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BigStock_KickBackTypically, when I meet with clients for the first time, it never ceases to amaze me that they have little or no idea what constitutes Medicare fraud is and didn’t know they couldn’t be doing the things they were doing.  So, I decided to write this post to give a primer to explain: what is Medicare Fraud?

For those who are working in the medical field, whether they are doctors, corporate owners of medical practices, pharmacists, pharmacy owners, lab owners, durable medical equipment business owners, just to name a few, it can’t be overemphasized that it is essential to be familiar with the basics of Medicare fraud.

With this in mind, I want to make sure you are informed about how someone can get themselves in trouble. In general, Medicare fraud refers to submitting a false claim in a Medicare beneficiary’s name to a governmental sponsored health care program for reimbursement.

Owner of “Serenity Ranch Recovery” Found Guilty in $38 Million Fraud Scheme

PGPd-1-300x144Fort Lauderdale, Florida (March 2020) – After a six-week jury trial Sebastian Ahmed42, of Delray Beach, Florida, was convicted of conspiracy to commit health care fraud and wire fraud, five counts of health care fraud, conspiracy to commit money laundering, and eleven counts of money laundering.  According to the U.S. Attorney’s Office, the co-conspirators took advantage of and exploited vulnerable drug addicts, the most of whom were only 18 to 26 years old; falsified paperwork; and entered into various kickback arrangements, so that they could pocket millions of dollars of falsely and fraudulently obtain fund for their own personal use and benefit.  Out of all the co-conspirators, Sebastian Ahmed profited the most, netting more than $2.8 million in just less than a three year period.

Sentencing is scheduled for August 6, 2020.  As for the health care fraud and wire fraud conspiracy and money laundering conspiracy convictions, Amhed defendant faces a statutory maximum of 20 years in prison per count.  As to the health care fraud and money laundering convictions, Amhed faces an additional maximum statutory sentence of 10 years in prison.

Corrupt-doctorIn a nutshell, the federal Anti-Kickback Statute and Stark Law make it a crime with serious penalties for providers of medical services to pay or accept any form of remuneration such as kickbacks or anything of value in exchange for receiving referrals of patients who obtain medical treatment paid by government healthcare programs including Medicare and Medicaid, and from entering into certain kinds of financial relationships.

The Anti-Kickback Statute and the Stark Law are designed to keep medical treatment decisions independent from any influence of possible financial gain. The Anti-Kickback Law and the laws prohibiting other unlawful financial arrangements are designed to prevent healthcare providers from referring patients for healthcare services that are not medically necessary.

The Department of Justice has declared that, “[p]atients are entitled to be sure that the care they receive is based on their actual medical needs rather than the financial interests of their physician.”

TRENTON, NJ (Nov. 22, 2019) Kenneth Sun, M.D., 58, of Easton, PA, pleaded guilty to one count of conspiracy to defraud the United States and to pay and receive health care kickbacks in U.S. District for the District of New Jersey.

Subsys-300x300Sun admitted that from 2012 to 2016, he conspired to solicit and receive more than $140,000 in bribes and kickbacks from Insys Therapeutics, a pharmaceutical company headquartered in Arizona, in exchange for him prescribing more than 28 million micrograms of Subsys, a powerful opioid narcotic that is designed for rapid entry into a patient’s bloodstream by being sprayed under the tongue.

Subsys contains fentanyl, a synthetic opioid pain reliever that is approximately 50 to 100 times more potent than morphine.  The U.S. FDA approved Subsys solely for the “management of breakthrough pain in cancer patients who are already receiving and who are tolerant to around the clock therapy for their underlying persistent cancer pain.”  Dr. Sun admitted that he broke the law when he prescribed Subsys to patients for whom Subsys was completely medically unnecessary, not eligible for insurance reimbursement and unsafe.

Housecalls.jpgDETROIT, MI (March 5, 2014) – Jose Mercado-Francis, 60, a former Detroit-area physician pleaded guilty today in the U.S. District for the Eastern District of Michigan to one count of conspiracy to commit health care fraud in violation of 1371 for his role in an $11.5 million health care fraud scheme.

Even though Mercado-Francis’ medical license had been revoked and he was not licensed to practice medicine in Michigan, that didn’t stop him. Mercado-Francis admitted in his plea agreement that, from September 2009 and through February 2012, he held himself out to the public as a licensed medical doctor and claimed to provide physician home health services to Medicare beneficiaries.

Court documents allege that Mercado-Francis prepared medical documentation that licensed physicians signed as if they had actually provided services to Medicare beneficiaries, when, in fact, no such services were provided. The phony health services were then submitted to Medicare as if licensed physicians had performed them.

On December 16, 2014, a Houston psychiatrist was arrested on charges related to her alleged participation in a $158 million Medicare fraud scheme involving false claims for mental health treatment.

Sharon Iglehart, 56, of Houston, was charged in the U.S. District Court for the Southern District of Texas by indictment with one count of conspiracy to commit health care fraud and four counts of health care fraud. According to preliminary calculations, the United States Sentencing Guidelines call for a sentence that is more than twice the maximum penalty of 10 years in prison that can be imposed on each count. Without taking Dr. Iglehart’s role in the conspiracy into consideration, the guidelines call for a sentence in the range of 235-293 months.

According to the indictment, Iglehart is alleged to have participated in a scheme to defraud Medicare that started in 2005 and continued until May 2012. Iglehart is accused of having caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services to Medicare through Houston’s Riverside General Hospital. A PHP is a form of intensive outpatient treatment for severe mental illness.

LOUISVILLE, KY. – How does a doctor get convicted of money laundering, health care fraud and doling out prescription drugs like jelly beans and then sentenced to 230 years in prison with a fine of $10.2 million? By not having a health care fraud attorney willing to ask his client the tough questions, nor one who will give his client the honest truth, or that will dig in for the fight and not accept the maximum sentence and fine for his client. That is what could happen to a Louisville doctor indicted by a federal grand jury earlier this month.

After a year-long investigation by the police, the FBI, and DEA, the grand jury indicted Dr. George Kudmani.

The indictment alleges that the doctor would see more than 35 patients per day. Earlier this year, the New York Times reported that new doctors average eight minutes per patient. Doctors who have been practicing for a number of years would probably need less time per patient. Thirty-five patients per day would be an easy figure to reach.

Also known as the “Stark Law,” physician self-referral is a type of health care fraud that a physician may run into when he or she or a family member has a vested interest in another designated health service (DHS). It prohibits a physician from making referrals to these conflicting entities and violations can result in civil money and other penalties.

The Three Points of the Physician Self-Referral Law

The purpose of this law is to prevent a physician from making referrals based upon self-interest rather than the patent’s best interest. When first introduced in 1989 the law only applied to physician referrals to clinical laboratory services. Over the years, Congress has expanded the restrictions to include more designated health services and applied much of the law to the Medicaid program.

handcuffs-and-calculator-on-headlines-about-white-collar-crime.jpgCHICAGO (August 27) — DIKE AJIRI, 42, of Wilmette, CEO of Mobile Doctors, a Chicago-based business which manages physicians who make house calls in six states, and BANIO KOROMA, 63, of Tinley Park, a physician one of its physicians in Chicago were arrested on Medicare fraud charges. The charges allege a scheme to fraudulently increase (also known as “upcoding”) Medicare bills for in-home patient visits that Mobile Doctors falsely claimed were more extensive and lasted longer than they did. The charges also allege that Mobile Doctors’ physicians falsely certified that patients were confined to their homes, paving the way for home health care agencies to seek Medicare reimbursement for fees for additional services for patients who were not qualified to receive them.
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doc-thumbWASHINGTON, D.C. (August 15) – On August 14, 2013, a Detroit-area physical therapist who was also an owner of a home health agency entered a guilty plea to one count of conspiracy to commit health care fraud in the U.S. District Court for the Eastern District of Michigan regarding his role in a $22 million home health care fraud scheme. Bhagat faces a maximum penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for November 12, 2013.

According to information contained in plea documents, Bhagat admitted that over about a year and a half period beginning May 2009, he conspired with others to commit health care fraud through billing Medicare for home health care services that were either not actually rendered or not medically necessary.

Bhagat admitted that his co-conspirators paid kickbacks to patient recruiters to obtain the information of Medicare beneficiaries, which the co-conspirators then used to bill Medicare. Bhagat and his cohorts then created phony therapy files to falsely document physical therapy services were provided to Medicare beneficiaries, when in fact no such services had ever been provided and if provided were not medically necessary in the first place.

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