By Sonal Patel BA, CPMA, CPC, CMC, ICDCM SP Collaborative |
Monthly Spotlight on Fraud, Waste, and Abuse


Monthly Spotlight on Fraud, Waste, and Abuse

Date Posted: Wednesday, January 24, 2024


The following cases highlight fraud, waste, and abuse (FWA) and serve as a reminder to uphold high ethical standards when providing patient care and services.


Owner of Indian Marketing Company Admits Role in $11.5 Million Healthcare Fraud and Kickback Scheme


Early November saw a case involving the owner of a marketing company located in India who admitted his role in conspiracies to commit healthcare fraud and to pay and receive illegal kickbacks.


The man pleaded guilty in a New Jersey federal court to information charging him with conspiracy to violate the federal Anti-Kickback Statute and conspiracy to commit healthcare fraud. According to documents filed in this case and statements made in court, from February 2017 to May 2022, he participated in a kickback and bribery scheme with orthotic brace supply companies, telemedicine companies, and testing laboratories, resulting in the submission of false and fraudulent claims to Medicare. He controlled a marketing company in India through which he and his co-conspirators identified Medicare beneficiaries to target for orthotic braces and cancer genetic tests (CGX). Employees of the company called beneficiaries and pressured them to agree to accept orthotic braces and/or CGX, regardless of medical necessity.


He and his company paid kickbacks to telemedicine companies to obtain doctor's orders for the orthotic braces and CGX tests. He then steered the doctor's orders to orthotic brace suppliers and testing laboratories located in the U.S., with which he and his company had additional kickback arrangements. The orthotic brace suppliers and laboratories submitted claims for reimbursement to Medicare, and thereafter sent a portion of the proceeds to him and his company as payment for the doctor's orders generated through the conspiracy.


In total, he and his co-conspirators caused a loss to Medicare of more than $11.5 million.


The conspiracy to commit healthcare fraud count is punishable by a maximum of ten years in prison and the conspiracy to pay illegal kickbacks is punishable by a maximum of five years in prison. Both counts are also punishable by a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for March 2024.


Read the specifics of this case at www.justice.gov.


Georgia Doctor Pays $225,000 to Resolve Allegations for Improper Billing


Here, the doctor and her practice group have agreed to pay $225,000 to resolve allegations that they violated the False Claims Act by, among other things, billing the government for office visits that were not medically necessary, were not provided as claimed, and were not supported by patient medical records.


This settlement resolves allegations that from January 2, 2018, to February 12, 2021, the doctor knowingly submitted false claims to federal healthcare programs for office visits that were not as complex or lengthy as the doctor purported. This is a practice commonly known as "upcoding." The government also alleged that she submitted claims of certain office visits to federal healthcare programs as though she had personally provided the service, even though she was traveling out of the country at the time these services were allegedly performed.


The settlement also resolves allegations in a lawsuit filed by two former employees, under the qui tam, or whistleblower, provisions of the False Claims Act. The False Claims Act authorizes private parties to sue for false claims on behalf of the United States and share in the recovery.


The claims resolved by the settlement are allegations only, and there has been no determination of liability.


Read more about this case at www.justice.gov.


Second Owner of California Sleep Clinic Pleads Guilty to Submitting Over $1.5 Million in Fraudulent Claims to Medicare and Medi-Cal for Sleep Studies


Early November also saw a brother who co-owned and co-operated a California entity, which operated sleep clinics in multiple counties in California. Sleep clinics perform diagnostic sleep studies to identify disorders like sleep apnea and narcolepsy.


According to court documents, between August 2016 and July 2020, he allegedly caused the entity to submit thousands of claims to Medicare and Medi-Cal for sleep studies that were not actually performed on patients. The claims also stated falsely that the patients had been referred for the sleep studies by physicians with whom he had previously worked. This was done because Medicare and Medi-Cal will not pay for a sleep study unless the patient was referred by a physician.


He faces a maximum statutory penalty of ten years in prison for the healthcare fraud conviction and an additional, mandatory two years in prison for the identity theft conviction. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.


In September 2023, his brother pleaded guilty to similar healthcare fraud and aggravated identity theft charges related to other sleep clinics in another California location.

Read further information about this case at www.justice.gov.


Attorney General Announces Guilty Verdict of Physician Who Subjected Patients to Unnecessary and Invasive Tests


Late November saw a case involving a doctor and his company who were found guilty on charges related to running a kickback scheme that defrauded Medicaid and subjected patients to invasive procedures they did not need.


In August 2022, the Office of the Attorney General (OAG) indicted the doctor, and in late November 2023, he was found guilty of grand larceny in the third degree, healthcare fraud in the third degree, four of eight counts of falsifying business records in the first degree, and two counts of violating the statute prohibiting the payment of kickbacks, all felony charges.


Details include that from January 2006 to August 2017, the doctor ran a kickback scheme in which he gave gift cards and cash to two physicians in exchange for the physicians' referral of patients. In addition, from January 2014 to August 2017, he directed his employees to add additional, unordered radiological procedures to orders submitted by referring physicians to increase the amount of money received from Medicaid.


He defrauded Medicaid and subjected patients to medically unnecessary and often invasive radiological testing without the direction, consent, or approval of the referring physicians responsible for the underlying care of those patients. The additional tests included MRIs of the brain, cervical spine, and lumbar spine, all "with contrast," which required subjecting patients to unnecessary and invasive injections. He then directed his staff to submit claims for payment to Medicaid for those medically unnecessary tests.


Read additional details of this case at www.justice.gov.


Sonal Patel, BA, CPMA, CPC, CMC, ICDCM, is founder, CEO, and Principal Strategist at SP Collaborative, LLC. SP Collaborative, LLC was founded by Sonal Patel, BA, CPMA, CPC, CMC, ICDCM. Sonal utilizes her unique background and education in the humanities, fine art, and art history to complement her partnerships with her clients in healthcare.


SP Collaborative believes in the voices of all its partners and strives to maintain mutually beneficial relationships.



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