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

Policy & Regulation News

The Week That Was in Medical Billing Fraud

By Ryan Mcaskill

A recap of some high-profile charges, convictions and sentencing involving Medicare and Medicaid claims.

- The United Stated Department of Justice has put a stop to a number of different high-value Medicare fraud schemes and charged, convicted or sentences several physicians, executives and companies. The charges resulted in multiple millions of dollars in fraud. Here is a roundup of some of the legal dealings from the past week.

Ten defendants charged in $70 million Medicaid and Medicare scheme

A group task force made up of the FBI, NYPD and the Department of Health and Human Services (HHS) announced an indictment charging ten defendants with operating a massive healthcare fraud scheme through three medical clinics in Brooklyn and Queens, New York. The defendants submitted over $70 million in fraudulent claims to Medicare and Medicaid and receiving $25 million in insurance payments.

The group recruited poor and homeless people insured by Medicare and/or Medicaid to undergo unnecessary tests, that were often performed by an unlicensed professional at the clinics in exchange for cash and then billed the insurers.

“To fuel their greedy scheme, the defendants allegedly had phony patients submit to medically unnecessary treatments, paying these ‘patients’ a fraction of what they themselves reaped from the fraudulent billings,” Manhattan U.S. Attorney Preet Bharara said. “The scheme enriched the defendants and burdened Medicare and Medicaid, but the scheme has been exposed and ended.”

Principal sentenced to 11 years in prison in $28.3 million in Medicare fraud scam

Luis Duluc, 54, of Tampa plead guilty on February 3, 2013 to charges that he and his co-conspirators used various physical therapy clinics in Florida to to submit $28,347,065 in fraudulent reimbursement claims to Medicare between 2005 and 2009. Medicare paid an estimated $14.4 million.

As the former chairman and president of a Delaware holding company, which use to purchase comprehensive outpatient rehabilitation facilities and outpatient physical therapy providers, he had access to those clinics’ Medicare provider numbers. That allowed him to bill Medicare for services.

Latest in “no-show” doctor scheme pleads guilty of $13 million fraud

Connecticut resident Dr. Okon Umana pleaded guilty for his connection with a “no show” doctor scam that resulted in $13 million in healthcare fraud. He is the last of nine defendants charged to plead guilty. Between 2009 and 2012, Umana was the medical director of the Cropsey Medical Care clinic.

During this time, patients received unnecessary physical therapy, testing and other services from physician assistant without the proper supervision. These were then billed to Medicare and Medicaid under Umana’s provider number. In some cases the services billed never even occurred.

Rite Aid repaid U.S. government $2.99 million in gift card scandal

The Rite Aid Corporation paid the $2.99 million to resolve allegations that it violated the False Claims Act by inappropriately using gift cards as inducements to Medicare and Medicaid beneficiaries to transfer their prescriptions to the Rite Aid pharmacy. The practice was allegedly conducted between 2008 and 2012.

“Pharmacies are not allowed to improperly influence the decision-making of Medicare and Medicaid patients about where to fill prescriptions,” said Special Agent in Charge Glenn Ferry for the U.S. HHS Office of Inspector General.  “Pharmacy chains that manipulate patient choices in this way will be held accountable.”



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