In The News

Financial Freedom Agrees to Pay Government $89 Million to Settle Allegations that it improperly serviced Federally Insured Reverse Mortgage Loans

Often the government crackdown on fraud and abuse affects some of society’s most vulnerable citizens – the elderly. The fact was demonstrated last month, when the Justice Department announced that Financial Freedom had agreed to a settlement with the United States for more than $89 million. The government alleged that the company – which is headquartered in Austin, Texas – violated the False Claims Act and the Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA) in connection with its participation in a ‘reverse mortgage’ program. “This settlement represents our office’s continued commitment to protecting the financial solvency of vital financial programs designed to benefit America’s seniors,” said Acting U.S. Attorney Stephen Muldrow of the Middle District of Florida. “HECM servicers must be held accountable for failing to adhere to FHA requirements that are designed to ensure the continued viability of the HECM program. We are pleased that Financial Freedom agreed to accept financial responsibility for these failures.”

 

Reverse mortgage loans are a financial instrument through which older people are able to access equity in their homes by borrowing against the equity they have built. The government protects – via the FHA – lenders from loss by providing mortgage insurance. Further, the FHA reimburses lenders who are unable to recoup the full amount of the loan. However, the loan servicer must first meet a number of regulatory requirements and deadlines before he/she is reimbursed. The United States alleges that from March 31, 2011 to August 31, 2016, Financial Freedom obtained additional interest on insurance payments that they were not entitled to receive. Financial Freedom allegedly did so by failing to meet appraisal deadlines, falling to submit claims to HUD and by neglecting to pursue foreclosure proceedings.

The investigation into Financial Freedom’s alleged practices arose from a declaration filed pursuant to FIRREA by Sandra Jolley. Jolley is a consultant for the estates of borrowers who took out the HECM loans. Under the FIRREA, whistleblowers may file declarations alleging violations of the statute and share in any subsequent recovery. Ms. Jolley will receive $1.6 million from the settlement.

“Today’s settlement agreement resolves allegations that this lender failed to comply with FHA servicing requirements and sought to receive financial gains that it was not legally entitled to,” said HUD Inspector General David A. Montoya. “These actions today demonstrate our continued commitment to address and halt business practices that pose a serious risk to the FHA program and the public’s trust in HUD administered programs.” If you know of abuse that has been committed against the government or one of its agencies, you are encouraged to report it and to contact a whistleblower law firm. The settlement was the result of the coordinated efforts of several state and federal agencies who have been participating in the government’s involvement in whistleblower Medicare cases.


Three Medicare Companies Agree to Pay the Government $19.5 Million to Resolve False Claims Act Allegations

The government’s crackdown on Medicare fraud continues to net companies that allegedly choose profit over patient wellbeing. This was evidently the case when earlier this month, the Justice Department announced that Foundations Health Solutions Inc. (FHS), Olympia Therapy, Inc. (Olympia), and Tridia Hospice Care Inc. (Tridia) and two of their executives have agreed to pay approximately $19.5 million to resolve allegations that they submitted false claims for medically unnecessary rehab therapy and hospice services. “Clinical decisions should be based on patient needs rather than corporate profits,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This settlement reflects the Department’s continuing commitment to safeguarding patients and the Medicare system.” All three companies are based in Ohio.

FHS provides management services to skilled nursing facilities (SNFs), Olympia provided rehab therapy services to patients at SNFs and Tridia provides hospice care services. Brian Colleran and Daniel Parker – two executives who have agreed to pay a portion of the settlement – controlled or owned Provider Services Inc. (PSI), BCFL Holdings Inc. (BCFL), FHS, Olympia, and Tridia between 2008 and 2013. The settlement resolves allegations that from January 2008 through December 2012, Olympia and PSI/BCFL submitted false claims for unnecessary rehab services at 18 SNFs. The government further alleges that the claims caused therapy services to be provided at excessive levels in order to increase Medicare reimbursement.

Further, the government contends that from April 2011 through December 2013 Tridia submitted false claims to Medicare for hospice services that were provided to patients who had not received proper medical examinations or certifications. Finally, the settlement resolves allegations that from January 2008 through December 2012, Colleran and Parker solicited and received kickbacks from SNFs managed by PSI or BCFL to Amber Home Care LLC. “Medicare providers have a legal and moral obligation to provide only those services that are medically necessary and to ensure that claims seeking payment accurately reflect the services that are actually provided,” said Special Agent in Charge Lamont Pugh III of the U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG). “The misrepresentation or falsification of those claims not only violates provisions of the False Claims Act but the public’s trust. The OIG will continue to aggressively investigate allegations of potential violations of this nature.”

As part of the settlement agreement reached earlier this month, FHS and Colleran have entered into a five-year Corporate Integrity Agreement (CIA), with the HHS Office of the Inspector General (HHS-OIG). The CIA is designed to compel FHS and Colleran to take steps to avoid future fraud and abuse. The settlement resolves allegations that came about as a result of two lawsuits that were filed by Vladimir Trakhter, a former Olympia employee, and Paula Bourne and La’ Tasha Goodwin, former Tridia employees. The lawsuits were filed in Ohio federal court under the qui tam or whistleblower provisions of the False Claims Act. These provisions allow private citizens to sue on behalf of the federal government and to share in any recovery.  Mr. Trakhter will receive approximately $2.9 million and Ms. Bourne and Ms. Goodwin collectively will receive $740,000.

If you have chosen to report a False Claims Act violation, we advise you to contact a qui tam law firm. Qui tam law firms will be able to put you in contact with an attorney who can advise you in such matters. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).


Several Cardiac Monitoring Companies Have Agreed to Pay $13.45 Million to Resolve False Claims Act Allegations

The Department of Justice announced last month that AMI Monitoring Inc., its owner Joseph Bogdan, Medi-Lynx Cardiac Monitoring LLC., and Medicalgorithmics SA, have all agreed to resolve allegations that they violated the False Claims Act. AMI Monitoring Inc., also known as Spectocor, and Bogdan have agreed to pay $10.56 million, and Medi-Lynx and Medicalgorithmics have agreed to pay $2.89 million. “Independent diagnostic testing facilities that improperly steer physicians to order higher levels of service will be held accountable,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will vigilantly ensure the appropriate use of our country’s limited Medicare funds.”

 

The government says that the companies intentionally guided patients towards more expensive levels of cardiac monitoring services than were medically necessary. Specifically, from 2011 to 2016 Spectocor, marketed a pocket ECG machine capable of several kinds of cardiac monitoring – holter, event, and telemetry. However, during the enrollment process for the cardiographic services, physicians were only able to choose the service that allowed for the highest rate of reimbursement from Medicare. Medicalgorithmics SA acquired a controlling interest in Medi-Lynx in September 2016.

 

“Sophisticated medical technology can be used to help doctors dramatically improve the lives of their patients, but it can also be misused to fraudulently increase medical bills,” said Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey. “Today’s settlement demonstrates that the federal government is committed to preserving the integrity of the Medicare system and ensuring that Medicare funds are spent only for patient care.” Eben Steele, a former sales manager at Spectocor, filed the original lawsuit in a federal court in Newark, New Jersey that resulted in last month’s multi-million dollar settlement. Mr. Steele was able to file his suit under the qui tam or whistleblower provisions of the False Claims Act. This Act allows private citizens to sue on behalf of the federal government in cases involving false claims and to share in any subsequent recovery. Mr. Steele’s share of the settlements amounts to $2.4 million.

 

The government’s intervention in this matter is a part of its ongoing efforts to investigate healthcare fraud. This initiative began during the previous administration.  If you have chosen to report a False Claims Act violation, we advise you to contact a qui tam law firm. Qui tam law firms will be able to provide you with attorneys who can advise you on such matters. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
 


Los Angeles Hospital Agrees to Pay $42 Million to Settle Alleged False Claims Act Violations

Healthcare providers entering into improper relationships with physicians is a common theme in the government’s ongoing crackdown on Medicare and Medicaid fraud and abuse. This was demonstrated again last week when the Justice Department announced that two healthcare providers – PAMC Ltd., and Pacific Alliance Medical Center, Inc. – had agreed to pay $42 million in order to settle allegations that they violated the False Claims Act by engaging in improper financial relationships with referring physicians. The two entities own and operate Pacific Alliance Medical Center. Of the agreed upon settlement amount, $31.9 million will be paid to the government while the remaining $10 million will be paid to the State of California.

 

The settlement resolves allegations that were brought forward by a whistleblower who alleged that the defendants had submitted false claims to Medicare and MediCal Programs for services rendered to patients with whom they had improper relationships. Specifically, the whistleblower lawsuits alleged that the defendants paid above-market rates to rent office space within the physicians’ practices. Moreover, the lawsuit alleged that these marketing arrangements unduly benefited the physicians and their practices. These actions are alleged to have violated not only the False Claims Act but the Anti-Kickback Statute (42 U.S.C. § 1320a-7b.) and the Stark Law (42 U.S. Code § 1395nn). Both laws restrict the knowing and willful payment of “remunerations” to induce or reward patient referrals.

 

“Federal law prohibits improper financial relationships between hospitals that receive federal health care funds and medical professionals – this is to protect the doctor-patient relationship and to ensure the quality of care provided,” said Acting U.S. Attorney Sandra R. Brown for the Central District of California. “Patients deserve to know their doctors are making health care decisions based solely on medical need and not for any potential financial benefit.”

“This settlement is a warning to health care companies that think they can boost their profits by entering into improper financial arrangements with referring physicians,” said Special Agent in Charge Christian J. Schrank of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, we will continue to crack down on such deals, which work to undermine impartial medical judgement, drive up health care costs, and corrode the public’s trust in the health care system.”  The whistleblower in this case was Paul Chan who worked for one of the defendants as a manager. Mr. Chan filed his case under the qui tam provisions of the False Claims Act. Under these provisions, individuals are able to sue on behalf of the United States and share in any subsequent recovery. Mr. Chan is expected to receive approximately $9.2 million.

If you have chosen to report a False Claims Act violation, we advise you to contact a False Claims Act lawyer. A False Claims Act attorney will be able to advise you on such matters. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).


Genesis Healthcare Inc. Agrees to Pay $53.6 Million Settlement to Resolve False Claims Act Violations

The government seems even more determined than ever to crack down on illegal billing and to make those who have done so pay for their alleged misdeeds. Proof of this came last week when the Department of Justice announced that Genesis Healthcare Inc. has agreed to pay more than $53 million – including interest – to settle lawsuits alleging that it and several other companies violated the False Claims Act. The government alleges that Genesis violated the False Claims Act by submitting false claims for medically unnecessary therapy and hospice services and by providing grossly substandard nursing care. Genesis – which is located in Kennett Square, Pennsylvania – owns and operates skilled nursing facilities, assisted/senior living facilities and a rehabilitation therapy business. “We will continue to hold health care providers accountable if they bill for unnecessary or substandard services or treatment,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Today’s settlement demonstrates our unwavering commitment to protect federal health care programs against unscrupulous providers.”

 

The settlement resolves four sets of allegations in all.

  • In the first allegation, the government maintains that from April 2010 through March 2013, Skilled Health Group Inc. (SKG), Skilled Healthcare LLC (Skilled LLC), and Creekside Hospice II LLC, knowingly submitted false claims to Medicare for services they provided at Creekside Hospice. Specifically, the facilities are alleged to have billed hospice services for patients who were not terminally ill and that they billed inappropriately for physician evaluation services.
  • Secondly, the settlement resolves allegations that from January 1, 2005 through December 31, 2013, SKG, Skilled LLC and Hallmark Rehab GP LLC submitted false claims to Medicare, TRICARE and Medicaid for medically unnecessary services that they billed for more therapy minutes than their patients received. The facilities are also alleged to have fraudulently assigned patients a higher Resource Utilization Group (RUG) level than necessary. RUGs are mutually exclusive categories that reflect levels of resource need in long-term care settings. Medicare reimburses SNF’s based on these metrics.
  • In the third allegation, the government maintains that from January 1, 2008 to September 27, 2013, Sun Healthcare Group, Inc., SunDance Rehabilitation Agency and SunDance Rehabilitation submitted false claims to Medicare Part B by billing for medically unnecessary services and for services that were carried out by unskilled persons.
  • In the final allegation, the Justice Department maintains that between September 1, 2003 and January 3, 2010 Skilled LLC submitted false claims to Medicare and Medi-Cal at its nursing homes for services that were substandard. Specifically, the settlement resolves allegations that these facilities failed to provide sufficient nurse staffing to meet the needs of residents. This in turn violates the government’s standard requirements for these nursing homes, SNF, etc.

“Safeguarding federal health care programs and patients is a priority,” said Acting U.S. Attorney Steven W. Myhre for the District of Nevada. “Today’s settlement is an example of the U.S. Attorney’s Office’s commitment to holding medical providers accountable for fraudulent billing of medically unnecessary treatments and services. We are committed to protecting federal health care programs, including Medicare, TRICARE, and Medicaid, which are funded by taxpayer dollars.” The settlement resolves allegations that were brought about by lawsuits filed under the qui tam, or whistleblower, provisions the False Claims Act by several former employees of companies acquired by Genesis. The qui tam provisions of the False Claims Act permit individuals to sue on behalf of the federal government in cases alleging false claims and to recover a portion of any subsequent settlement. The whistleblowers in this case are scheduled to receive a combined $9.67 million.


Defense Contractor Pays $95 Million to Resolve Allegations of Criminal, Civil Activities Related to Food Service Contracts

Foreign companies that do business with the United Sates are not beyond the reach of its laws when it comes to waste and fraud. The Department of Justice proved this to be the case when last month they announced that Agility Public Warehousing Co. KSC (Agility) – a Kuwaiti company – had agreed to resolve criminal, civil and administrative cases against it regarding their food contracts with the Department of Defense. The company’s contract covered food service for U.S. Troops from 2003 through 2010. As a part of a global resolution, Agility has agreed to pay $95 million to resolve civil fraud claims, to forgo $249 million in claims to DOD and to plead guilty to theft of government funds. For its part, the DOD’s Defense Logistics Agency (DLA) will release a claim of $27.9 million against Agility and lift its suspension of the company. (Agility had been suspended from entering into federal contracts for a period of seven years.)

“This settlement marks the conclusion of a lengthy investigation that demonstrates the Defense Criminal Investigative Service’s (DCIS) commitment to ensuring that tax dollars spent to support Department of Defense programs and missions are protected from fraud and abuse throughout the procurement process, but especially during overseas combat operations which are the most vulnerable,” said Special Agent in Charge John F. Khin of, DCIS-Southeast Field Office. “This extremely complex investigation required DCIS agents and our partners to tenaciously sort through and piece together an unprecedented volume of information and documents, and persevere through many years of exhaustive work, to bring this case to a resolution.”

The civil complaint alleges that Agility and TSC knowingly overcharged the DOD for locally available fruits and vegetables despite agreeing that they would pay 10 percent less than the amount billed. The United States also alleged that Agility failed to disclose rebate and discounts it obtained from US suppliers as it was contractually obligated to do so. The criminal charges against Agility alleged that it concealed consolidation fees that it should have paid and that this caused an inflated price to be paid by the United States. Starting in 2006, Agility filed a number of claims seeking additional payments in the amount of $249 million alleging that DLA owed this money for its performance under a series of military contracts. The agreement reached last month requires Agility to release all claims to this $249 million.

another Kuwaiti The allegations that are the basis of this agreement arose from a civil lawsuit that was filed against Agility and company – The Sultan Center Food Products Company, K.S.C. (TS) – by Kamal Mustafa Al-Sultan, a former vendor of Agility. Al-Sultan filed his suit under the whistleblower provisions of the False Claims Act. These provisions permit individuals to sue on behalf of the government and to share in any recovery. Mr. Al-Sultan is scheduled to receive $38.85 million as a result of the civil action he filed. If you have chosen to report a False Claims Act violation we advise you to contact a qui tam law firm. Qui tam law firms will be able to put you into contact with an attorney who will be able to advise you on such matters. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).


The Government Intervenes in False Claims Act Lawsuit against the City of Los Angeles and CRA/LA

Whistleblowing often contributes to the process of uncovering waste, fraud, and abuse by aiding some of society’s most disadvantaged members. Proof of this was demonstrated last week when the Justice Department announced that it was intervening in a lawsuit against the City of Los Angeles and the CRA/LA (formerly the Community Redevelopment Agency of the City of Los Angeles). The suit alleges that CRA/La and the City of Los Angeles falsely certified that they were in compliance with HUD’s accessibility laws specifically Section 504 of the Rehabilitation Act. This act is meant to ensure that disabled individuals have equal access to public housing.

According to the lawsuit CRA/LA and the City of Los Angeles applied for and received millions of dollars from HUD and that a portion of that money was meant to provide affordable housing for people with disabilities in compliance with HUD’s accessibility laws. The laws, in part, require that five percent of all units in federally-assisted multifamily housing be accessible to people with mobility impairments. They also require that the city and CRA/LA to maintain a list of accessibility features for those with any number of impairments including auditory and visual impairments. Finally, the law requires that a monitoring program be put in place to ensure that the disabled are not denied the benefits of federally-assisted housing programs.

As a precondition to receiving HUD funds, the City was required to comply with Section 504 of the Fair Housing Act. The lawsuit alleges that none of the HUD-assisted multifamily housing supported by CRA/LA met the minimum number of accessible units. The lawsuit also alleges the City and CRA/LA failed to monitor sub-recipients of HUD funds for compliance with accessibility laws. Finally the government alleges that the City and CRA/LA failed to maintain a publicly available list of accessible units and their features.

“This case alleges that the City of Los Angeles repeatedly violated the law by falsely certifying that millions of federal dollars were being used to build housing that included units accessible to people with disabilities,” said Acting U.S. Attorney Sandra R. Brown for the Central District of California. “While people with disabilities struggled to find accessible housing, the city and its agents denied them equal access to housing while falsely certifying the availability of such housing to keep the dollars flowing. The conduct alleged in this case is very troubling because of the impact on people who did not have access to housing that met their needs.”

The lawsuit was filed in the U.S. District court in Los Angeles by Mei Ling, a resident of Los Angeles who is confined to a wheel chair, and the Fair Housing Council of San Fernando Valley. Mei Ling filed the lawsuit under the qui tam or whistleblower provisions of the False Claims Act. The Act permits individuals to sue on behalf of the federal government in cases where False Claims Act violations are thought to have occurred. The Act also allows whistleblowers to share in any recovery. If you have chosen to report a False Claims Act violation we advise you to contact a qui tam law firm. A qui tam attorney will be able to advise you on such matters and protect your rights. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).


Former Chief Operating Officer of Freedom Health to Pay $32.5 Million to Settle False Claims Act Allegations

As has been the case all too often, the government is again alleging that another health care provider has given more importance to monetary considerations than it has over medical necessity when it comes to patient care. Indeed, late last week, the Justice Department announced that former Chief Operating Officer (COO) of Freedom Health, Siddhartha Pagidipati, has agreed to pay $750,000 to resolve False Claims Act violations. Freedom Health – a Florida-based provider of managed care serves – has agreed to pay more than $31 million for its part in engaging in illegal schemes to maximize its payment from the government in connection with Medicare Advantage plans.

“When entering into agreements with managed care providers, the government requests information from those providers to ensure that patients are afforded the appropriate level of care,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Today’s result sends a clear message to the managed care industry that the United States will hold managed care plan providers responsible when they fail to provide truthful information.” The government alleged that Freedom Health submitted unsupported diagnosis codes to The Centers for Medicare & Medicaid Services (CMS) which resulted in inflated reimbursement rates related to two Medicare Advantage plans operating in Florida. Moreover, the government also alleged that Freedom Health misrepresented to CMS the scope of its network of providers in its application to the provider. These representations allegedly began to occur in 2008 and were later expanded in 2009 into new Florida counties and in other states.

“Medicare Advantage insurers must play by the rules and provide Medicare with accurate information about their provider networks and their patients’ health,” said Chief Counsel to the Inspector General Gregory Demske of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “OIG will investigate and hold managed care organizations accountable for fraud. Moving forward, the innovative CIA reduces the risks to patients and taxpayers by focusing on compliance issues unique to Medicare Advantage plans.” The original case that lead to these settlements was brought about by a lawsuit under the qui tam or whistleblower, provisions of the Federal False Claims Act and the Florida False Claims Act. The qui tam provisions of this Act permits private individuals to sue on behalf of the government in cases involving false claims and to share in any subsequent recovery. The whistleblower in this case is former Freedom Health employee Darren D. Sewell. His share of the settlement has not yet been determined.

Optimum HealthCare Inc., America’s 1st Choice Holdings of Florida LLC, Liberty Acquisition Group LLC, Health Management Services of USA LLC, Global TPA LLC, America’s 1st Choice Holdings of North Carolina LLC, America’s 1st Choice Holdings of South Carolina LLC, America’s 1st Choice Insurance Company of North Carolina Inc. and America’s 1st Choice Health Plans Inc., are all corporate entities of Freedom Health and as a result were a part of the settlement. If you have been accused of violating The False Claims Act it is advised that you contact a False Claims Act lawyer. A qui tam law firm will be able to advise you on such matters and protect your rights. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).


United States Joins in Second False Claims Act Lawsuit against United Health Group Inc

Often, alleged healthcare fraud involves the proliferation of false and inaccurate information about patient health records. These kinds of activities endanger patient health and illegally enrich health care providers who are involved in such fraud. This was what the Justice Department alleged when last week it announced that it had filed a complaint against UnitedHealth Group Inc. (UHG) for the second time in two weeks. The government is alleging that UHG knowingly obtained inflated risk adjustment payments based on untruthful information about the health status of beneficiaries enrolled in UHG’s Medicare Advantage Plans. In a related action involving false claims submitted to Medicare, the government filed a complaint earlier this month in United States ex rel. Swoben v. Secure Horizons. “The Department of Justice’s pursuit of this matter illustrates its firm commitment to ensure the integrity of the Medicare Program, including those parts of the program that rely on the services of Medicare Advantage Organizations,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.

UHG is the nation’s largest Medicare Advantage Organization. It receives a monthly “risk adjustment” payment from Medicare for each enrolled beneficiary. These adjustments are primarily based on the health status of the beneficiary which is reflected in the diagnosis the patient receives from physicians. The complaint filed last week alleges that UHG knowingly ignored information about the medical conditions of beneficiaries and this in turn increased the risk adjustment payments Medicare gave to UHG. Specifically, the lawsuit maintains that UHG conducted a program designed to identify diagnoses not reported by physicians that would increase its risk adjustment payments. However, UHG allegedly ignored information in this program that showed that thousands of diagnoses provided to Medicare were invalid and thus did not support payments UHG received. Thus, UHG avoided repaying Medicare monies they owed the program by ignoring this information.

Moreover, the complaint alleges that UHG ignored information about invalid diagnoses based on financial incentives. Health care providers received payments from UHG connected to the amount of payments that UHG received from Medicare. UHG allegedly knew that its financial arrangement with certain health care providers created an incentive for these providers to report invalid diagnoses. This fact was confirmed by UHG’s review of these providers’ medical records. UHG is then said to have ignored evidence identifying invalid diagnoses from these providers and thus avoided repaying Medicare monies that neither it nor these providers were entitled. “To ensure that the program remains viable for all beneficiaries, the Justice Department remains tireless in its pursuit of Medicare fraud perpetrated by healthcare providers and insurers,” said Acting U.S. Attorney Sandra R. Brown for the Central District of California. “The primary goal of publicly funded healthcare programs like Medicare is to provide high-quality medical services to those in need – not to line the pockets of participants willing to abuse the system.”

The lawsuit was filed by Benjamin Poehling, the former finance director for the UHG group. Poehling managed UHG’s Medicare Advantage Program and filed his lawsuit under the qui tam provisions of the False Claims Act. The qui tam provisions of the False Claims Act permit private parties to sue on behalf of the federal government and to then share in any subsequent recovery. The government intervened in this case as part of its ongoing effort to crack down on healthcare fraud. The False Claims Act is one tool that it uses to this end.

If you have chosen to disclose wrongdoing it is also advised that you contact a qui tam lawyer. A False claims act lawyer will be able to advise you on such matters and protect your rights. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).


Psychiatrist Convicted for his part in $158 Million Medicare Fraud Scheme

Sometimes convictions for violations of the False Claims Act can result in more than just corporate integrity agreements (CIA) and fines. They can sometimes result in prison terms for the accused. Case in point: Earlier this week, the Justice Department announced the conviction of a Houston-area psychiatrist for his role in a $158 million Medicare fraud scheme. The Justice Department worked with several agencies including the IRS and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU). Riaz Mazcuri, of Harris County Texas, was convicted of one count of conspiracy to commit health care fraud and five counts of health care fraud. Sentencing is to take place on Oct. 10, 2017 before a US District Judge in the Southern District of Texas. According to the government, from 2006 – 2012, Mazcuri and others defrauded Medicare by submitting false claims through Riverside General Hospital totaling $158 million. The claims submitted were for partial hospitalization program (PHP) services. (A PHP is a kind of intensive outpatient treatment for severe mental illness.)

The evidence presented at trial showed that Mazcuri participated in a scheme whereby Riverside paid bribes and kickbacks to group home owners and nursing home employees in exchange for sending Medicare patients to Riverside’s PHPs. Moreover, evidence showed that Mazcuri admitted and readmitted patients suffering from intense dementia and other mental illnesses into intensive psychiatric programs for years. Many of these patients did not qualify for the services that were purportedly provided at the PHPs. Mazcuri signed documents that allowed Riverside to bill Medicare $55 million of the $158 million that it billed Medicare for fraudulent psychiatric services.

To date, 15 others have been convicted for their participation in this scheme. Of those who have been convicted are Earnest Gibson III, the former president of Riverside and the operator of one of Riverside’s PHP satellite locations. The sentences of the convicted conspirators range from 5 to 45 years in prison. The case is being prosecuted by the Fraud Section of the U.S. Attorney’s Office for the Southern District of Texas. The investigation was conducted by several agencies including the FBI, HHS-OIG, IRS-CI RRB-OIG and the MFCU. Since its inception in March 2007, the Medicare Fraud Strike Force has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. If you have been accused of violating The False Claims Act it is advised that you contact a qui tam Medicare lawyer. Qui tam law firms will be able to advise you on such matters and protect your rights. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).