Articles Posted in Kickbacks

On June 4, 2020, an indictment was unsealed in Tampa at the U.S. District Court for the Middle District of Florida charging four Florida men with among other crimes, conspiracy to defraud the United States and paying or receiving health care kickbacks.

The charges arise out of the defendants’ participation in a multi-million dollar conspiracy aimed at defrauding TRICARE, the health care benefit program of the U.S. Department of Defense that provides health care coverage for active duty service members, the National Guard and Reserve members, retirees, their families and survivors.

compounding-service-940x600-1-300x191The indictment alleges that the co-conspirators owned and operated Florida Pharmacy Solutions Inc. (FPS) aimed at targeting TRICARE beneficiaries. Florida Pharmacy Solutions submitted claims to TRICARE for expensive prescription drugs that were specially compounded for beneficiaries, but were not prescribed legitimately, and were generated by paying illegal bribes and kickbacks.  The indictment alleges that the defendants submitted claims to TRICARE of more than $54 million for compounded drug prescriptions and that TRICARE paid out roughly $41 million to FPS.

telemed-300x167Having recently written here about “target letters,” I thought it would be helpful to discuss what happens in a fairly garden variety Medicare prosecution.  A few weeks back, a Florida man who the owner of a durable medical equipment company was charged in federal court in Savannah, Georgia, for his involvement in a Medicare kickback and telemedicine conspiracy.

Patrick Wolfe of Belleair Beach, FL, was accused in an information (a charging document that substitutes for a grand jury indictment) of conspiring to pay kickbacks for “leads,” which as it turns out were not actually “leads” at all.  The so-called “leads” were signed orders from nurse practitioners and doctors, which were then submitted to Medicare Part B and Medicare Part C for payment through Wolfe’s DME Georgia based company, Wilmington Island Medical Inc.  Reading the information lays out how the scheme operated.

Apparently, the feds have been on to Wolfe for a while.  In fact, Wolfe is the 25th defendant who has been charged in a far reaching telemedicine conspiracy arising out of “Operation Brace Yourself” and “Operation Double Helix” as part of the largest Medicare fraud ever prosecuted in the Southern District of Georgia.  As is so often the case, I would say that other defendants looking to cut a deal with prosecutors in hopes of lessening their sentence by way of earning a §5k1.1 motion for downward departure or a Rule 35 motion reduction of sentence probably fingered Wolfe as someone who was paying kickbacks for bogus leads.

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.

OIG-LogoWASHINGTON (March 26) – The Office of the Inspector General of the Health and Human Services Department has issued a Special Fraud Alert that physician-owned distributorships (PODs) are “inherently suspect” under the anti-kickback statute (AKS) and has listed suspicious characteristics that may increase the risk of fraud and abuse.

The alert focused on physician-owned businesses / PODs that obtain revenue from selling implantable medical devices ordered by their physician owners to use in procedures they perform on their patients at hospitals or ambulatory surgical centers.

“The opportunity for a referring physician to earn a profit, including through an investment in an entity for which he or she generates business, could constitute illegal remuneration under the anti-kickback statute,” said the IG alert .

Photobucket HOUSTON, TEXAS (AUGUST 16, 2011) – A Houston area nursing home administrator was arrested in connection with an indictment handed down by a grand jury in which he was charged with conspiracy, health care fraud and violations of the anti-kickback statute.
Kelvin Washington, 47, ran a Sugar land area nursing home and was purported to have received payments for referring dialysis patients to a specific ambulance transport service between 2003 and 2007. Washington also conspired to have doctors sign transport orders for dialysis patients. The patients whose names he used, however, were never admitted to that nursing home. By the time investigators compiled their case, Washington had helped amass over $1 million in false claims to Medicare. For his part in the scheme, Washington received over $20,000.
c2a.8.jpg

Photobucket DETROIT, MICHIGAN (AUGUST 5, 2011) – The United States Attorney’s Office for the Eastern District of Michigan unsealed an indictment, which charges 26 individuals including 12 pharmacists, 4 doctors, an accountant and a psychologist in a massive scheme to defraud Medicare, Medicaid and private insurance companies.

The indictment, containing 34 counts, alleges that a Canton pharmacist, Babubhai Patel, owned and controlled 26 pharmacies throughout Michigan and that he hid his ownership and control by using “straw owners.” It is alleged that Patel paid kickbacks, bribes and other incentives to doctors who would then write prescriptions for insured patients and direct those patients to one of Patel’s pharmacies to get their medications. The medications were not medically necessary, and in some cases, never provided. Patient recruiters also paid kickbacks to patients participating in the scheme.

The indictment also contains allegations regarding the alleged illegal distribution of controlled substances, including Oxycontin, Vicodin, Xanax and cough syrup with codeine. Distribution of these drugs were part of the kickbacks paid to patients and recruiters for their cooperation.

Photobucket MIAMI, FLORIDA (AUGUST 4, 2011) – A former convicted drug trafficker who served five years now stands accused of defrauding Medicare of more than $11 million through his Miami-Dade home health care agency. Luis Alejandro Sanz billed Medicare for treatment to supposed diabetics who did not suffer from the disease or need home care nurses to inject insulin.

Sanz and his wife, Elizabeth Acosta Sanz, are charged with conspiring to commit health care fraud and money laundering. The pair were also charged with paying kickbacks to recruiters who provided the couple’s agency, Ideal Home Health, with Medicare patients. U.S. Magistrate Patrick White viewed their alleged crimes as so egregious that at their arraignment he denied the defendants’ bids for bond stating they were a flight risk.

Investigators found evidence of 40 separate bank accounts through which the couple divided the millions they received from Medicare, and still have not been able to trace all the funds received.

Contact Information