Health Care Fraud Blog

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.

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.

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.

Health and Human Services Office of Inspector General released an updated fraud alert “Telemarketing by Durable Medical Equipment Suppliers” originally published in March 2003.

The Fraud Alert states in relevant part:

Section 1834(a)(17)(A) of the Social Security Act prohibits suppliers of durable medical equipment (DME) from making unsolicited telephone calls to Medicare beneficiaries regarding the furnishing of a covered item, except in three specific situations: (i) the beneficiary has given written permission to the supplier to make contact by telephone; (ii) the contact is regarding a covered item that the supplier has already furnished the beneficiary; or (iii) the supplier has furnished at least one covered item to the beneficiary during the preceding 15 months. Section 1834(a)(17)(B) specifically prohibits payment to a supplier that knowingly submits a claim generated pursuant to a prohibited telephone solicitation. Accordingly, such claims for payment are false and violators are potentially subject to criminal, civil, and administrative penalties, including exclusion from Federal health care programs.

The Office of Inspector General (OIG) has received credible information that some DME suppliers continue to use independent marketing firms to make unsolicited telephone calls to Medicare beneficiaries to market DME, notwithstanding the clear statutory prohibition. Suppliers cannot do indirectly that which they are prohibited from doing directly. OIG has also been made aware of instances when DME suppliers, notwithstanding the clear statutory prohibition, contact Medicare beneficiaries by telephone based solely on treating physicians’ preliminary written or verbal orders prescribing DME for the beneficiaries. A physician’s preliminary written or verbal order is not a substitute for the requisite written consent of a Medicare beneficiary.

To read the Fraud Alert: Click here.

All OIG Special Fraud Alerts are available on the OIG Web
site at: http://oig.hhs.gov/fraud/fraudalerts.asp

To read the Federal Register: Click here.

CMS uses contractors to process claims, but also to use sophisticated software to detect fraud patterns and make referrals for claims denials, audits and criminal investigations. At one time the system was somewhat fragmented, given that there are different contractors who process part A, B and D claims in given regions and a series of contractors were looking at data based upon particular types of claims or criteria. In addition, the flow of data prevented the contractors from analyzing and detecting fraud patterns until long after claims had been paid. Lately, CMS has moved to contractors who electronically review all claims for 7 regions searching for claims patterns that reflect fraud. The program, called ZPIC (Zone Program Integrity Contractors) has led, at least at the inception, to many providers receiving audit inquiries, chart reviews, and application renewals; and according to the program, the denial of $1.5 billion in claims in Florida alone since May.

Click here to read more.

We have done posts on the various monikers given to task forces, including the most recent in healthcare fraud, HEAT (Healthcare Fraud Prevention and Enforcement Team) and the agencies in involved in those investigations; the FBI (Federal Bureau of Investigation), OIG (Office of Inspector General), MFCU (Medicaid Fraud Control Unit); but the British, when they go to investigate large frauds have a more direct name, “Serious Fraud Office” which in England and Wales is a separate entity from the other governmental agencies and has specific criteria as to the amounts number of potential victims, and the general importance of the prosecution.

In the healthcare field, their most recent investigations have involved frauds on the British healthcare systems by drug manufacturers. The analogous agency in the United States would likely be the Department Of Justice or Main Justice and one of its individual units, but the names aren’t as cool. On the one hand, getting a visit from the Federal Bureau of Investigation is frightening, but it might be more so if you get an investigation from the Serious Fraud Office.

Click here to read more.

Often, we hear that white collar crime is treated differently than other types of crime. However, it is often who commits white collar crime that brings about different treatment. I had a client indicted for fraud related to a DME. Monthly, he would send me articles about large DME companies paying large fines and false claims settlements for the same conduct he was alleged to have engaged in and asked the simple question, “Why am I supposed to go to jail and they don’t?”

People arrested for crimes, and in particular health care fraud can find many rationales for conduct that objectively looks bad; some form the bases for defenses; some are to try to feel better. One reaction is generally the same for nearly all, whether it is speeding or a million dollar fraud, “everyone is doing it.” A variation on that theme, and a fair one is that often individuals and small companies are treated much differently than much larger companies.

In 2004, at the same time Pfizer was negotiating a resolution of a $460 million settlement with the United States for unlawful “off label” uses of its drugs, it also was planning and executing marketing campaigns for other drugs doing precisely the same conduct. The results, a huge fine and restitution, but no criminal charges for individuals. An individual that takes a million dollars in a Medicare fraud scheme is going to jail; as are employees and others most closely associated with that person and the scheme. The world’s largest drug company agreed it participated in a $1 billion in Medicare fraud and pays money. The company, or likely a subsidiary, also plead guilty to a crime, but no person goes to jail. $2 billion is not a small sum, but many sitting in prison wonder why the rules are different.

Currently, the highest dollar “amount of loss” category for sentencing purposes involving fraud is for a loss figure of $400,000,000 or more, garnering a 30 level sentencing enhancement; whereas $1,000,000 or more will get a 16 level enhancement. If someone participated in a scheme with a resulting loss of $1million dollars, they are likely to go to prison for a minimum (without other adjustments) of 41 months. This sentence could be applicable to the person who masterminded the scheme as well as some low level employee who merely assisted. A person who participates in a scheme with a resulting loss of $1 billion would be subject to prison for a minimum of 188 months; however in this case, no one goes to jail. Clients complain, "the rich (corporate defendants) get richer, while the poor (individual defendant) gets prison."

Click here to read more.

Part of the Health Care Fraud Task Force initiative in Miami, Houston, Detroit and Los Angeles has met with some success, and not so coincidently some of the cases have Miami roots. The FBI press release related to a plea in a in a $10 million infusion fraud case which mirrors frauds extensively prosecuted in Miami, a Miami resident plead guilty with regard to the fraud in Detroit.

MIAMI, FL (October 12, 2009) Today the editorial board of the Miami Herald weighed in on the national health care reform debate by pointing out that the current health care system - Medicaid and Medicare - has insufficient front-end mechanisms in place to detect fraud, waste and abuse and by calling for stiffer sentences saying, “unless penalties for fraudsters who steal millions of dollars are toughened so that the prison sentence is more than a legal slap, they'll keep scamming.”

The Herald offered up some eye opening statistics. Since 2005, federal prosecutors in South Florida have charged more than 900 Medicare offenders in cases totaling more than $2 billion in fraudulent claims. Across the U.S., taxpayers are hit with $60 billion in healthcare fraud each year.

In an effort to shape national healthcare policy, the editorial urged called on the President to press for more investigators to catch abuses when claims are first filed -- not down the road when government investigators and auditors eventually detect that millions have been erroneously paid out to crooks, some of whom have flown the coop.

According to The Herald, “health care reform bills [must] include more accountability, but unless there's sufficient money to enforce the rules and nab the scammers it won't get done right.” To read the editorial, click here.

Of general interest and with particular application in health care, the federal government has, over the course of several decades, criminalized an entire range of behavior that most people did not know or perceive to be criminal. This is not lost on the people who practice in the medical field; one client recently surmised “If it is a good idea in healthcare, it is probably a misdemeanor, if it is a great idea, it's a a felony.”

One other client, after being acquitted of federal criminal charges predicated upon the application of a vague regulation, asked “What did I do wrong?” The only answer I could come up with was “You made money in health care.”

The intricate and ever expanding number of regulations, national and local coverage determinations, and transmittals from Medicare and Medicaid often carry with them potential criminal penalties for fraudulent claims. Fox News has an interesting article about hearings being conducted by Congress on the issue of the over criminalization of federal law.

To read the Fox News article, click here.

A new moniker in the long list of federal task forces. Federal Agencies generally get the three letter moinker; FBI, IRS, CIA, OIG, DOD, etc. Task forces get more letters and try to do acronyms; HIDTA (DEA), FinCEN, OFAC (Treasury), OCDETF (DOJ).

Now we finally have a task force with a cool name: HEAT (Health Care Fraud Prevention and Enforcement Action Team). And they have been busy between Miami, Detroit and Huston. In one week, six indictments and allegations of $282 million in fraud from DME, to Pain Management, to therapy.

For more, click here.

FOR IMMEDIATE RELEASE

FORT LAUDERDALE, FL (June 29) After conducting a nationwide search, Thompson-West, the leader in legal information solutions, has selected Fort Lauderdale lawyers, Benson Weintraub and Robert David Malove to develop a guide and treatise in the area of Health Care Fraud law as part of a multi-topic initiative to expand West's coverage of white collar crime. The practice guide is tentatively entitled Health Care Fraud Practice Guide.

In 2007, the United Stats Department Justice created the Medicare Fraud Strike Force and launched operations in Miami, Florida. Since then, two more divisions of the Medicare Fraud Strike Force have commenced operations in Houston and Los Angeles. The proliferation of health care fraud cases being prosecuted by the federal government has triggered the need for criminal defense attorneys to be brought up to date with the latest strategies and techniques in order to bring about the best result possible for their clients.

The Healthcare Practice Guide will be a single volume addressing the practical and unique aspects of litigating health care fraud cases. Coverage will include information on strategies and principles used in the prosecution, defense and settlement of a criminal health care fraud case.

Thompson-West’s selection of Weintraub and Malove to author the Health Care Fraud Practice Guide comes as no surprise and is in recognition of their legal expertise, scholarship and dedication to staying on the cutting edge of issues pertaining to health care fraud defense.

ROBERT DAVID MALOVE is Board Certified as a specialist in criminal trial law by the Florida Bar Board of Legal Education and Specialization. Mr. Malove is distinguished trial lawyer with 25 years of experience in federal and state courts. He concentrates on legal issues relating to the white collar crime defense and healthcare fraud defense for which his Health Care Fraud Blog has received widespread recognition. In 2007, Mr. Malove completed post-graduate studies in Healthcare Corporate Compliance at George Washington University and furthered his comprehensive knowledge in the various state and federal laws regarding healthcare fraud and corporate compliance. Also, in 2007, Mr. Malove attended the Health Care Compliance Association’s Compliance Academy has successfully completed the Certified in Healthcare Compliance Examination, thus earning the "CHC" designation.

Prior to serving as an Assistant Public Defender in cases ranging from murder, fraud, to DUI, he graduated with a Doctor of Jurisprudence from Pepperdine University School of Law. Consistent with staying on the cutting edge of developments in criminal defense, one of Mr. Malove’s signature trademarks, he earned a Masters Degree in Forensic Science, from the George Washington University in 1981 - long before forensic science became part of our everyday lexicon. Before that, Mr. Malove was conferred a BS in the Administration of Justice from The American University School of Justice.

Mr. Malove has served as a guest commentator on COURT-TV and maintains membership in the National Association of Criminal Defense lawyers and Florida Association of Criminal Defense Lawyers. Mr. Malove is rated AV by Martindale-Hubble® as a pre-eminent lawyer.

Benson Weintraub is known in the profession as a “lawyer’s lawyer” based on the depth of his comprehensive expertise in practice in US District Courts, US Courts of Appeals, and the US Supreme Court, particularly with respect to corporate and individual defendant sentencing and post-conviction remedies, including appellate practice of unparallel effectiveness. He has been practicing law exclusively in the federal courts since 1981; took a leave of absence from active practice in 2004 to serve as a full-time Visiting Professor of Law at Hofstra University School of Law, from which he graduated in 1979 after attending graduate school at the Center for Administration of Justice at The American University, which also conferred a baccalaureate degree upon him in 1974 from its distinguished School of Government & Public Administration.

Professor Weintraub’s federal practice represents a wide array of legal disciplines ranging from the exclusively complex federal criminal and civil matters: concentrating on allegations of individual and/or corporate health care offenses, financial crimes, i.e., money laundering, fraud, securities violations; conspiracy; internet-based crimes; product substitution (nuclear and NASA components); obstruction of justice; official corruption; large scale narcotics Corporate/individual distribution cases; civil rights violations; constitutional issues; international extradition and multinational treaties; civil litigation and agency representation; and, quashing subpoenas/protective orders. The Firm provides advice, counsel, and representation to corporations and business entities regarding Compliance Programs, preventive maintenance through the design, implementation, monitoring and training of employees with respect to industry-specific compliance requirements to avoid the investigation or pursuit of civil, regulatory or criminal violations.

Professor Weintraub was appointed by the first Chairman of the US Sentencing Commission to help draft the ‘organizational’ and ‘individual’ Federal Sentencing Guidelines and he is proficient in the requirements of the Sarbanes-Oxley Act, HIPAA, the Stark Act, other business statutes and the Code of Federal Regulations (CFR). This experience enhances the firm’s ability to defend corporations/individuals to mitigate potential financial and other sanctions under the Sentencing Guidelines, particularly if settled by agency agreement. Even if criminally pursued, the Firm will ensure your company’s increased candidacy for a Deferred Prosecution Agreement (DPA).

Professor Weintraub is a highly esteemed academic whose numerous articles have been published or cited in The Yale Law Journal, Federal Sentencing Reporter, Federal Probation (Journal of Admin. Office of US Courts), Harvard Law Review, by Federal District and Appellate Judges, Notre Dame Law Review, Stanford Journal of Law & Social Policy and myriad other distinguished academic forums. His work has also been republished in a law school text book, “Sentencing, Sanctions, and Corrections.” He maintains an AV rating by Martindale Hubble.

Most recently, Mr. Weintraub has been involved with international cases with respect to anti-terrorism, counter-intelligence, and critical national security matters for the benefit of the United States. Mr. Weintraub has developed a unique and unparalleled manner of practice characterized by tenacity, relentless client dedication, consistently employing the power of optimal engagement in each case.

Mr. Weintraub has been qualified by federal and State Judges as an “expert witness” (Federal/State) in matters relating to sentencing, civil rights actions involving prisoners’ rights, and post-conviction remedies, e.g., habeas corpus.

WASHINGTON (June 24, 2009) – According to a joint press release issued by the Department of Justice Press U.S. Department of Health and Human Services, fifty-three people have been indicted for schemes to submit more than $50 million in false Medicare claims in the continuing operation of the Medicare Fraud Strike Force in Detroit, Attorney General Eric Holder, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius and FBI Director Robert Mueller announced today. The Strike Force in Detroit is the third phase of a targeted criminal, civil and administrative effort against individuals and health care companies that fraudulently bill the Medicare program.

While the indictments were returned by a grand jury in Detroit, individuals were arrested in Detroit, Miami and Denver as a result of phase three operations of the Strike Force. The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.

The Strike Force operations in Detroit are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a renewed effort announced in May 2009 between the Department of Justice and HHS to focus their joint efforts to prevent fraud and enforce current anti-fraud laws around the country. Last month, Attorney General Holder and Secretary Sebelius announced the expansion of the Strike Force into Detroit and Houston to build upon existing partnerships between the agencies in a heightened effort to reduce fraud and recover taxpayer dollars.

Today, federal agents from the FBI and the HHS Office of Inspector General (HHS-OIG) began executing arrest warrants in Detroit, Miami and Denver as part of a concentrated effort to address fraud in the metro-Detroit area. Charges were unsealed today against 53 individuals who are accused of various Medicare fraud offenses, including conspiracy to defraud the Medicare program, criminal false claims and violations of the anti-kickback statutes. The Strike Force operations in Detroit have identified two primary areas – infusion therapy and physical/occupational therapy providers – in which schemes were allegedly orchestrated to defraud the Medicare program.

According to the indictments, the defendants charged today participated in schemes to submit claims to Medicare for treatments that were in fact medically unnecessary and oftentimes, never provided. In many cases, indictments allege that beneficiaries accepted cash kickbacks in return for allowing providers to submit forms saying they had received the unnecessary and not provided treatments. Collectively, the physicians, medical assistants, patients, company owners and executives charged in the indictments are accused of conspiring to submit more than $50 million in false claims to the Medicare program.

The work of the Detroit Strike Force is another important step in the multi-phase enforcement and regulatory HEAT initiative designed to reduce the potential for Medicare and Medicaid fraud. Since its inception in March 2007 with phase one in South Florida and expansion to phase two in Los Angeles in May 2008, the Strike Force has obtained indictments of more than 250 individuals and organizations that collectively have billed the Medicare program for more than $600 million. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Each of the three Detroit Strike Force teams is led by a federal prosecutor supervised by the Justice Department’s Criminal Division’s Fraud Section in Washington, D.C., and the U.S. Attorney’s Office for the Eastern District of Michigan. Each team has four to six agents, with at least one agent from the FBI and HHS-OIG.

On June 15th, JANICE DAVIS, age 62, of West Monroe, was sentenced in United States District Court for the Western District of Lousianna for healthcare fraud. DAVIS was sentences to spend 15 months in federal prison and a term of three years of supervised release following confinement.

DAVIS was charged in July 2008 in a one-count indictment and later plead guilty to concealment or falsification of records in a federal investigation. After being served with a subpoena for documents from the Department of Health and Human Services (HSS), Office of Inspector General (OIG), on July 23, 2003, the defendant personally destroyed, concealed, covered up, and falsified records and documents, including physician service logs, with the intent to impede, obstruct, and influence an investigation into Medicare fraud by Aging Care Home Health Care ACHH. The investigation revealed that DAVIS produced documents that she created after receipt of the OIG subpoena and that many of ACHH’s doctors did not perform the services indicated in the records.

JANICE DAVIS has owned and operated ACHH, a Monroe-based company, since 1991 until its closure in 2005. ACHH provided nursing and therapy services to patients in their homes. Clinic-based doctors monitored the patients’ home health services by updating treatment plans and prescribing medications. Normally, a physician would bill Care Plan Oversight services directly to Medicare. Payment is made by Medicare directly to the physician for services rendered to home health and hospice patients.

The subpoena issued by HSS-OIG to Aging Care Home Health was a result of an October 2002 False Claims Act suit which alleged that ACHH tracked physicians “Care Plan Oversight” services and billed Medicare as a means to induce patient referrals from physicians. In November of 2004, the United States intervened in that suit alleging that Janice Davis, her husband Otis Davis and her company violated federal Stark and Anti-Kickback statutes by creating a sham physician advisory board and paying its members not for legitimate duties actually performed, but instead for Medicare referrals, which is illegal. The False Claims Act lawsuit ended in 2008 when U.S. District Judge Robert James granted several motions for summary judgment against Janice Davis, Otis Davis and Aging Care and awarded almost $5,000,000 in damages and penalties to the United States. In that suit, Judge James also found that Janice Davis had destroyed company records which were responsive to the federal subpoena and attempted to replace them with false records she fabricated in an attempt to mislead federal regulators and law enforcement.

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.

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.

Legislation before the Florida House and Senate would require a controlled substances reporting database containing all prescribing and dispensing information related to certain controlled substances.

The purpose and intent of the statute is to prevent drug abuse and profit making by the over prescribing of controlled substances. The database would be accessible by pharmacists and practitioners dispensing medications to patients to make sure a patient has not received multiple prescriptions for controlled substances. However, somewhat disconcerting from a civil liberties perspective is that the database would also be accessible to law enforcement as part of an “active investigation.” This includes State Boards, Medicaid fraud investigations or any investigation concerning fraud, prescribing, or dispensing controlled substances which seems to include any time law enforcement wants the information. Active investigation is defined as “an investigation that is being conducted with a reasonable, good faith belief that it could lead to the filing of administrative, civil, or criminal proceedings, or that is ongoing and continuing and for which there is a reasonable, good faith anticipation of securing an arrest or prosecution in the foreseeable future.”

Th read the legislation click here and here.

There has been a substantial crackdown by federal and state authorities in Florida over the last several years with regard to Medicare and Medicaid payments related to respiratory conditions such as COPD. The enforcement has typically focused on the durable medical equipment (DME) providers. However, after a large number of indictments related to DME companies and with Medicare moving toward a bidding process for DME suppliers, the focus has been turning to the physicians who prescribe DME and the often expensive medications associated with respiratory illness. According to a recent report by Medicare (via the Miami Herald), there was some cause for concern.

“Although South Florida is home to 2 percent of the nation's Medicare beneficiaries, the region accounts for 17 percent of the government program's total spending on inhalation drugs because of potential fraud, a new federal study says. In 2007, Medicare spent $143 million on claims for drugs to treat respiratory ailments in Miami-Dade County, according to the report by the Department of Health and Human Services released Tuesday. That's 20 times more than the amount Medicare spent in the Chicago area, which has twice as many beneficiaries.”

And this: “''In Florida alone, approximately 60 percent of the top 100 ordering physicians are the subject of administrative actions by [Medicare] or its contractors or are the subject of law enforcement investigations,'' acting administrator Charlene Frizzera wrote Inspector General Daniel R. Levinson in March.

The Miami Herald has been doing a fantastic job in recent months reporting the recent health care fraud enforcement efforts. Click here for the full report.

On January 7, 2009, defendants Carlos De Cespedes and Jorge De Cespedes, brothers and majority shareholders of The Pharmed Group, Corp. (Pharmed), were sentenced by U.S. District Court Judge Patricia Seitz to 108 months’ imprisonment as a result of their plea to two separate Informations. The Informations charged them with conspiracy to commit health care-related wire fraud and tax evasion, respectively.

For more: http://www.usdoj.gov/usao/fls/PressReleases/090107-01.html

Since the inception of Medicare Fraud Strike Force (MFSF) operations in 2007, federal prosecutors in Washington, D.C., have indicted 104 cases with 184 defendants in Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.

The MFSF is a multi-agency team of federal, state and local prosecutors and agents designed specifically to combat Medicare fraud. Strike force operations began in the Miami area on March 1, 2007.

The strike force teams are led by a federal prosecutor supervised by both the Criminal Division’s Fraud Section in Washington and the local office of U.S. Attorney. Each team has four to six agents, at least one agent from the FBI and HHS Office of Inspector General, as well as representatives of local law enforcement. The Florida MFSF teams operate out of the federal Health Care Fraud Facility in Miramar, Fla. Kirk Ogrosky is Deputy Chief of the U.S. Department of Justice Criminal Division’s Fraud Section

The Medicare Fraud Strike Force was conceived and implemented by the Section to combat Medicare fraud through aggressive use of “real time” law enforcement techniques. Between March and September 2007, MFSF prosecutors charged 117 individuals in 74 cases, including company owners, pharmacists, physicians and corrupt patients, and convicted 61.

Sentences imposed in Strike Force cases averaged nearly five years, including one of 151 months, and included payment of millions of dollars in restitution.

FORT LAUDERDALE, FL (September 17, 2008) Health care fraud blog publisher, attorney Robert David Malove, will be attending the 2008 Fraud & Compliance Forum in Baltimore next month.

The AHLA/HCCA Fraud & Compliance Forum will provide practical guidance on the pressing legal and compliance issues that have arisen in the last twelve months. For health lawyers, the program will highlight the most important legal developments in areas such as Stark, the False Claims Act, and the Anti-Kickback Statute. For compliance officers, the conference will cover important issues such as Part D compliance plans, compliance effectiveness, and fraud and abuse. The program’s uniqueness stems not only from the important content for health lawyers and compliance officers but also from the additional value of bringing together legal counsel and compliance officers in one educational arena. The networking opportunities and synergistic advances in fraud and abuse compliance make this program an essential educational forum for both health lawyers and compliance officers.

Continue reading "Healthcare Fraud Blog Publisher to Attend AHLA/HCCA Fraud and Compliance Forum" »

Exclusive COVERAGE BY Health CareFraud Blog

DALLAS, TX (August 27, 2008) - The federal government’s largest health fraud case involving online pharmacies was scheduled to conclude today with the sentencing of Ryokesh Johar Saran (Joe Saran) before US District Judge Jorge A. Solis in the Northern District of Texas. Saran as well and the 30 corporations he controlled were scheduled for sentencing. Sentencing for the corporate and individual defendants was indefinitely postponed due to the apparent heart attack Saran suffered en route to court.

Benson Weintraub, the nationally renown federal sentencing expert and a former full-time professor of law along with publisher of the Health Care Fraud Blog, Robert Malove, both of Fort Lauderdale have represented Saran and the corporate defendants for more than two-years and have been mounting a virtually unprecedented course of complex presentece litigation. The defense has challenged the criminalization of Group Purchasing Organizations (GPO), comparing it to “pharmaceutical arbitrage” according to recent defense pleadings.

Though the government’s theory of “intended loss” reflects a gross exaggeration of loss, artificially inflating the sentencing range called for by the advisory United States Sentencing Guidelines. The amount of restitution, $69,000, better reflects the relative severity of the offense behavior caused by Saran and 30 individual codefendants,

The case was launched by the US Attorney General’s office with much fanfare, but Saran, the lead defendant and virtually only one not yet sentenced, has challenged the methodology by which the government arrived at its loss calculations, particularly in view of the “actual loss” associated with the Mandatory Victim Restitution Act (MVRA).

Defense lawyers and US Attorneys are tracking the Saran case as a benchmark in health care fraud sentencing litigation based on the novel issues presented by his counsel. Similar theories of “loss” asserted by the DOJ Trial Attorneys from Washington were recently rejected by two federal judges in Miami before whom Weintraub and Malove recently prevailed at sentencing.

The defense issued subpoenas for agents of the FBI and FDA as part of it’s reaction to the prosecution’ failure to abide by its earlier commitment to turn over all Brady material in mitigation of punishment. The government moved to quash the subpoenas and that litigation, too, is still in progress. The defense preemptively filed a motion to enforce the government’s promise made one-year ago of an incremental turnover of Brady materials and the defendant’s statements. Parenthetically, Chad Meacham, lead counsel for the Dallas US Attorneys office, repudiated the discovery stipulation reached between the defense and his predecessor, Bill McMurrey, now a partner at the Dallas office of Bracewell and Giuliani.

According to the L.A. Times, the owner of a Los Angeles-area hospital and a man who acted as a recruiter were arrested August 6 on federal charges of defrauding Medicare and Medi-Cal by providing unnecessary health services to homeless people who were recruited from “Skid Row” with promises of payments.

Rudra Sabaratnam, 64, of Brentwood, an owner and top executive of a hospital; and Estill Mitts, 64, who resides near the Miracle Mile section of Los Angeles, the operator of a Skid Row “Assessment Center,” were arrested without incident.

Sabaratnam and Mitts were indicted under seal by a federal grand jury last week. The 21-count indictment, which was unsealed this morning following their arrests, alleges that Sabaratnam and Mills conspired to recruit homeless people to receive unnecessary health services for the purpose of committing health care fraud.

Sabaratnam and Mitts are jointly charged with conspiring to receive and pay kickbacks for patient referrals and to commit health care fraud. Sabaratnam is charged with eight counts of paying kickbacks for patient referrals. Mitts is charged with four counts of receiving kickbacks for patient referrals. Mitts is additionally charged with six counts of money laundering and two counts of tax evasion for allegedly failing to report more than $479,000 in income in 2005 and more than $620,000 in income in 2006.

If convicted of all counts, Sabaratnam faces a statutory maximum penalty of 50 years in federal prison, and Mitts faces a maximum possible sentence of 140 years in prison. Click here to read the complete text of the US Attorney's press release.

BENSON WEINTRAUB, the nationally renown federal sentencing expert and ANTHONY C. VITALE of the Health Law Offices of Anthony C. Vitale, PA presented a novel issue in health care fraud during a 5-day sentencing proceeding against Rodolpho Ramirez, a DME operator sentenced by US District Judge Adalberto Jordan (S.D.Fl.) to 24-months imprisonment for making fraudulent claims to Medicare and paying kickbacks to a local physician.

Weintraub and Vitale were successful in persuading Judge Jordan to assume, without deciding the issue, that an obscure provision of “Special Rules” in the calculation of loss under the Federal Sentencing Guidelines is instructive and resulted in a significant exclusion of “relevant conduct” claimed by the government and a Guideline range approximately half of that requested by John Cunningam and Jay Darden, DOJ Trial Attorneys from the Fraud Section in Washington.

The case attracted considerable attention in the legal profession with both criminal defense lawyers and a Deputy Attorney General observing portions of the extraordinarily lengthy hearing characterized by expert medical testimony about medical necessity, Medicare billing procedures, and medical economics.

The prosecutors argued that for the past year, they consistently employed another loss methodology in 70-100 other cases in the Southern District of Florida, a hotbed of Medicare Fraud, and every Judge accepted it, to which Judge Jordan replied, “Did anyone raise the issue asserted by Mr. Weintraub?” to which the government responded “No.”

Continue reading "DEFENSE LAWYERS PREVAIL IN HEALTH CARE FRAUD CASE" »

On April 2, the same day that seven co-defendants were indicted (click here) for their roles in an $11 million Medicare fraud scheme involving HIV infusion clinics, Rita Campos Ramirez who had pleaded guilty in August 2007 to a $170 million conspiracy to commit health care fraud was sentenced to 10 years in prison. According to the U.S. Department of Justice and local federal prosecutors, the scheme represents the largest known individual case of Medicare fraud in the history of the program.

Continue reading "Miami Woman Sentenced to 10-years for Role in $170M Healthcare Fraud Consiracy" »

Yeleiny Guerrero was the co-owner of Denis Medical Services, Inc. She was charged in a 6 count indictment with conspiracy to defraud the United States by causing the filing of false Medicare claims, conspiracy to commit health care fraud and 4 counts of health care fraud. Her codefendants were Ramon Oscar Soto, Araelia Nieto and Rafael Moreno. Soto was the leader of the charged conspiracy which involved three separate DME companies: P & A Medical, ROS Medical and Denis Medical Services. Nieto and Moreno were co-owners of the other two DME companies. All three of them pleaded guilty and were sentenced to time in the federal pokey: Moreno 18 months, Nieto 24 months and Soto 37 months.

The evidence at trial demonstrated that Guerrero established the corporation in her name, opened a bank account as the sole signatory, applied for all state and federal licenses and signed the Medicare Supplier Application so as to obtain a provider number. She worked at the office in a warehouse district daily from 8 am to 12 noon.

Continue reading "Defendant Acquitted of Healthcare Fraud " »

Healthcare Fraud Blog publisher, Robert David Malove, will attend the ACFE Healthcare Fraud Seminar Orlando March 24-25, 2008.

CEO Magazine reports that healthcare costs are within the top three business concerns, and for good reason: U.S. healthcare spending has increased from a mere $27 billion in 1960 to $2 trillion in 2005. That is a 7,100 percent increase in spending! Employers today face many unique regulations, systems, procedures and records, with the potential for fraudulent activity at a heightened level. Fraud fighters need an improved understanding of these staggering numbers and the types of healthcare fraud that may occur. This two-day, instructor-led course is designed for anti-fraud and audit professionals who work in the payer, provider, vendor and employer benefit areas or advise clients who operate within the healthcare continuum. Get the targeted training you need to keep up with the latest fraud schemes and related laws affecting this highly complex profession.

For more info, please visit http://www.ACFE.com

Professor Benson Weintraub, Esquire, a Ft. Lauderdale-based global health care attorney and counselor with an international practice and clientele, and a distinguished academic authority on the Federal sentencing of corporations and individuals, has been invited to present "Defense of a Criminal Healthcare Fraud Case" at Health Care Compliance Association's (HCCA) 12th Annual Compliance Institute to be held in New Orleans April 13-16, 2008.

Weintraub has served as a full-time Professor of Law. During his legal career, Porf. Weintraub has successfully represented complex white collar targets, corporations, business entities, executives, defendants, and witnesses as a tenacious, exclusively federal white collar criminal defense lawyer for more than 25 years.

Among his credits has defended more than 60 Physicians, Health Care Delivery Corporations & Organizations, DME Distributors, Internet Pharmacies, Pharmacists, Pharmaceutical Manufacturers, and public officials on hospital regulatory boards throughout the nation.

He also represented David Paul in the failed CenTrust Bank case as well as reputed drug lords, Willie Falcon and Salvador Magluta.

Weintraub recently represented Arne Soreide, a high profile telecom executive convicted after trial (by other counsel) in Fort Lauderdale of a $22m fraud, successfully convincing the U.S. Court of Appeals for the Eleventh Circuit in Atlanta that his 25 year sentence of imprisonment must be reversed, which the appellate court conceded was improper.

Weintraub was appointed by the first Chairman of the US Sentencing Commission to assist the fledgling agency in drafting its initial sentencing guidelines for organizations and individuals.

His extensive academic writing has been widely published or cited in Yale L.J., Harvard Law Review, Federal Sentencing Reporter, Stanford Journal of Law & Policy, Notre Dame Law Review, Federal Probation (US Courts), etc., and health care blogs.

Florida Board Certified Criminal Trial Lawyer Robert David Malove is Of Counsel to Benson Weintraub, LLC, upon whom a Masters Degree in Forensic Science, was conferred on Malove by the distinguished George Washington University in Washington DC. Malove received his JD from Pepperdine University School of Law. He has completed the Graduate Certificate Program in Healthcare Corporate Compliance at George Washington University and is Certified in Healthcare Compliance (CHC) by the Compliance Certification Board of HCCA. For more information visit www.healthcarefraudblog.com.

On January 9, 2008, U.S. Attorney for the District of Columbia Jeffrey A. Taylor announced that Raymond Jackson, former Chief Pharmacist at St. Elizabeths Hospital, pleaded guilty to stealing $95,000 of medication from the hospital. Taylor waived his right to be be indicted by a federal grand jury and instead entered a plea agreement a one count information charging him with theft or embezzlement in connection with health care in violation of Title 18, U.S. Code, Section 669.

Jackson, 48, of Ashford Drive, Waldorf, Maryland, will face up to ten years of incarceration when he is sentenced by the Honorable Emmet G. Sullivan on May 2, 2008. Under the federal sentencing guidelines, the advisory sentence Jackson faces is between 24 and 30 months in prison. The guidelines' recommended sentence sentence takes into consideration specific offense characteristics including a loss in excess of $200,000 and abuse of position of trust. Jackson will be ordered to pay restitution of $95,000 to St. Elizabeths and $140,882 to Kaiser Foundation Health Care Plan.

Continue reading " Former St. Elizabeths Hospital Chief Pharmacist Pleads Guilty" »