DoJ Charges Providers in Medicare Fraud Cases, Settles Others

September 16, 2016 - Medicare fraud cases have the potential to drain the federal healthcare program of millions of dollars while also putting beneficiaries at risk of receiving unnecessary or low-quality care. In response, the federal government has ramped up its efforts to prevent and catch healthcare fraud, especially through legal channels.

A study from the Transactional Records Access Clearinghouse in May projected that 2016 would see the lowest number of federal prosecutions for healthcare fraud since 1998, but the federal government has recently renewed its efforts to crack down on false medical billing and improper payments.

In June, the Department of Justice (DoJ) partnered with the Department of Health and Human Services to announce the largest healthcare fraud takedown in the department’s history. More than 300 individuals, including 61 physicians and licensed medical professionals, were charged with participating in healthcare fraud schemes that amounted to $900 million in false medical billing.

Continuing with its commitment to stamping out fraudulent providers, DoJ recently reported several lawsuits and settlements associated with Medicaid and Medicare fraud schemes.

False Claims Act complaint filed against six nursing facilities in Tennessee

On September 7, DoJ announced that the US filed a False Claims Act case against Vanguard Healthcare LLC and several of its associated entities as well as the healthcare system’s Director of Operations, Mark Miller. The lawsuit alleged that providers at the Tennessee-based healthcare system submitted false claims to Medicaid and Medicare for skilled nursing home services that were either never performed or “grossly substandard.”

Between January 1, 2010 and December 31, 2015, the six Vanguard facilities named in the complaint reportedly neglected to provide “the most basic and essential skilled nursing services to their residents.” According to the lawsuit, the healthcare facilities were accused of staffing and critical medical supplies shortages, a lack of standard infection control, failure to provide medication to residents as prescribed by their physicians, use of unnecessary physical restraints on patients, failure to appropriately manage pain, and use of unnecessary and excessive psychotropic medications.

As a result, many Vanguard residents experienced adverse and possibly preventable events, such as pressure ulcers, falls, dehydration, and malnutrition.

The lawsuit against Miller, who worked as the Director of Operations from September 2011 until August 2014, also alleged that he was aware of the substandard care and neglected to rectify the issues.

Additionally, DoJ stated that providers at four of the Vanguard locations reportedly forged physician and nurse signatures on required nursing facility Pre-Admission forms and submitted them to Tennessee Medicaid between September 2012 and August 2014.

“Our seniors rely on the Medicare and Medicaid programs to help care for them with dignity and respect,” stated Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice's Civil Division.  “It is critically important that we confront nursing home operators who put their own economic gain over the needs of their residents. Operators who bill Medicare and Medicaid while failing to provide essential services will be held accountable.”

Two psychologists plead guilty in $25 million Medicare fraud scheme

Earlier this month, two defendants in a case from October 2015 pleaded guilty to one count of conspiracy to commit healthcare fraud after performing medically unnecessary psychological tests on nursing home residents throughout Mississippi, Louisiana, Florida, and Alabama, according to the DoJ’s website. The psychologists admitted to repeatedly performing tests on the same nursing home residents even though they were incapacitated or could not “meaningfully participate in testing.”

Beverly Stubblefield, PhD, of Louisiana and John Teal, PhD, of Mississippi also said that they billed Medicare for administering services that were never performed on residents at Nursing Home Psychological Services, Inc. and Psychological Care Services, Inc., where Stubblefield and Teal worked as clinical psychologists.

DoJ reported that the two psychologists were responsible for over $5.6 million in fraudulent Medicare claims between 2010 and 2015.

The defendants are also connected with another Medicare fraud case involving Rodney Hesson, PsyD, and Gertrude Parker of Louisiana. Hesson and Parker owned the healthcare facilities where Stubblefield and Teal worked. They are also accused of committing healthcare fraud after submitting false Medicare claims totaling $25.2 million. Both Hesson and Parker were charged in June 2015, but they are not scheduled to begin trial until October 11, 2016.

Provider charged for role in $13.8 million healthcare fraud case in Florida

A Florida-area provider was charged with one count of conspiracy to commit healthcare fraud, one count of healthcare fraud, and one count of conspiracy to make false statements associated with healthcare matters, reported the DoJ.

Miguel Burgos, MD, reportedly defrauded Medicare by “causing the submission and concealment of false and fraudulent claims.” while working as the medical director of several Orlando-based clinics, including Legend Medical & Rehabilitation Inc., Incase Medical & Rehab Center Inc., Assisting Health Center Inc., and CKD Health Care Inc.

The indictment alleges that Burgos signed fraudulent medical records that authorized medically unnecessary treatments to be performed on Medicare beneficiaries. He also reportedly did not examine the beneficiaries or the medical documents, which were then used to support false medical bills for expensive prescription drugs and physical therapy services that were either never provided or unnecessary.

Yosbel Marimon of Florida was also charged alongside Burgos. Marimon was originally charged in a Medicare fraud case in June, but he now faces a new count of healthcare fraud in connection with false claims for physical therapy.

Burgos and his conspirators are charged with billing Medicare for a total of $13.8 million in false and fraudulent claims between July 2008 and December 2011.

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