June a busy month for healthcare fraud enforcement

Individual physicians, medical billers, DME manufacturers, healthcare executives and even entire healthcare systems were on the receiving end of the U.S. Department of Health and Human Services Office of the Inspector General’s (OIG) enforcement efforts last month. In fact, there were 39 actions announced by the IG’s office in June, up from 35 in May and 28 in April.

With so much enforcement activity taking place, we thought it might be a good time to remind readers about the kinds of activity that can lead to an arrest, jail time and significant fines.

On the last day of the month alone, the OIG announced the following five actions:

An Alabama pain management physician was arrested on federal and state charges of unlawfully distributing schedule II controlled substances, money laundering and engaging in monetary transactions in property derived from specified unlawful activity. Read more here.

A Detroit-area medical biller was sentenced to more than four years in prison and ordered to pay $3.2 million in restitution jointly and severally with her co-defendants, for her role in a $7.3 million Medicare and Medicaid fraud scheme involving medical services that were billed to Medicare and Medicaid, but not rendered as billed. Read more here.

Carolinas Healthcare System agreed to pay the government $6.5 million to resolve allegations that it violated the False Claims Act, by “up-coding” claims for urine drug tests to receive higher payment than allowed for the tests. Read more here.

A Pennsylvania physician was sentenced to seven years in prison, 60 months of which will be concurrent with a sentence imposed in the Southern District of Florida; three years’ supervised release; ordered to pay restitution to the IRS of $722,476.55 and $2.3 million to Health and Human Services after being convicted of conspiring to commit an offense against the United States and willfully failing to remit employment taxes. Read more here.

The former Chief Financial Officer of Soundpath Health, a Washington state health insurance company, was sentenced to a year and a day in prison for embezzling more than $631,000 from his employer. The embezzlement was part of a complex wire fraud scheme that 58-year-old Zachary Smulski used to fund his own start-up companies. Read more here.

Given Florida’s reputation as the epicenter for healthcare fraud, it should come as no surprise that several of the June enforcement actions involved Florida-based providers.

WellCare’s former General Counsel, Thaddeus M.S. Bereday (52, Tampa) pleaded guilty to one count of making a false statement to the Florida Medicaid program. He faces a maximum penalty of five years in federal prison. He and four others were indicted on various federal criminal violations relating to a scheme to defraud the Florida Medicaid program by making false and fraudulent statements relating to expenditure information for behavioral healthcare services. Read more here.

An Orlando doctor and an infusion clinic owner were sentenced to 64 months in prison and two years of supervised release, and 90 months and two years of supervised release, respectively for their roles in a $13.7 million Medicare fraud conspiracy that involved submitting claims for infusion-therapy drugs that were never purchased, never provided and not medically necessary. Read more here.

A mother and daughter who secretly co-owned and operated seven home healthcare agencies in Miami were each sentenced to over 10 years in prison for their roles in a $20 million Medicare fraud conspiracy that involved paying illegal healthcare kickbacks to patient recruiters and medical professionals. Read more here.

A Boca Raton man was charged in an indictment unsealed on June 9 for his alleged participation in a $63 million healthcare fraud scheme involving a now-defunct community mental health center in Miami. The indictment alleges that he accepted kickbacks in exchange for referring Medicare beneficiaries to the mental health center to bill Medicare for mental health treatment that the beneficiaries did not need, qualify for, nor receive. Read more here.

Late last month, we wrote about what was June’s biggest financial enforcement hit of the month for a healthcare company. Genesis Healthcare, Inc. was ordered to pay the federal government $53,639,288.04, including interest, to settle six federal lawsuits and investigations regarding the submission of false claims for medically unnecessary therapy and hospice services, and grossly substandard nursing home care.  Read more here.

And, the recipient of the longest prison sentence for healthcare fraud in June goes to Sardar Ashrafkhan of Ypsilanti, Michigan. He was sentenced to 23 years in prison for participating in a conspiracy to distribute prescription pills, conspiracy to commit healthcare fraud, and money laundering. Ashrafkhan was responsible for participating in illegally distributing more than 200,000 dosage units of oxycodone (including OxyContin) and opana, powerful Schedule II opiates. He was responsible for more than one million dosage units of another opiate, hydrocodone (Vicodin, lortab), and more than three million dosage units of controlled substances of all kinds. His acts resulted in more than $8 million in healthcare fraud. Read more here.

Keep in mind that any of those who were indicted are presumed innocent until proven guilty beyond a reasonable doubt. And, those found guilty may still have the option to appeal their conviction.

Healthcare fraud continues to run rampant across the country. That’s why the federal government has made it a priority and will continue to aggressively pursue violators. The Health Law Offices of Anthony C. Vitale can help you before you become the focus of an investigation and will aggressively defend you should you become the target of one. Give us a call at 305-358-4500 or send an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.

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The Health Law Offices of Anthony C. Vitale