Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

April 10: Week That Was in Healthcare Fraud and Malpractice

By Jacqueline DiChiara

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

$1M Medicare "billing mill" leads to 30 month sentence

Gevorg “George” Kupelian, North Hollywood, California, was sentenced to thirty months in custody for involvement in billing Medicare beneficiaries for medically unnecessary or fabricated medical tests. Kupelian and others operated the El Centro Clinic in El Centro, California. Kupelian used the Medicare billing number of a doctor serving as a “front” to submit Medicare claims. Kupelian recruited and paid individuals to locate El Centro-based senior citizens and convince them to provide Medicare beneficiary care numbers to the El Centro Clinic in exchange for free shoes and/or free buffet lunches.

The El Centro Clinic administered a variety of pre-determined tests to beneficiaries. Such tests were not based on the specific medical needs of individual beneficiaries and were provided without physician supervision. Kupelian instructed employees that all patients were to undergo all tests, such as allergy tests, electrocardiograms (EKGs), and ultrasounds, without regard to needed tests or actual patient diagnoses. Additionally, beneficiaries were billed for tests that had not been administered.

Says Attorney Laura Duffy. “[Kupelian] exploited vulnerable seniors—even giving them unnecessary tests without a doctor’s approval — in order to get rich on the backs of taxpayers.”

Kupelian inserted fabricated test results into patient files for tests not rendered and subsequently submitted fraudulent bills to Medicare with the assistance of his co-conspirators.  The El Centro Clinic generated $2.7 million in Medicare claims. The doctor received nearly $1.3 million, seventy-five percent of which was promptly transferred into Kupelian’s bank account.

Kuplelian will serve two and a half years in custody and will pay back nearly $1 million to the government.

Iowa paid claims using incorrect Medicaid adjustments

The Iowa Department of Human Services (State agency) used incorrect federal medical assistance percentages (FMAPs) when processing claim adjustments to the Centers for Medicare & Medicaid Services (CMS).

FMAPs determine the amount of federal matching funds for State expenditures for assistance payments for specific social services in addition to State medical and medical insurance expenditures. The Social Security Act requires the Secretary of Health and Human Services (HHS) annually calculate and publish FMAPs.

Out of over one millions claims reviewed by the Office of Inspector General, the State agency processed almost eight hundred thousand claims using correct FMAPs. However, the remaining approximate two hundred and fifty thousand claims were paid via incorrect FMAPs. Such actions resulted in the State agency receiving an erroneous surplus of over seven hundred thousand dollars in Federal reimbursement.

As reported by the Office of Inspector General, there was an occurrence of such errors because the State agency lacked the needed adequate internal controls to process claim adjustments in compliance with federal requirements.

The Office of Inspector General recommended the State agency refund $713,955 to the federal government, determine and refund additional incorrectly documented amounts related to claim adjustments after conduction of the audit, and ensure future adjustments are made in accordance with federal requirements.

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