Policy & Regulation News

June 19: 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.

Sylvia Mathews Burwell

Burwell announces $712M in false billing sweep

As part of a nationwide sweep across 17 districts, as announced this week by Sylvia M. Burwell, Secretary of the Department of Health and Human Services (HHS), 243 individuals face charges. This number includes 46 physicians, nurses, and other licensed medical professionals for allegedly participating in Medicare fraud schemes involving $712 million in false billings.

“This coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and loss amount,” confirms the DOJ’s release. The Centers for Medicare & Medicaid Services (CMS) has suspended healthcare providers using its suspension authority via the Affordable Care Act (ACA). Some of the healthcare fraud-related crimes noted include money laundering, aggravated identity theft, and anti-kickback schemes.

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  • “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,” states 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,” Lynch says, declaring personal determination to continue efforts with federal, state, and local partners.

    Ghost positions, improperly paid doctors, record settlement

    William Zubkoff, former President and Executive Director of Florida-based Hebrew Homes Health Network, Inc, faces a $17 million settlement this week involving a skilled nursing facility’s alleged violations of the Anti-Kickback Statute.

    “The record settlement announced today demonstrates this office’s commitment to rooting out all forms of illegal kickback schemes,” states Attorney Wifredo A. Ferrer of the Southern District of Florida. “And that is certainly true in the context of nursing homes, where the Department of Justice will not allow healthcare decisions for elderly Medicare patients to be influenced by kickback payments to physicians,” adds Ferrer.

    Hebrew Homes hired physicians to pose as medical directors within a “sophisticated” kickback scheme. This occurred over a 7-year period. According to the DOJ, these alleged medical directors were paid several thousands monthly but were given very few contractual duties. They were, in fact, paid for patient referrals to the Hebrew Homes facilities. Once the assumed medical directors were formally acquired into payroll, the number of patient referrals “increased exponentially,” confirms the DOJ.

    “Hebrew Homes’ intricate kickback scheme in this record-setting case threatened the impartiality of physician referrals, the financial integrity of Medicare and the public’s trust in the health care system,” says Special Agent in Charge, Shimon R. Richmond of the Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  “Our agency will continue to investigate nursing homes and other health care providers that seek to illegally boost profits at the expense of federal health care programs,” Richmond confirms.

    Hebrew Homes agrees to change its policies regarding the hiring of medical directors.