Articles Tagged with healthcare

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On November 8, 2016, the United States Attorney’s Office for the Southern District Florida announced the conviction and sentencing of two defendants in a Medicare Part D fraud case.

What is Medicare Part D?

As most people know, Medicare is a federally funded program that provides free or below-cost healthcare benefits to certain individuals, primarily the elderly, blind, and disabled.  Medicare offers different types of benefits through program “parts.” Part D of Medicare, known as the Medicare Part D program, subsidizes the costs of prescription drugs for Medicare beneficiaries in the United States.

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HIPPA and Whistleblower Cases

Most people in the healthcare industry know that documents covered by HIPAA must be treated with utmost secrecy and care.   Protecting patient privacy is a big deal.  Thus, questions frequently arise when a healthcare worker wants to blow the whistle on fraud.  Can he or she use HIPAA protected documents to support their claims?

The short answer is yes, with certain qualifications.   The government wants to encourage people who know about fraud to come forward and report it.   Therefore, the government has enacted a specific HIPAA exception for whistleblowers.

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Report Kickbacks and 1099 Sales Reps

Many healthcare companies engage independent sales representatives or marketers to sell their goods and services.   These include pharmaceutical companies, diagnostic laboratories, home health agencies, imaging centers and many others.

Unfortunately, many of these companies violate the Anti-Kickback Statute (AKS) and the False Claims Act through the manner in which they pay these sales people.  In general, sales people can be engaged and paid in one of two ways:  (1) as W-2 employees, or (2) as 1099 independent contractors.  W-2 employees require greater supervision on the part of the employer, whereas independent contractors do not.  Also, employers must withhold taxes and pay payroll taxes for W-2 employees, which is not the case for 1099 independent contractors.

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In the world of healthcare, federal law makes it illegal to offer or receive a kickback in exchange for referring or arranging for the furnishing of any item or service that will be covered by a federal healthcare program.   The Anti-kickback Statute can be found at 42 U.S.C. 1320a–7B.

But what is a kickback?  The statute makes it illegal to “solicit or receive any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in-kind.”  This means a kickback can be any type of remuneration, benefit or compensation, whether direct or indirect, hidden or secret.

The anti-kickback statute has two overarching purposes.

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According to the Centers for Medicare and Medicaid Services, as of February 2016, there were over 56,000,000 beneficiaries enrolled in the original Medicare and Medicare Advantage plans.  Given the number of patients, just imagine how many Medicare claims are submitted every day.  It’s no wonder the Medicare system is a target for fraud.  With the volume of legitimate Medicare claims that are submitted, surely the government won’t notice a few thousand fraudulent ones thrown in to the mix, right?  With help from whistleblowers, those fraudsters can be stopped and taxpayer dollars can be recovered.  The False Claims Act permits whistleblowers to bring qui tam actions for fraud committed against the government.  Qui tam whistleblowers may be entitled to a percentage of the government’s recovery.

If you are employed in the healthcare field – a doctor, dentist, nurse, therapist, medical biller, receptionist, aide, technician, patient advocate, etc. – would you know Medicare fraud if you saw it?  Some Medicare fraud schemes are easy to spot– billing for patients that don’t exist using stolen Medicare numbers; billing Medicare for durable medical equipment that was never provided to the patient – others are not so obvious.  Here are some other examples of Medicare fraud that aren’t always so easy to identify.

  • Billing separately for items that should be bundled and submitted under a single billing code;
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According to the Justice Department, the Medicare Fraud Strike Force conducted a nationwide operation in 17 cities this week.  The sweep resulted in criminal charges against 243 individuals for their alleged participation in healthcare fraud schemes involving over $700 million in false billings to government healthcare programs.  Forty-six (46) of the individuals were doctors, nurses, or other licensed medical professionals. According to the U.S. Attorney for the Southern District of Florida, seventy-three (73) of the individuals are residents of South Florida.

According to the U.S. Attorney General, those charged are alleged to have participated in various criminal activities including violation of the anti-kickback statute, money laundering, identity theft, and conspiracy to commit healthcare fraud.  The charges relate to claims submitted to government healthcare programs, such as Medicaid and Medicare for treatments that were either medically unnecessary or never provided.  In some cases, patient recruiters or others were allegedly paid illegal kickbacks in return for providing beneficiary information to medical providers so the providers could submit fraudulent bills to government healthcare programs.

U.S. Attorney Wifredo Ferrer, announced that the majority of the 73 Florida residents charged live in Miami-Dade County.  The Florida residents charged include:

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A press release by the Justice Department announced that Dignity Health (“Dignity”), formerly known as Catholic Healthcare West, has agreed to settle allegations by a whistleblower in a qui tam lawsuit that 13 of its hospitals submitted false claims to Medicare and TRICARE in violation of the False Claims Act.

According to its website, Dignity, headquartered in San Francisco, California, is the largest hospital provider in California and the fifth largest health system in the nation.  The whistleblower’s allegations involved 13 of Dignity’s 39 hospitals in California, Arizona, and Nevada.

In 2009, Kathleen Hawkins, a former employee of Dignity, filed a whistleblower lawsuit under the qui tam provisions of the False Claims Act in the Northern District of California. According to the whistleblower, 13 of Dignity’s hospitals knowingly overcharged government healthcare programs, such as Medicare and TRICARE (the military healthcare program), for inpatient admissions when care should have been given on an outpatient basis.

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The Department of Justice announced that DaVita Healthcare Partners, Inc. (“DaVita”) has agreed to settle allegations that it violated the False Claims Act and the Anti-Kickback Statute for $350 million, plus the civil forfeiture of $39 million. The allegations were first made in a lawsuit filed under the qui tam provisions of the False Claims Act by whistleblower, David Barbetta, a former Senior Financial Analyst in DaVita’s mergers and acquisitions department.

According to DaVita’s website, it is one of the leading providers of dialysis services to patients with chronic kidney disease and end stage renal failure. It has 2,119 outpatient dialysis centers in 46 states and the District of Columbia.  DaVita is headquartered in Denver, Colorado and acquired Healthcare Partners, an operator of medical groups in several states, in 2012.

In his qui tam complaint, the whistleblower alleged that DaVita violated the False Claims Act by submitting claims for payment involving the referral of patients from physicians with whom DaVita had illegal kickback arrangements.  According to the government, DaVita engaged in multiple complicated schemes to provide improper compensation to physicians to induce them to refer patients to DaVita’s dialysis centers.  For example, the government alleged that DaVita identified medical practices with a significant number of patients in a specific geographical area suffering from renal disease and offered to engage in joint venture dialysis clinics to which the physicians groups would then refer their dialysis patients.  The government claimed the joint ventures consisted of DaVita either acquiring an interest in an existing dialysis clinic owned by the physician or the sale of an interest in a DaVita clinic to the physician. The complaint stated that the physicians were often paid to serve as medical directors of the joint venture clinics.  The government also alleged that DaVita entered into non-compete and non-disparagement agreements with the physicians in which the physicians agreed that they would not refer their patients to any non-DaVita dialysis provider.

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Tenet Healthcare Corporation and several of its affiliates have agreed to settle allegations by a whistleblower in a qui tam lawsuit that the entities violated the Stark Law, the Anti-kickback Statute, and the False Claims Act by engaging in improper financial relationships with certain physicians. According to the Settlement Agreement, the Defendants Tenet Healthcare Corporation, Tenet Healthsystem GB, Inc. Tenet South Fulton, Inc., Tenet Hialeah Healthsystem, Inc., Lifemark Hospitals of Florida, Inc., Tenet HealthSystem North Shore, Inc., Tenet Good Samaritan, Inc., Tenet St. Mary’s Inc., Brookwood Center Development Corporation, Eastern Professional Properties, Inc., AMISUB (SFH), Inc., Tenet Hospitals Limited, San Ramon Regional Medical Center, Inc. and Los Alamitos Medical Center (collectively “Tenet”) have agreed to pay $4,000,000 to settle the whistleblower’s allegations.  

The Settlement Agreement reflects that the whistleblower, Marc Osheroff, filed a lawsuit under the qui tam provisions of the federal False Claims Act, as well as the state False Claims Acts of Florida, California, Texas, and Tennessee in July 2009.  The United States, Florida, California, Texas, and Tennessee declined to intervene in the qui tam action.  The whistleblower chose to proceed with the case on his own.

The whistleblower alleged that Tenet engaged in improper financial relationships with numerous physicians in violation of the Stark Law and the Anti-kickback Statute.  Specifically, the whistleblower alleged that, between 2005 and 2013, Tenet entered into medical office building leases with the physicians at rates that were below fair market value.  Tenet then allegedly submitted false claims to Medicare for inpatient and outpatient services referred by those same physicians, in violation of the False Claims Act.