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

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NY Clinic Manager Pleads Guilty in $70M Medicare Fraud Scheme

Recent Medicaid and Medicare fraud cases involved a healthcare fraud ring in New York City and cases of up-coding.

A clinic manager in New York pled guilty for his role in a nine-year Medicaid, Medicare fraud scheme

Source: Thinkstock

By Jacqueline Belliveau

- A New York-based healthcare clinic manager recently pled guilty for his role in a Medicaid and Medicare fraud ring involving three clinics across New York City. The scheme to defraud federal healthcare programs resulted in $70 million in fraudulent Medicaid and Medicare claims.

Eduard Zavalunov, the clinic manager, was the latest individual to face the US Attorney for the Southern District of New York for his role in the Medicaid and Medicare fraud that lasted from 2005 to 2014. Eight other individuals have already pled guilty to the same counts, which includes conspiracy to commit wire fraud, mail fraud, and healthcare fraud.

Under the direction of Zavalunov, accomplices in the Medicaid and Medicare fraud ring allegedly approached disadvantaged individuals with Medicaid and/or Medicare coverage to go through unnecessary medical tests for cash payments. The “runners” typically found individuals in soup kitchens and welfare offices.

The runners also guided individuals on what to put on medical forms to make it appear as if the tests were medically necessary.

Before the individuals came into the healthcare clinics for unnecessary tests, though, the healthcare fraud accomplices acquired individual Medicaid and Medicare information and verified that the respective payer would reimburse the clinic for any potential tests.

Once the healthcare fraud ring members obtained confirmation that Medicaid and Medicare would cover the services, the individuals would be directed to the clinic and staff would perform the tests. Some common services provided through the Medicaid and Medicare fraud scheme included stress or sleep tests.

In addition to being medically unnecessary, non-physician clinic staff performed many of the tests even though Medicaid and Medicare require physician administration for reimbursement.

Two of the healthcare clinic owners also covered up that they were the real owners of the facilities by paying a licensed physician to act as the nominal owner and/or the physician who was billing private and public payers for services performed.

The almost decade-long Medicare and Medicare fraud scheme resulted in over $70 million in fraudulent medical bills submitted to federal healthcare programs, with the healthcare clinics receiving about $25 million in claims reimbursements.

All of those who pled guilty in the healthcare fraud ring face a maximum prison sentence of 20 years and a maximum $250,000 fine or double the gross gain or loss stemming from the scheme.

National physician group practice to pay $60 million to resolve Medicaid, Medicare fraud accusations

TeamHealth Holdings, a successor in interest to IPC Health Inc., recently committed to paying $60 million and interest for the national physician group practice’s role in fraudulently billing federal healthcare programs.

IPC Healthcare, formerly known as IPC The Hospitalists Inc., reportedly submitted claims for greater or more expensive levels of services than were actually furnished. The up-coding scheme impacted claim submissions to Medicare, Medicare, the Defense Health Agency, and the Federal Employees Health Benefits Program.

The organization also allegedly “knowingly and systematically encouraged false billings by its hospitalists” and even pressured hospitalists who tended to bill for lower services that had lesser claim reimbursement rates to “catch up” to their colleagues.

A former hospitalist at IPC Healthcare notified the authorities about the Medicaid and Medicare fraud scheme by filing a whistleblower case against the national physician group.

In addition to the multi-million-dollar cash settlement, TeamHealth also agreed to sign a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of the Inspector General (OIG). The agreement targets the company’s hospital medicine department.

Through the agreement, OIG intends to boost TeamHealth’s “accountability and transparency” to ensure that the company can prevent and identify potential healthcare fraud schemes in the future.

“When healthcare companies boost their profits by misrepresenting the services they bill to taxpayer-funded healthcare programs, our office will make sure they are held accountable for their deceptive schemes and that they make changes to bill these programs appropriately,” stated Lamont Pugh, Special Agent in Charge at the OIG.

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