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

Practice Management News

Physician Groups Pay $33M To Settle Healthcare Fraud Claims

Recent healthcare fraud schemes and cases involved kickback payment for referrals, physician self-referral violations, fraudulent claims, and illegal opioid prescriptions.

Healthcare fraud and Medicare fraud

Source: Thinkstock

By Jacqueline LaPointe

- Two physician groups will pay over $33 million to settle healthcare fraud allegations that the groups received illegal kickback payments for patient referrals to hospitals owned by former Health Management Associates (HMA), the Department of Justice (DoJ) recently announced.

HMA operated hospitals in the southern US. The organization faced Medicare fraud allegations in 2012 when the CBS show “60 Minutes” reported potentially illegal emergency department practices at the organization's hospitals.

The New York Times also reported in 2014 that HMA may have directed and incentivized physicians to increase inpatient admissions from the emergency department.

Community Health Systems acquired the hospital operator in 2013.

The recent physician group settlements involved accusations of similar fraudulent activities involving HMA.

READ MORE: How Providers Can Detect, Prevent Healthcare Fraud and Abuse

EmCare in Dallas, Texas agreed to pay $29.6 million to resolve claims that the physician group accepted kickbacks between 2008 and 2012 for recommending patients for inpatient admissions to HMA-owned hospitals when the patients should have been treated in an outpatient setting. EmCare provides physicians to staff emergency departments at hospitals.

HMA reportedly benefitted from the inappropriate referrals because Medicare reimburses hospitals about three times more for inpatient versus outpatient care.

The hospital operator also allegedly paid bonuses to EmCare physicians for inpatient admission referrals for emergency department patients. Contract retention and new contract receipts also depended on inpatient admission rates, according to the DoJ.

Pennsylvania-based Physicians Alliance Ltd and three of its executives entered a separate settlement with the Justice Department to resolve healthcare fraud claims also involving HMA.

The physician group will pay $4 million to settle allegations that the organization received kickbacks from HMA between 2009 and 2012 for referring patients to two Lancaster, PA area hospitals. The group will also surrender a percentage of proceeds to the DoJ from the sale of the group’s interest in HMA.

READ MORE: Strong Compliance Programs Key to Avoiding Healthcare Fraud

Whistleblowers brought the healthcare fraud claims against both physician groups, the Justice Department noted.

“These physicians prioritized their own financial interests over the needs of their patients,” stated US Attorney Louis D. Lappen for the Eastern District of Pennsylvania. “Such conduct compromises patient care and undermines the integrity of our nation’s federal health care programs. This settlement should serve as a warning to all providers who allow financial incentives to displace their medical judgment.”

21st Century Oncology settles False Claims Act accusations

Florida-based 21st Century Oncology agreed to pay $26 million to resolve Medicare fraud and False Claims Act allegations, the Justice Department recently announced.

In a self-disclosure, the cancer care provider reported that it knowingly submitted false meaningful use attestations to the Medicare EHR Incentive program for its employed physicians. The organization falsified data on its EHR use, fabricated software use reports, and superimposed EHR vendor onto reports.

The $26 million settlement also resolved government claims that 21st Century Oncology violated the Stark Law, which prohibits physician self-referrals.

READ MORE: New Medicare Fraud Audits to Ease Burden on Compliant Providers

The government accused the cancer care provider and its subsidiaries and affiliates of submitting, or causing the submission of, claims for services performed by physicians with whom the organization had a financial relationship. The claims allegedly violated the physician self-referral rules.

21st Century Oncology’s former Interim Vice President of Financial Planning Matthew Moore first accused the organization of Stark Law violations in a lawsuit. Moore will receive $2 million for his involvement in exposing the Medicare fraud scheme and recovering improper payments.

In addition to the settlement, 21st Century Oncology also agreed to enter a five-year Corporate Integrity Agreement with the Office of the Inspector General (OIG). The agreement mandates that the cancer care provider perform internal compliance reforms, such as employing an independent review organization to perform annual claims and arrangements audits.

Cardiologist arrested for healthcare fraud, opioid distribution

Law enforcement authorities recently arrested a cardiologist in Nevada for engaging in a healthcare fraud scheme and illegally distributing prescription opioids, the DoJ reported.

Devendra I. Patel, MD, of Elko, Nevada received 36 counts of distribution of controlled substances. The cardiologist allegedly prescribed fentanyl, hydrocodone, and oxycodone for patients on a regular basis despite the prescriptions being medically unnecessary.

Patel also received three counts of healthcare fraud. He supposedly submitted claims to Medicare and Medicaid for services that he did not render. The government accused the cardiologist of conducting EKGs on patients, so he could order nuclear stress tests. He did not actually perform the tests, the indictment states.

In addition, allegations against Patel also stated that he used a “poorly calibrated machine” and gave patients fraudulent X-rays to convince his patients they had coronary conditions or issues that needed treatment.

Patel faces a statutory maximum penalty of 10 years in prison for controlled substance distribution. The maximum penalty for healthcare fraud is also 10 years in prison.

Home health owner receives 80 years in prison for Medicare fraud

A district judge sentenced the owner of a home health agency in Houston to 80 years in prison for this involvement in a Medicare fraud scheme that cost the program $13 million.

In a recent announcement, the Justice Department reported that the home health agency owner, Ebong Tilong, pleaded guilty to submitting over $10 million in false and fraudulent claims to Medicare between February 2006 and June 2015. Tilong submitted the claims with his wife, Marie Neba, through their organization, Fiango Home Healthcare Inc.

Using Medicare reimbursement from the false and fraudulent claims, Tilong paid illegal kickbacks to patient recruiters for referrals and to Medicare beneficiaries for permitting Fiango to bill Medicare for home health services that were medically unnecessary or never performed, the DoJ stated.

The home health agency owner altered medical records and directed his staff to falsify records to show that Medicare beneficiaries qualified for and received home health services through Fiango.

Additionally, Tilong admitted to creating a shell company to maximize the profit he received from the Medicare fraud scheme. Quality Therapy Services launched to minimize the amount of taxes he had to pay to the IRS on the profits from the fraud scheme.

He also stated that he wrote nearly $1 million in checks from Fiango to Quality Therapy Services for physical therapy services that were never performed on the home health Medicare patients.

The tax evasion scheme cost the IRS over $344,500.

Tilong first pleaded guilty to his role in the Medicare fraud scheme in November 2016 and his role in the tax fraud scheme in June 2017. He did not appear for his original sentencing in Oct. 2017.

The Justice Department added that four other individuals have also pleaded guilty or been convicted in the Medicare fraud scheme. Tilong’s wife, Neba, received 75 years in prison and Connie Ray Island, a patient recruiter for Fiango, received 33 months in prison.

The former Fiango medical director, Nirmal Mazumdar, MD, was sentenced to time served and three years of home confinement. Another patient recruiter, Daisy Carter, is awaiting sentencing.

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