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

Policy & Regulation News

October 9: 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.

medicare fraud in healthcare

PharMerica Corp to pay over $9 million in kickback allegations

Kentucky-based PharMerica Corp, one of the largest nursing home pharmacies, will pay $9.25 million to settle kickback allegations, confirms the Department of Justice this week. Nearly $6.75 million of the settlement will go the United States. $2.5 million will go toward paying for states’ Medicaid program claims. Lawsuits were filed under whistleblower provisions of the False Claims Act, which allows private individuals to sue for false claims and acquire compensation for doing so.

PharMerica’s allegations involve receiving transactional kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for advertisement of the prescription drug Depakote to nursing home residents.

“Elderly nursing home residents suffering from dementia have little control over the medications they receive and depend on the unbiased judgment of healthcare professionals for their daily care,” states Principal Deputy Assistant Attorney, General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Kickbacks to entities making drug recommendations compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs,” Mizer says.

Adds Anthony P. Giorno, United States Attorney of the Western District of Virginia, “When those activities involve improprieties such as the payment of kickbacks, we will not hesitate to hold them accountable. We owe nothing less in fulfilling our duty to ensure that nursing home residents are provided with the appropriate drugs based upon their needs rather than the business interests of the companies providing the drugs.”

Additionally adds Nick DiGiulio, Special Agent in Charge at the United States Department of Health and Human Services’ Office of Inspector General (HHS-OIG), “Nursing home pharmacies accepting kickbacks from drug makers in exchange for prescribing certain prescription drugs puts vulnerable residents at risk for receiving unnecessary medications, corrupts medical decision making, and inflates health care costs.”

Florida physician involved in $20M healthcare Medicare scheme

Henry Lora, MD, a physician based in Miami. was charged this week in a multi-million dollar Medicare fraud scheme involving wire fraud, receiving kickbacks, and making false healthcare statements. According to the Department of Justice, Lora may be personally responsible for a $20 million deficit for payment on fraudulent claims.

“According to the indictment, the alleged actions of Lora and his co-conspirators prompted multiple Miami-Dade home health care agencies and other providers to bill Medicare for services that were not medically necessary or not provided. Medicare made payments on these fraudulent claims,” announced the Department of Justice.

One of Lora's co-conspirators, Isabel Medina, the owner of Merfi Corporation, pleaded guilty to conspiracy to commit fraud and was sentenced last year to nearly a decade in jail. Medina admitted causing financial deficit to Medicare beyond $20 million, says the Department of Justice.


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