Tag: Fraud

 
 

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[MM Curator Summary]: 2 labs in KY ran a lab scheme tied to court-ordered drug tests.

 
 

 
 

Clipped from: https://www.kentucky.com/news/local/crime/article275259571.html

Two Kentucky-based businesses have agreed to collectively pay about $1.7 million to resolve allegations they illegally billed Medicaid and Medicare for court-ordered drug testing.

One of the accused companies was Blue Waters Assessment and Testing Services, LLC, which is based in Lexington and provides services related to urine drug testing, including tests for individuals ordered by the Fayette County family courts as part of their cases.

The Lexington company sent the specimens to VerraLab JA, LLC, a clinical laboratory based in Louisville that does business under the name BioTap Medical, according to the U.S. Attorney’s Office. BioTap performed the urine drug tests and billed them to Kentucky Medicaid and Medicare.

The BioTap group received payments from medicaid and medicare which they were not entitled to and agreed to pay nearly $1.5 million as part of a settlement against the false claims. Blue Waters Assessment and Testing and its owner, David Waters, agreed to pay an additional $250,000 for roles in submitting the claims, according to the U.S. Attorney’s Office.

The government said billing these tests to state Medicaid and Medicare violated the False Claims Act, which prohibits fraudulent claims being submitted.

 
 

“Submitting false claims to Medicare or Medicaid wastes taxpayer dollars and undermines the integrity of those programs,” said Tamala E. Miles, special agent in charge at the Department of Health and Human Services, Office of Inspector General.

As federally-funded health insurance, Medicaid and Medicare do not pay for tests given to satisfy a court order.

Medicaid and Medicare only pay for laboratory tests used for medical diagnosis or treatment, according to the U.S. Attorney’s Office.

“In fact, Medicaid’s regulations explicitly prohibit reimbursement for laboratory tests, such as urine drug tests, that were ordered by a court,” the United States Attorney’s Office said.

“The federal Medicaid and Medicare programs are designed – and funded – to provide health care benefits to eligible individuals with a medical necessity,” Carlton S. Shier, IV, U.S. attorney for the Eastern District of Kentucky, said in a press release. “These lab tests were not medically necessary and were improperly billed to these programs.

“It is important to all of us that steps are taken to return such misapplied funds to their appropriate purpose – providing medical care.”

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: Aronowitz, et al stole $24M of your tax dollars using an upcoding scheme and re-using single use skin grafts.

 
 

Clipped from: https://www.beckershospitalreview.com/legal-regulatory-issues/california-physician-pays-24m-to-settle-medicare-medicaid-overbilling-allegations.html

A California plastic surgeon will pay $23.9 million to settle allegations his practice submitted false claims to Medicare and Medicaid. 

According to an April 28 news release from the Justice Department, the settlement resolves allegations that Joel Aronowitz, MD, his son Daniel Aronowitz, and Dr. Aronowitz’s medical practices and billing company submitted false claims to government payers. 

The Justice Department alleged Dr. Aronowitz manipulated billing codes for skin graft procedures to maximize reimbursement. The department also alleges Dr. Aronowitz improperly disposed of single-use skin grafts and reused portions for later procedures. The improper disposal resulted in “thousands of instances” of double-billing to Medicare and Medicaid, the department alleges. 

As part of the settlement, Dr. Aronowitz and his practice are barred from billing Medicare or Medicaid for 15 years. Daniel Aronowitz is excluded for three years. 

The state of California paid a portion of the alleged false Medicaid claims and will receive nearly $500,000 in the settlement. 

Subscribe to the following topics: californiahealthcare fraudfalse claims actmedicare fraudmedicaid fraud

 
 

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[MM Curator Summary]: Joyce Agu stole $3M of your tax dollars by paying other providers to lie and say her clients could get home health services.

 
 

 
 

Clipped from: https://www.texasattorneygeneral.gov/news/releases/investigation-paxtons-medicaid-fraud-control-unit-leads-60-month-prison-sentence-home-health-care

Attorney General Paxton’s Medicaid Fraud Control Unit investigated and helped secure the conviction and sentencing of Joyce Agu, a Sugar Land resident, to 60 months in federal prison, followed by three years of supervised release. Agu was convicted for conspiracy to pay and receive kickbacks and was also ordered to pay $3,068,952 in restitution.  

“Fraudulent schemes like the one perpetrated by Ms. Agu undermine our health care system and maliciously exploit funding that comes from hardworking taxpayers,” said Attorney General Paxton. “We will continue to tirelessly pursue and bring to justice individuals who steal money from public programs.” 

Agu was convicted of paying other individuals to certify that her clients were able to receive home health services in order to then bill Medicare. This was done despite the fact that the individuals did not qualify for the services, or even receive services at all in some cases.  

The investigation was conducted by Sergeant Dino Vergara, Investigative Auditor Wanda Guess, and Captain Rick McCollum of Attorney General Paxton’s Medicaid Fraud Control Unit, in cooperation with the Department of Health and Human Services’ Office of Inspector General and the FBI. Assistant U.S. Attorneys Rodolfo Ramirez and Grace Murphy prosecuted the case. 

In the last fiscal year, Attorney General Paxton’s Medicaid Fraud Control Unit recovered over $236 million in taxpayer funds. If you suspect Medicaid fraud or abuse, or patient neglect, please report it by visiting the Texas Attorney General’s website. 

 
 

 
 

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: TX HHS says BCBS of TX can do better next time after finding $18k of DME improper payments it let slip through.

 
 

Clipped from: https://oig.hhs.texas.gov/about-us/news/mco-overpaid-durable-medical-equipment-vendors-more-18000

The OIG recently audited Blue Cross and Blue Shield of Texas (BCBS), finding the managed care organization lacked adequate controls to detect fraudulent claims for durable medical equipment (DME).  

According to the report, BCBS did perform some oversight activities for DME claims, including complying with pricing, timing and claim payment timeliness requirements. However, not all requirements were met before issuing reimbursements to vendors. Specifically, BCBS did not consistently: 

• Comply with Texas Medicaid Provider Procedures Manual (TMPPM) benefit limits in accordance with the Uniform Managed Care Contract and the Uniform Managed Care Manual.
  
• Conduct oversight activities to ensure DME was authorized, medically necessary, or received by members.
  
• Validate or accurately price miscellaneous DME claims.
  

BCBS stated that its policy was to follow TMPPM requirements in processing DME reimbursements. Still, auditors found that the MCO had not provided a subcontractor with information on properly processing DME claims. The lack of suitable oversight resulted in 39 inappropriately processed claims totaling more than $18,105.57. 

In response to the audit, BCBS stated that it has already taken steps to improve its controls and prevent overpayments, including implementing a new system to verify the delivery of DME items. The MCO also updated policies to ensure reasonable prices and committed to reviewing and investigating potential fraud cases more thoroughly.

These efforts align with the OIG’s recommendations, including that BCBS: 

• Ensure that its claims processing subcontractor implements edits to ensure claims are reimbursed according to required benefit limits and exclusions for: 
  

 
 

• Total rental cost limits.
  
• Allowed DME amounts. 
  
• Multiple claims for the same DME to the same member in one calendar month. 
  
• Duplicate claims. 
  
• Develop and implement oversight processes to verify its claims processing subcontractor identifies and denies claims for related procedure codes in accordance with benefit limit and exclusion requirements.
  
• Develop oversight processes or provide DME providers with guidance for (a) prior authorization requirements, (b) maintaining a physician’s order to demonstrate the member’s need for the DME, and (c) delivery confirmation demonstrating the member received the DME. 
  
• Develop and implement a process to verify miscellaneous DME claims are paid in accordance with BCBS requirements.
  

Auditors also found that BCBS should repay the state of Texas $18,105 for processed claims that did not meet the TMPPM requirements. 

 
 

 
 

 
 

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

[MM Curator Summary]: The conclusion of the Brian Hyatt story- turns out his egregious upcoding for BH services added up to about $1.1M of your tax dollars.

 
 

Clipped from: https://www.5newsonline.com/article/news/crime/medicaid-fraud-settlement-dr-hyatt/527-669584d9-f4d2-4ae5-bc61-2dbfbe677667

SPRINGDALE, Arkansas — Northwest Health has reached a settlement with the Arkansas Attorney General’s office after an investigation found evidence claiming Dr. Brian Hyatt, former head of the behavioral unit in Springdale, had committed extensive Medicaid fraud.

Dr. Hyatt stepped down from his role as chair of the Arkansas State Medical Board after he was accused in an affidavit by investigators with the AG’s office.

Hyatt, formerly the chairman of the state medical board, said in an email on March 1, 2023, that he would like to “step aside” as chairman and “move to a non-executive committee, voting member… until standing issues resolve.”

Dr. Hyatt was appointed by former governor Asa Hutchinson in 2019, according to his practice’s website bio. 

In the $1.1 million settlement, Northwest denies it knew it violated the Arkansas False Claims Act. The hospital terminated its contract with Hyatt in May 2022 after lawsuits were filed against him and the hospital.

The payments cover nearly 250 “concerning” Medicaid claims made by Hyatt during his tenure at the Northwest Behavioral Unit in Springdale.

Alleged Medicaid fraud

The Office of Medicaid Inspector General (OMIG) sent a letter to Dr. Hyatt on Feb. 24, 2023, stating that allegations of Medicaid fraud that were made against him were deemed credible. OMIG said that Medicaid services performed by Dr. Hyatt were suspended.

According to the investigation, Hyatt had billed more Medicaid recipients using the highest code than any other doctor had billed for all of their patients in the state.

The investigation notes that between Jan. 1, 2019, and May 2022, 99.95% of Dr. Hyatt’s claims for Medicaid were billed under the highest code, which receives the most amount of Medicaid payment from the state.

For reference, the document states that between that same timeframe, on average nationally, only about 21% of Medicaid billing was for the highest code.

The Attorney General’s office says that employees in the unit were told by Hyatt to always bill the highest code with each patient.

While going over months of surveillance video of the behavioral unit while Hyatt was the director there, the investigator said that after reviewing hundreds of hours and several days of footage, at no point did they see Dr. Hyatt enter a patient’s room or have contact with a patient, only him walk up and down the hall.

Dr. Hyatt also is facing nearly a dozen lawsuits in civil court claiming false imprisonment and other accusations relating to allegedly keeping them in the behavior unit as long as possible in order to obtain more Medicaid funding.

Lawsuits alleging false imprisonment

Dr. Hyatt became the medical director of the behavior unit at Northwest Medical Center in Springdale from Jan. 2018 until May 2022 when his contract was “abruptly terminated by the hospital,” the investigation states.

During that time, a lawsuit was filed against Dr. Hyatt and the hospital, claiming that a woman who had accidentally overdosed on Tylenol and was subsequently kept in the unit against her will.

The woman suing Dr. Hyatt said she’d expressed to employees that she wanted to leave but was told that if she tried to leave they would take her to court to get her to stay longer because “the judge always sided with Dr. Hyatt.”

The lawsuit alleges that a judge had issued a court order to require Northwest Medical to release the woman. 

Dr. Hyatt reportedly had gone to the woman’s room that day and said “he and Northwest would see her lawyer in court and that when she lost in court she would never be able to get a job,” the lawsuit alleges.

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[MM Curator Summary]: Michael McCormac stole about $5.5M of your tax dollars by paying kickbacks to “marketing companies” that drove prescriptions to his pharmacies.

 
 

Clipped from: https://www.kttn.com/former-missouri-pharmacy-owner-pleads-guilty-to-paying-kickbacks-for-prescriptions/

 
 

The former owner of a Creve Coeur pharmacy on Monday admitted paying illegal kickbacks to marketing companies to generate prescriptions for expensive medications.

Michael J. McCormac, 55, pleaded guilty in front of U.S. District Judge Rodney W. Sippel to two counts of violations of the Anti-Kickback Statute. 

At the time of the crimes, McCormac owned GoLiveWell Pharmacy, which operated primarily as a mail-order pharmacy supplying customers across the country. McCormac admitted striking deals with marketing companies in which GoLiveWell would illegally kick back a percentage of the pharmacy’s net profit on prescriptions obtained through the marketing companies’ efforts.

In exchange, the pharmacy received prescriptions obtained by the marketing companies in various ways, including by running ads in hopes that patients would “opt in” to receiving prescriptions for expensive drugs. The companies also engaged in the so-called “doctor chase,” in which they fax prescriptions to doctors’ offices in hopes that the doctors sign them.

Those prescriptions included topical creams, oral medications and antibiotic and antifungal “foot bath” drugs. Claims for payment for the drugs were submitted to federal health plans including Medicare and the Missouri Medicaid and Ohio Medicaid programs.

GoLiveWell paid one company 60 percent of the pharmacy’s net profit and another 45 percent. One month, GoLiveWell paid one marketing company $260,836.

In total, the government alleges that Medicare paid GoLiveWell $4.7 million to which it was not entitled, with another $490,000 coming from Missouri Medicaid and $330,000 from Ohio Medicaid.

McCormac is scheduled to be sentenced August 16. Each charge carries a potential penalty of up to 10 years in prison and a $100,000 fine. He will also be ordered to pay restitution.

The case was investigated by the Office of Inspector General for the United States Department of Health and Human Services, the Medicaid Fraud Control Units of Missouri and Ohio, and the Federal Bureau of Investigation.  Assistant U.S. Attorneys Meredith Reiter and Derek Wiseman are prosecuting the case.

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[MM Curator Summary]: Kyle Perkins stole $16,213.58 of your tax dollars using a mileage reimbursement scam to NH Medicaid.

 
 

Clipped from: https://www.doj.nh.gov/news/2023/20230427-kyle-perkins-medicaid-fraud.htm

Concord, NH – Attorney General John M. Formella announces that Kyle Perkins, age 30, of Concord has been indicted on additional charges of theft and Medicaid fraud in connection with fraudulent claims for non-emergency medical transportation services.

On April 11, 2023, the Merrimack County Grand Jury indicted Perkins on charges of Theft by Deception, Medicaid Fraud – False Claims, and Medicaid Fraud – False Records.

The indictments allege that between July 29, 2020 and March 9, 2023, Perkins, pursuant to one scheme or course of conduct, created false documentation to support claims for mileage reimbursement from an address he was not living at, resulting in false claims being filed with Medicaid and Perkins obtaining more than $1,500.00 in Medicaid funds.

Perkins was previously indicted on charges of theft and Medicaid fraud alleging that he submitted documentation to request mileage reimbursement for trips to medical visits that did not actually exist. The Medicaid Fraud Control Unit presented these new charges alleging that Perkins also submitted requests for mileage reimbursement using a false address to increase the reimbursement amount. In total, Perkins is alleged to have received $16,213.58 as a result of these fraudulent claims for mileage reimbursement.

The maximum penalty on the Theft by Deception charge, a class A felony, is 7½ to 15 years in the New Hampshire State Prison. The maximum penalty for the False Claims and False Records charges, both class B felonies, are each 3½ to 7 years in the New Hampshire State Prison.

Perkins will be arraigned in the Merrimack County Superior Court on May 15, 2023. The charges and allegations are merely accusations, and Perkins is presumed innocent unless and until proven guilty.

 
 

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[MM Curator Summary]: Dacheng Lu and Taesung Kim stole $29M of your tax dollars by paying kickbacks to doctors (who took them) and to members (who took them) to help them submit a ton of bogus claims for their 4 pharmacies.

 
 

Clipped from: https://www.justice.gov/opa/pr/two-pharmacy-owners-charged-29m-health-care-fraud-scheme

An indictment was unsealed today in Brooklyn charging two New York men for their alleged participation in a scheme to submit false and fraudulent claims to Medicare and Medicaid for medically unnecessary prescriptions and over-the-counter products that were not actually dispensed, to pay illegal kickbacks and bribes, and to launder the proceeds of their scheme. 

According to court documents, Taesung “Terry” Kim, 58, of Purchase, and Dacheng “Bruce” Lu, 44, of Great Neck, partly owned and operated four pharmacies:  888 Pharmacy Inc. and Huikang Pharmacy Inc., located in Brooklyn, and Elmcare Pharmacy Inc. and NY Elm Pharmacy Inc., located in Flushing. Between January 2015 and December 2022, Kim and Lu allegedly conspired with others to submit false and fraudulent claims to Medicare and Medicaid for dispensing pharmaceutical and over-the-counter products that were medically unnecessary, procured by the payment of kickbacks and bribes, or not provided. Further, Kim and Lu allegedly conspired with others who paid illegal kickbacks and bribes, in the form of cash and supermarket gift certificates, to Medicare beneficiaries and Medicaid recipients who filled their prescriptions at their pharmacies. Kim and Lu also conspired with others to pay and paid illegal kickbacks and bribes, in the form of rent and office staff, to the doctors who prescribed the medically unnecessary medications filled at their pharmacies.

Kim and Lu also are alleged to have laundered the proceeds of their fraud through shell entities to generate cash that they could disperse as unrecorded profits to themselves and the pharmacies’ other owners and to pay kickbacks to pharmacy customers. As part of the scheme, Kim and Lu’s pharmacies submitted approximately $29 million in fraudulent claims to Medicare and Medicaid.

Kim and Lu are charged with conspiracy to commit health care fraud, conspiracy to commit money laundering, and conspiracy to pay illegal health care kickbacks and bribes. If convicted, they each face a maximum penalty of 10 years in prison for conspiracy to commit health care fraud, 20 years in prison for conspiracy to commit money laundering, and five years in prison for conspiracy to pay illegal health care kickbacks and bribes.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office, and Special Agent in Charge Naomi Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

The FBI and HHS-OIG are investigating the case.

Trial Attorney Patrick J. Campbell and Acting Assistant Chief Miriam Glaser Dauermann of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, comprised of 15 strike forces operating in 25 federal districts, has charged more than 5,000 defendants who collectively have billed federal health care programs and private insurers more than $24 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

 
 

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[MM Curator Summary]: This one adds up to $49M of your tax dollars lost. As we march forward into Medicaid paying rent, this is the prototype of many of the fraud stories we will see. Paul Fishbein got rent payments from the NY Housing agencies for properties he didn’t own- but moved people with rental-assistance benefits into.

 
 

Clipped from: https://www.justice.gov/usao-sdny/pr/real-estate-investor-convicted-defrauding-government-rental-assistance-and-medicaid

Damian Williams, the United States Attorney for the Southern District of New York, announced today’s conviction in federal court of PAUL FISHBEIN of multiple counts of fraud and aggravated identity theft.  FISHBEIN stole hundreds of thousands of dollars from rental assistance programs administered by New York City’s Human Resources Administration (“HRA”) and New York City’s Housing Preservation & Development (“HPD,” and with HRA, the “Agencies”) by renting out properties throughout the City that he falsely claimed to own and by collecting made-up broker fees.  FISHBEIN was also convicted of Medicaid fraud.  The jury convicted FISHBEIN today following a nearly two-week trial before U.S. District Judge Paul A. Crotty.

U.S. Attorney Damian Williams said:  “New York City assists millions of low-income and vulnerable New Yorkers through different types of programs, including rental assistance programs and Medicaid.  These programs were designed to help New Yorkers in need.  But, as a jury has now found, for years, Fishbein abused those programs to enrich himself.  To do that, he told lie after lie after lie.  He stole money, including federal funds, from the City’s rental assistance programs by lying about being the landlord of homes he didn’t actually own.  He stole the identity of a real estate broker to get the City to pay him made-up broker fees.  And he stole Medicaid benefits by lying to the City about how much money he made.  Today, a unanimous jury has held Fishbein accountable for his yearslong fraudulent schemes.”

According to the Indictment, documents previously filed in the case, and the evidence introduced at trial:

From in or about 2013 through May 4, 2021, FISHBEIN rented out properties in New York City to low-income New Yorkers through the Agencies’ rental assistance programs, collecting rent payments from the Agencies as the purported owner of the properties.  In fact, FISHBEIN was never the owner of those properties and lied to the Agencies to collect the rent payments.  In addition, FISHBEIN lied to HRA that he used the services of a real estate broker to rent out certain properties in order to collect broker fee payments from HRA, also through its rental assistance program.  FISHBEIN used an actual real estate broker’s license and name without her authority to collect these made-up broker fees from the City.  In-need New Yorkers were placed in these properties, which FISHBEIN, because he was not actually the owner of the properties, failed to maintain.  In one instance, the ceiling completely collapsed while a tenant and her family were living in a property FISHBEIN claimed to own.  Through these two schemes, FISHBEIN fraudulently obtained hundreds of thousands of dollars from HRA and HPD, including more than $90,000 in federal funds. 

FISHBEIN was also convicted of healthcare fraud because, from 2014 through May 4, 2021, he lied to New York City’s Medicaid program about how much money he made in order to collect Medicaid benefits.  Medicaid is meant for low-income New Yorkers.  FISHBEIN, each year, told the City that he made only $150 a week, or $7,200 a year, when in reality, he was raking in hundreds of thousands of dollars each year from his rental assistance and broker fee schemes described above.  By lying about his income and assets, the defendant received at least approximately $49,524.80 in Medicaid benefits to which he was not entitled.

*                *                *

FISHBEIN, 49, of Queens, New York, was convicted of one count of wire fraud, one count of mail fraud, one count of theft of government funds, one count of aggravated identity theft, and one count of healthcare fraud.  The wire fraud and mail fraud charges each carry a maximum sentence of 20 years in prison; the theft of government funds and healthcare fraud charges each carry a maximum sentence of 10 years in prison; and the aggravated identity theft charge carries a mandatory two-year sentence, which must run consecutive to any other prison term imposed.   

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.  FISHBEIN is scheduled to be sentenced by Judge Crotty on July 31, 2023.

Mr. Williams praised the outstanding investigative work of the New York City Department of Investigation.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Sarah L. Kushner, Christy Slavik, and Jared Lenow are in charge of the prosecution and were assisted at trial by Paralegal Specialist Joseph Magliocco.

 
 

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[MM Curator Summary]: Julio Alvarado stole $20M of your tax dollars using a Medicaid transportation scheme. The bennies involved were glad to take his kickbacks in exchange for the info needed to bill for bogus trips.

 
 

Clipped from: https://www.jdsupra.com/legalnews/fraud-week-ny-transportation-company-5193658/

 
 

Transportation fraud isn’t new, but it’s new to Rivkin Rounds. The U.S. Attorney’s Office for the Southern District of New York recently announced that Yonkers resident Julio Alvarado was sentenced to 95 months in prison for leading a scheme that billed Medicaid for fraudulent transportation claims. From 2017 to 2020, KJ Transportation C Services Inc. collected more than $20 million for providing transportation services for Medicaid enrollees in the New York City area, many of which claims were fraudulent.

Some of the purported passengers were deceased or out of the country when KJ claimed it was transporting them to medical appointments. KJ also used stolen identities to bill for transporting people who had never heard of the company, and some Medicaid recipients were paid kickbacks for providing KJ their Medicaid information or allowing KJ to schedule and bill for fake trips for them.

Alvarado supervised more than a dozen other participants in the scheme and was responsible for billing more than $8 million of the fraudulent claims. In addition to the prison term, he was sentenced to three years of supervised release and ordered to pay $8,507,115 in restitution and to forfeit $8,507,115.

In addition, Ismat Farhan of Schenectady and his company, USA Medical Transport, recently agreed to pay $862,500 to settle false claims allegations. According to Attorney General Letitia James’ Office’s press release, Farhan submitted over 2,500 false claims and billed Medicaid for about $400,000 for transportation services that were not provided as described or at all, or did not have required documentation.