recoveries. Another interesting twist is that the RACs can go back and audit the same providers over and over again, collecting on overpayments (not fraud) no matter how many times the provider makes the same errors.

To read more, click here.

Shut Up! Don't Call Attention to Yourself

2010-03-03T22:18:26Z

Whatever you do, don't harass the Medicare fraud investigators. A kind of simple rule, if you are committing a crime (no one I represent does that), don’t go out of your way to send harassing emails and phone calls to investigators, including death threats; it tends to incentivise them a bit to arrest you.

To read what happened to one defendant who couldn't get out of his own way, click here.

Delray Beach "Pain Clinic" Management Regulation: Great Idea, No Way To Carry It Out

2010-02-28T22:47:09Z

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.

Undercover Patients for Medicare Fraud Investigations?

2010-02-25T23:32:50Z

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.

Create A Problem to Solve A Problem; An Internet Canadian Pharmacy Originator Loses His License

2010-02-25T15:01:04Z

In case where it appears the governments of the Untied States and Canada to stop a practice they disfavored, created a worse problem, the originator of the Canadian internet pharmacy business model gave up his license to practice pharmacy in Manitoba, Canada after it was alleged he had been selling misbranded and counterfeit prescription drugs. The story is somewhat more complicated than that.

Prior to the passage of the Medicare Part D prescription drug act, the purchase of name brand prescription drugs from Canada was becoming a significant business. Canada has price controls on prescription drugs and a name brand medication can be purchased in Canada for a significant discount over those purchased in the United States. Seniors and uninsureds looking for cheaper drugs found access to Canadian drugs either through storefront brokers in the United States or over the internet. However, since Canadian pharmacies could not accept US physician prescriptions directly, Canadian internet pharmacies came up with a system whereby a US citizen would fax their prescription to the pharmacy, a Canadian physician working with the pharmacy would write a prescription for the same drug and the Canadian pharmacy would fill it.

One of the originators of the internet Canadian pharmacy business was Andrew Strempler, who created Mediplan Pharmacy in Canada to service US customers and Mediplan did very well for a while. However, the FDA alleged that since the drugs did not come through the US system, the purchases were unlawful and moved with varying success against the US based companies involved in the business but were unable to move against the Canadian pharmacies that were following Canadian law.

However, the industry in the US and Canada was dealt more severe blows by Medicare Part D, which took away a large part of the seniors market. Also, the Canadian government, feeling pressure from manufacturers, enabled Canadian branches of US manufacturers to place limits on the number of name brand drugs a Canadian pharmacy could order and receive. To get around these limitations, it was alleged that Mediplan and other pharmacies began dispensing prescription drugs purchased from countries outside of Canada to get around the limits the Canadian government and manufacturers placed on purchases. The FDA seized several shipments form Mediplan to US customers and alleged the drugs shipped were not Canadian drugs, but were drugs purchased from 27 different countries and were therefore misbranded and counterfeit.

While the FDA claimed this proved they were right all along about the purported safety of Canadian pharmacy purchases, the system actually was much safer before the manufacturers, US and Canadian government got involved to try and solve a problem, drug safety, they wound up creating.

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