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Policy & Regulation News

Third MI Provider Convicted in $17.1M Healthcare Fraud Case

Recent healthcare fraud schemes involved medical billing for unnecessary services, charging for services not rendered, and kickback payments.

The DoJ announced several multi-million dollar healthcare fraud schemes in the spring of 2017

Source: Thinkstock

By Jacqueline Belliveau

- Healthcare fraud prevention and prosecution will continue to be a major area of focus for the Department of Justice (DoJ), Acting Assistant Attorney General Kenneth A. Blanco recently told the American Bar Association.

With healthcare fraud draining the industry of up to $100 billion per year, he said, the federal agency has addressed “some of the most impactful healthcare fraud cases yet.”

In light of Blanco’s statements, the DoJ recently announced several healthcare fraud cases that have cost the healthcare industry and individual providers millions.

Three providers convicted in $17.1 million Medicare fraud scheme in Detroit

A jury recently convicted a third Detroit-area physician for his involvement in a $17.1 million Medicare fraud scheme that billed the federal healthcare program for medically unnecessary services.

Gerald Daneshvar, MD, received one count of conspiracy to commit healthcare fraud after enduring a two-week long jury trial. The former Lake Michigan Mobile Doctors provider reportedly treated patients in their home who did not qualify for visiting physician services between 2012 and 2013. He then charged Medicare at the highest billing codes for the inappropriate treatment, the DoJ stated.

READ MORE: OIG Releases Healthcare Fraud Compliance Program Guidelines

The evidence also revealed that Daneshvar billed Medicare for home visits that should have lasted between 40 and 60 minutes, but only averaged about 15 minutes or less with each patient. He allegedly performed as many as 22 home visits per day to maximize his revenue.

He also boosted his healthcare revenue by ordering unnecessary tests to obtain larger bonuses, according to the announcement.

Daneshvar’s conviction follows two guilty pleas from co-conspirators. Leonard Van Gelder, MD, and Stephen Mason, MD, each pleaded guilty in connection with the $17.1 million Medicare fraud case in March 2017 and December 2016, respectively.

Van Gelder and Mason told authorities that they had performed medically unnecessary services and charged Medicare at the highest billing codes. They also testified at Daneshvar’s trial.

DoJ nabs Detroit-area podiatrist in $13.9 million healthcare fraud case

Another Detroit-area provider also recently faced healthcare fraud accusations after the DoJ uncovered a Medicare fraud scheme occurring at two podiatric organizations.

READ MORE: Strong Compliance Programs Key to Avoiding Healthcare Fraud

Law enforcement officials arrested and charged Lawrence Young, DPM, in April 2017 for his role in a $13.9 million healthcare fraud scheme.

According to the DoJ, Young falsely told some patients that they needed weekly or bi-weekly shots and minor surgeries to avoid hammertoe. However, the healthcare services were reportedly medically unnecessary.

The patients continued to see Young at the two facilities he owned in the Detroit area and Young billed Medicare for the podiatry services.

He also allegedly submitted claims to Medicare for services never rendered and medical devices never given to patients.

Young currently faces six counts of healthcare fraud.

Indiana University Health and HealthNet to pay $18 million for False Claims allegations

READ MORE: Preparing the Healthcare Revenue Cycle for Value-Based Care

A potential illegal kickback scheme involving Indiana University Health and HealthNet resulted in the two organizations agreeing to pay $5.1 million to the federal government and $3.9 million to Indiana.

The two healthcare organizations reportedly violated federal and state false claim laws after engaging in a kickback scheme involving the referrals of HealthNet OB/GYN patients to Indiana University Health’s Methodist Hospital.

From May 1, 2013, to August 30, 2016, Indiana University Health gave HealthNet an interest-free credit line exceeding $10 million, the DoJ reported. Indiana University Health reportedly conveyed to HealthNet that the organization did not have to repay a significant portion of the loan in exchange for OB/GYN patient referrals.

However, anti-kickback regulations prohibit entities from entering financial arrangements to induce the referrals of healthcare services and goods paid for by federal healthcare programs. Any claims submitted to the program under kickback schemes are considered false claims.

“The payment of illegal remuneration to induce patient referrals interferes with healthcare providers’ independent judgment when they make referral decisions for their patients,” Joyce R. Branda, Deputy Assistant Attorney General for the Civil Division, stated regarding the Indiana case. “We will continue to pursue healthcare providers that engage in such conduct, which undermines public confidence in our healthcare system.”

Blood test lab agrees to pay $6 million to resolve healthcare fraud accusations

New Jersey-based Quest Diagnostics Inc. plans to pay $6 million to the federal government to settle anti-kickback and False Claims violation allegations at one of its subsidiaries in California.

The subsidiary involved is Berkeley HeartLab Inc., which Quest Diagnostics acquired in 2011.

The federal government recently uncovered a potential kickback situation in which the blood testing laboratory induced providers and patients to use Berkeley HeartLab for services. Some of the tests were supposedly also medically unnecessary.

In addition, the DoJ reported that the laboratory paid kickbacks to referring providers by disguising the illegal payments as “process and handling” fees. The laboratory also allegedly paid kickbacks to some patients by waiving co-payments.

Berkeley HeartLab reportedly used the kickback payments to incentivize providers and patients to use their laboratory for tests.

The federal government also accused the laboratory of billing federal healthcare programs for medically unnecessary cardiovascular tests.

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