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2015: Year That Was in Healthcare Fraud and Malpractice

Here are the top 5 most financially staggering healthcare fraud stories of the year, presented in order of most to least expensive.

- Here is a general roundup of the past year’s developments in healthcare fraud and malpractice, as reported by the Department of Justice and the Office of Inspector General (OIG). The crimes reported below result in multiple millions of dollars in healthcare fraud and the possibility of extensive prison time.

Medicare fraud in healthcare

Many healthcare organizations were in hot legal water this year. Some secretly billed for services not rendered, slyly misrepresented service dates or locations, quietly executed kickback or bribery endeavors, billed pretend patients, or continuously waived deductibles or copayments, among a slew of many other fraud charges.

Medicare fraud schemes resulted in guilty charges and lengthy prison sentences, for starters.

Here are the top 5 most financially staggering healthcare fraud stories of the year, as reported by RevCycleIntelligence.com.

1. $712 million false billing sweep

The Department of Health and Human Services (HHS) announced a nationwide sweep across 17 districts last June. 

Over 240 individuals faced charges, including 46 physicians, nurses, and other licensed medical professionals for allegedly participating in over $700 million in Medicare fraud.

“This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” stated Attorney General Loretta E. Lynch. 

“[The defendants charged] billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered. In the days ahead, the Department of Justice will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives.”

2. $256 million medical lab fraud

Millennium Health was slated to pay $256 million to resolve allegations for physician kickback activity. Medically unnecessary medical lab testing was knowingly conducted, according to a DoJ report.

“The FBI hopes this settlement will send a strong message that fraudulent practices by medical labs will not be tolerated,” noted Harold H. Shaw, Special Agent in Charge at the Boston Division of the Federal Bureau of Investigation.

3. $158 million Medicare fraud scheme

Earnest Gibson III, the former President of Riverside General Hospital, Earnest Gibson IV, Operator of Devotions Care Solutions, a satellite psychiatric facility of Riverside General Hospital, and Regina Askew, Owner of Safe and Sound group home, were sentenced last June. 

Six other individuals pleaded guilty. Restitution amounts approach $100 million.

Said one Assistant Attorney General within a DoJ report, the Gibsons and Askew saw the elderly and the mentally ill as mere money-making machines.

“Rather than providing needed medical care to a historically underserved community, the defendants ran a longstanding hospital into the ground through their greed and fraud,” stated Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.

4. $115 million in a False Claims Act settlement

Last September, Adventist Health System was slated to pay $115 million to settle False Claims Act allegations for a case involving physician bonuses and unlawful financial agreements.

Physicians were allegedly paid bonuses according to how many test and procedures they ordered, thereby hurting the quality of medical care patients received, according to one Acting US Attorney’s statement.

“Unlawful financial arrangements between heath care providers and their referral sources raise concerns about physician independence and objectivity,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, Head of the Justice Department’s Civil Division.  

“Patients 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."

5. $100 million black market fraud scheme

Earlier this month, Randy Crowell, owner of a pharmaceutical company based in Utah, was indicted on charges for distributing over $100 million of black market prescription drugs to thousands of unknowing patients.

“Targeting the most vulnerable sources of supply, namely Medicaid patients and others with subsidized benefits, scheme participants encouraged sick people with serious illnesses to forego medical treatment in exchange for profit,” asserted Diego Rodriguez, FBI Assistant Director-in-Charge.

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