Healthcare Fraud and Abuse Crackdown Not Slowing as Evidenced by Recent Cases


A blue door with two small holes in it.The federal government has been busy since the beginning of the year announcing arrests, convictions and settlements relating to healthcare fraud and abuse. The activities relate to violations of the Stark Law, anti-kickback law and federal False Claims Act, and there appears to be no end in sight. Whether it’s home health, transportation, durable medical equipment or physician-related services, no area of healthcare is immune.

The following is a round-up of healthcare fraud and abuse cases from the last 30 days.

Detroit Home Health Care Agency Owner Sentenced to 57 Months in $3.4 Million Health Care Fraud Scheme

Mohammad Rafiq was the owner and operator of a Detroit-area home healthcare agency that purportedly provided home healthcare and physical therapy services to Medicare beneficiaries. The government alleged that he and 19 others were involved in the scheme, submitting fraudulent claims for services that were never rendered, and with paying kickbacks to obtain patients to be billed.

According to his plea agreement, between February 2009 and November 2013, Rafiq paid physicians and recruiters to refer Medicare beneficiaries to his home care agency and sign medical documents falsely certifying that they required home healthcare. Rafiq also directed patient recruiters and employees to pay kickbacks to Medicare beneficiaries in exchange for signing multiple blank physical therapy records. In addition to his prison sentence, Rafiq was ordered to pay $3.4 million in restitution.

Houston Psychiatrist Sentenced to 144 Months for Role in $158 Million Medicare Fraud Scheme

Sharon Iglehart, a former attending psychiatrist at a Houston hospital, was sentenced to 144 months in prison for her role in a $158 million Medicare fraud scheme involving false claims for mental health treatment. She was convicted in September 2015 of one count of conspiracy to commit healthcare fraud, one count of healthcare fraud and three counts of making false statements relating to healthcare matters.

According to evidence presented at trial, from 2006 until June 2012, Iglehart and 12 others engaged in a scheme to defraud Medicare by submitting, through the hospital, approximately $158 million in false and fraudulent claims to Medicare for partial hospitalization program services. The evidence showed that the Medicare beneficiaries for whom the hospital billed Medicare did not receive those services and, in fact, most rarely saw a psychiatrist and did not receive intensive psychiatric treatment at all.

In addition, evidence showed that Iglehart personally billed Medicare for individual psychotherapy and other treatment purportedly provided to patients at the hospital’s other locations – treatment that she never provided. Further, it was alleged that Iglehart falsified the medical records of patients at the hospital’s inpatient facility to make it appear as if she provided psychiatric treatment when she did not.

Patient Recruiter and Staffing Company Employee Convicted of $2 Million Home Health Care Fraud Scheme

Carlos Rodriguez Nerey of Miami was convicted of one count of conspiracy to defraud the United States and pay and receive healthcare kickbacks and one count of receiving healthcare kickbacks.

According to evidence presented at trial, Nerey claimed to work at a staffing company, but was in fact a patient recruiter for two fraudulent home healthcare agencies in Miami. The government presented evidence demonstrating that Nerey worked for a number of fraudulent home healthcare companies in Miami before he began accepting kickbacks from two of them. The defendant created a shell company in order to collect kickbacks and received approximately $250,000 as a result of his role in the scheme. Medicare paid more than $2 million to the fraudulent home healthcare agencies for those claims.

Miami-Based Transportation Company President Sentenced to 60 Months for Role in $70 Million Healthcare Fraud Scheme

Damian Mayol, the president of a Miami-based transportation company, was sentenced to 60 months in prison, ordered to pay $26.8 million in restitution and to forfeit the same amount for his role in a healthcare fraud scheme involving three mental health centers that submitted approximately $70 million in false and fraudulent claims to Medicare. He was convicted in January of conspiracy to pay healthcare kickbacks.

According to evidence, Mayol, along with his co-conspirators, used the transportation company to coordinate the payment of illegal healthcare kickbacks to recruiters, who in return, referred patients to three now-defunct community mental health clinics that purported to provide intensive mental health services to Medicare beneficiaries in the Miami area.

Beneficiaries were recruited and the centers billed Medicare for partial hospitalization program (PHP) services that were not medically necessary or not provided to patients. Trial evidence demonstrated that patient records were falsified to support claims for reimbursement from Medicare. Between January 2008 and December 2010, the centers submitted approximately $70 million in false and fraudulent claims to Medicare for which Medicare paid approximately $28 million. In December 2015, three of Mayol’s co-defendants were sentenced to prison terms ranging from 28 months to 120 months on related charges.

Defendant Pleads Guilty in Multimillion-Dollar Medicare Fraud Scheme involving Detroit-Area Home Health Companies

Muhammad Tari, the owner of home healthcare and hospice companies in the Detroit area, pleaded guilty to one count of conspiracy to commit healthcare and wire fraud. He was the last of five defendants who pleaded guilty to their roles in the $33 million Medicare fraud scheme.

Co-conspirators Shahid Tahir and Manawar Javed, two other owners of the home healthcare and hospice companies, previously pleaded guilty to one count of conspiracy to commit healthcare and wire fraud, while Waseem Alam and Hatem Ataya, two physicians involved in the fraud scheme, previously pleaded guilty one count of conspiracy to commit healthcare fraud and wire fraud. Alam also pleaded guilty to an additional count of structuring.

According to their plea agreement, Tahir, Javed and Tariq paid kickbacks, bribes and other inducements to Alam, Ataya and other physicians, as well as to marketers and patient recruiters, for patient referrals to companies they owned. Tahir, Javed and Tariq admitted that they would then bill Medicare for home care and hospice services that were often not medically necessary and not provided.

As part of his guilty plea, Alam admitted that he received kickbacks and other inducements from the owners of the home healthcare companies in exchange for referrals. Alam bribed his patients into accepting services by providing them with medically unnecessary controlled substance prescriptions both personally and through unlicensed individuals. Co-owner Tariq admitted that he knew about Alam’s controlled substances bribes to patients. Alam also instructed others to falsify patient files to hide the fact that the prescriptions were medically unnecessary.

Ataya admitted to accepting kickbacks and other inducements in exchange for home health and hospice referrals. He also admitted that the Tahir-associated companies would submit false billing based on his referrals for home health and hospice services, when, at times, these services were neither medically necessary nor provided.

Detroit-Area Physician Sentenced to 45 Months for Role in $5.7 Million Medicare Fraud Scheme

Laran Lerner, a Detroit-area doctor, was sentenced to 45 months in prison and ordered to pay $2.8 million in restitution for his role in a $5.7 million Medicare fraud scheme. Lerner previously pleaded guilty to one count of healthcare fraud and one count of structuring cash transactions to avoid bank reporting requirements.

As part of his plea agreement, Lerner admitting to luring patients into his clinic with prescriptions for medically unnecessary controlled substances and billed Medicare for a variety of unnecessary prescriptions, diagnostic tests and office visits to make it look like he was providing legitimate medical services.

Lerner admitted that the controlled medications were used to facilitate and conceal his scheme to steal millions of dollars from the Medicare program. Lerner also admitted that he structured cash deposits he received in $5,000 increments on consecutive days at various bank branch locations to avoid the requirement that domestic banks file a currency transaction report with the Secretary of the Treasury for all currency transactions over $10,000. As part of his plea agreement, Lerner agreed to permanently surrender his Drug Enforcement Administration (DEA) controlled substance registration and not to re-apply for this license in the future.

Respironics to Pay $34.8 Million for Allegedly Causing False Claims Related to the Sale of Sleep Apnea Masks

Respironics Inc., a Pennsylvania-based sleep apnea mask maker, agreed to pay $34.8 million to resolve allegations relating to the False Claims Act for paying kickbacks in the form of free call center services to durable medical equipment (DME) suppliers that bought its masks for patients with sleep apnea. The company also must pay another $660,000 to various state governments based on their participation in the Medicaid program.

Respironics allegedly provided DME companies with call center services to meet their patients’ resupply needs at no charge as long as the patients were using masks manufactured by Respironics. Otherwise, the DME companies would have to pay a monthly fee based on the number of patients who used masks manufactured by Respironics’ competitors.

The case grew out of a whistleblower lawsuit originally filed by Dr. Gibran Ameer who worked for medical equipment buyers that purchased the masks. He will receive $5.38 million out of the federal share of the recovery.

Florida Audiologist Sentenced to 94 Months in Multimillion-Dollar Health Care Fraud and Money Laundering Scheme

Terri L. Schneider was sentenced to 94 months in prison and ordered to pay $2.5 million in restitution, joint and several. Schneider, a Lakeland-based audiologist, was previously found guilty of conspiracy to commit healthcare fraud and wire fraud, healthcare fraud, conspiracy to commit money laundering, money laundering and aggravated identity theft.

From June 2010 through approximately May 2014, Schneider and her co-conspirators used three purported Florida-based medical clinics to submit approximately $12.3 million in false and fraudulent claims to Medicare seeking reimbursement for radiology, audiology, cardiology and neurology services.  Medicare paid approximately $2.8 million in reimbursement on the fraudulent claims. The evidence showed that Schneider and her co-conspirators used forged and falsified documents in the Medicare enrollment process for the medical clinics that they operated under false pretenses, and billed Medicare for services that had not been rendered by physicians. The co-conspirators also paid illegal kickbacks in exchange for access to Medicare patients and Medicare patient information used in the fraud scheme.

New Orleans Jury Convicts Company Owner and Doctor for Roles in $34 Million Fraud Scheme

Elaine Davis and Dr. Pramela Ganji were convicted of one count each of conspiracy to commit healthcare fraud and one count of healthcare fraud for their roles in a $34 million Medicare fraud scheme that operated over the course of seven years in New Orleans and surrounding communities.

Evidence showed that Davis owned and controlled the operations of a home healthcare company that billed Medicare for services that were not needed and/or were not provided. Davis paid employees to recruit new patients and then sent their Medicare information to doctors, including Ganji, to obtain their signatures to certify that the patients qualified to receive home healthcare services, which trial evidence showed they did not qualify for or need. In fact, Ganji had often never seen these patients. Medicare paid approximately $29.6 million on these claims.

Davis was found not guilty of three additional counts of healthcare fraud and Ganji was found not guilty of one additional count of healthcare fraud. A third doctor was acquitted of all charges.

Owner of Two Miami Clinics Sentenced to 82 Months for Health Care Fraud Charges

Carlos Medina pleaded guilty to one count of conspiracy to commit healthcare fraud. He was sentenced to 82 months in prison and ordered to forfeit $3 million. As part of his plea agreement, Medina admitted to being the owner two fraudulent medical clinics in Miami. However, the clinics’ corporate paperwork indicated others were the owners.

Medina’s clinics purportedly provided medically necessary services to Medicare beneficiaries, but in reality the clinics charged $100 to 200 in kickbacks in exchange for prescriptions for home healthcare services. Some of the beneficiaries who visited the clinics did not meet Medicare’s criteria for the prescribed services and some of the services prescribed by the medical professionals were never provided. Medina’s clinics sold prescriptions that were used to facilitate the submission of false and fraudulent claims to Medicare by more than 20 home health agencies in the Miami area. Medicare paid more than $3 million during a period of less than two years.

Every week doctors, suppliers, and other healthcare entities become the target of healthcare fraud investigations. It is imperative that arrangements be structured to comply with the Stark Law and anti-kickback law. In addition, existing arrangements should be reviewed to ensure that they comply with the latest changes in the law. The Health Law Offices of Anthony C. Vitale keeps up to date with the latest changes in healthcare law and can assist providers in these efforts.

Ready to find out more?

Call 305-358-4500 to schedule a
FREE 15-minute consultation today!

Posted in

The Health Law Offices of Anthony C. Vitale

Categories