Date Posted: Tuesday, May 21, 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.

 

Oncology Practice, Physicians, and Reference Laboratory to Pay Over $4 Million to Settle False Claims Act Allegations

 

April saw an oncology practice, physicians, and a reference laboratory agreeing to pay over $4 million to settle False Claims Act allegations.

 

The oncology practice and its affiliated physicians have agreed to pay $1.3 million, and the reference laboratory has agreed to pay $2,746,275.22 plus accrued interest, in civil settlements with the United States and the State of Texas to resolve alleged violations of the False Claims Act.

 

The United States alleged that the hematology and oncology practice entered an unlawful kickback arrangement with San Antonio, TX-based diagnostic reference laboratory, in August 2016. The laboratory provided in-office bone marrow biopsy services at the oncology practice locations and allegedly performed subsequent diagnostic testing on the biopsies. According to the United States, the laboratory agreed to pay $115 for each biopsy referred by the oncology practice and its physicians. The payments for each referred biopsy were paid to the private practice entities of three oncology practice physicians.

 

The United States contended that the payments for referrals of biopsies constituted kickbacks within the meaning of the Anti-Kickback Statute and that the terms of the written agreement between the oncology practice and the laboratory failed to meet any statutory safe harbor. The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by a federal healthcare program, such as Medicare, Medicaid, or TRICARE. Claims submitted in violation of the Anti-Kickback Statute may give rise to liability under the False Claims Act.

 

The civil settlement with the oncology practice and its physicians also resolves allegations that one specific female physician, through the oncology practice and her own oncology and hematology practice entity, provided medically unnecessary tests, services, and treatments to Medicare, TRICARE, and Texas Medicaid beneficiaries in the San Antonio Metro Area, and billed the federal healthcare programs for the medically unnecessary tests, services, and treatments.

 

She and her practice entity also entered a three-year Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).

The civil settlement with the oncology practice and its physicians also resolves claims brought under the qui tam, or whistleblower, provisions of the False Claims Act by a physician formerly employed by the female oncologist. The qui tam provisions of the False Claims Act permit private parties to file an action on behalf of the United States and receive a share of any recovery.

 

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

 

Source: Oncology Practice, Physicians, and Reference Laboratory to Pay Over $4 Million to Settle False Claims Act Allegations. (2024, April 2). www.justice.gov.

 

Owner of Telemedicine Companies Pleads Guilty to $110 Million Medicare Fraud Scheme

 

The owner of media and management companies pleaded guilty in connection with a $110 million telemedicine fraud scheme involving medically unnecessary durable medical equipment (DME), including orthotics such as back and knee braces.

 

He pleaded guilty to one count of conspiracy to commit healthcare fraud. The judge on the case scheduled sentencing for July 18, 2024.

 

Between March 2016 and January 2023, through his companies, he entered into business relationships with telemarketing companies that generated leads by targeting Medicare beneficiaries. The telemarketers then paid his media and management companies on a per-order basis to generate orders for DME for these beneficiaries. To arrange for these orders to be signed, he worked with medical staffing companies—including one in Massachusetts—to find doctors and nurses who were willing to review and sign prepopulated orders, typically without any contact with the beneficiaries. The records falsely portrayed the medical providers as having performed a legitimate examination of the beneficiary. He then provided the signed orders to the telemarketing companies, which sold the orders to DME suppliers. He knew that these DME suppliers would use the signed orders to submit claims to Medicare for DME that were medically unnecessary, based on false documentation and tainted by kickbacks.

 

The charge of conspiracy to commit healthcare fraud provides for a sentence of up to 10 years in prison, supervised release for up to three years, and a fine of up to $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes that govern the determination of a sentence in a criminal case.

 

Source: Owner of Telemedicine Companies Pleads Guilty to $110 Million Medicare Fraud Scheme. (2024, April 4). www.justice.gov.

 

Telemedicine Nurse Practitioner Sentenced for $7.8 Million Durable Medical Equipment Fraud Scheme

 

A Virginia-based nurse practitioner was sentenced in federal court in Boston in connection with a $7.8 million telemedicine fraud scheme involving medically unnecessary durable medical equipment (DME), including orthotics such as back and knee braces.

 

She was sentenced by the judge on the case to 18 months in prison followed by two years of supervised release, with the first year to be served in home confinement. She was also ordered to pay $3,952,761 in restitution. In November 2023, she pleaded guilty to one count of conspiracy to commit healthcare fraud.

 

Between December 2018 and April 2020, the nurse practitioner worked with a purported telemedicine company to sign orders for medically unnecessary DME. These DME orders were pre-populated by telemarketing companies that called Medicare beneficiaries to solicit their information. Through DocuSign, she signed these DME orders even though she did not have any contact with the beneficiaries and did not have a provider-patient relationship with them. Often, she signed these DME orders without reading them. For instance, one packet was 16 pages long and contained multiple orders for orthotics. She electronically signed her name 12 times and completed the orders in approximately 32 seconds. The second packet was 37 pages long and contained multiple orders for orthotics. She electronically signed her name 24 times and completed the orders in approximately 45 seconds. Once she signed these orders, the telemarketing company sold them to DME suppliers, which then submitted claims to Medicare. As a result of her participation in this conspiracy, over $7.8 million in claims were submitted to Medicare for DME that were medically unnecessary, based on false documentation and tainted by kickbacks.

 

Source: Telemedicine Nurse Practitioner Sentenced for $7.8 Million Durable Medical Equipment Fraud Scheme. (2024, April 11). www.justice.gov .

 

Two Doctors Sentenced for $4M Fraudulent Urine Drug Testing Scheme

 

The owner and the medical director of a Kentucky pain clinic were sentenced for their respective roles in a scheme that defrauded Medicare, Medicaid, and commercial insurance companies of over $4 million for medically unnecessary urine drug testing.

The clinic's medical director was sentenced to one year and six months in prison and ordered to pay $1,968,763.10 in restitution. The other man, the clinic owner and a licensed chiropractor, was sentenced to two years and six months in prison and ordered to pay $3,773,569.30 in restitution.

 

According to court documents and evidence presented at trial, the pair orchestrated a scheme in which clinic staff billed for urine drug tests that were not medically necessary but were lucratively reimbursed by taxpayer-funded insurance providers like Medicare and Medicaid. The men continued in their scheme even as their expensive drug testing machine malfunctioned because it was not properly maintained, which caused the machine to produce results that falsely suggested patients were testing positive for street drugs like ecstasy or heroin. Insurance proceeds from urine drug testing ended up comprising three-quarters of the clinic's revenue.

 

On March 23, 2023, a federal jury convicted the medical director of healthcare fraud, and the owner of healthcare fraud and conspiracy to commit healthcare fraud.

 

Source: Two Doctors Sentenced for $4M Fraudulent Urine Drug Testing Scheme. (2024, April 12). www.justice.gov.

 

False Claims Act Complaint Filed Against Regeneron Pharmaceuticals for Fraudulent Drug Pricing Reporting

 

The United States filed a complaint under the False Claims Act (FCA) against Regeneron Pharmaceuticals Inc. (Regeneron), a New York-based pharmaceutical company. Regeneron manufactures and sells Eylea, an anti-vascular endothelial growth factor inhibitor approved by the Food and Drug Administration to treat, among other conditions, neovascular (Wet) Age-Related Macular Degeneration (Wet AMD), a prevalent, usually age-related condition that impairs vision. Eylea is a leading Medicare expense, with payments of more than $25 billion between 2012 and 2023.

 

The complaint alleges that Regeneron fraudulently inflated Medicare reimbursement rates for Eylea by knowingly submitting false average sales price reports to the Centers for Medicare and Medicaid Services that excluded certain price concessions. In particular, the United States alleges that Regeneron knowingly failed to report price concessions in the form of credit card processing fees that Regeneron paid to specialty drug distributors to benefit its customers. According to the complaint, Regeneron paid these credit card fees so that distributors would accept credit cards for Eylea purchases while still charging a lower, cash price for the drug, and so that Regeneron's customers—typically retina and ophthalmic practices—could receive credit card benefits for their purchases, such as “cash back” and other credit card rewards. The United States alleges Regeneron internally attempted to disguise the payments as “bona fide service fees” (BFSFs), which are not considered price concessions, when it knew the payments were not BFSFs.

 

“The government alleges that Regeneron manipulated Medicare's drug pricing process, by knowingly failing to report its payment of credit card processing fees as price concessions to its customers,” said an Acting U.S. Attorney for the District of Massachusetts. He continues, “By doing so, Regeneron greatly inflated the costs of its drug to Medicare over many years and enhanced its revenues. Falsely reported average sales prices cost the Medicare system hundreds of millions of dollars and we will make every effort to prevent such practices.”

 

The lawsuit was originally filed under the qui tam or whistleblower provisions of the FCA. Under the FCA, private parties file an action on behalf of the United States and receive a portion of the recovery. The FCA permits the United States to intervene in and take over the action, as it has done here. If a defendant is found liable for violating the FCA, the United States may recover three times the amount of its losses plus applicable penalties.

 

The claims asserted in the complaint are allegations only. There has been no determination of liability.

 

Source: False Claims Act Complaint Filed Against Regeneron Pharmaceuticals for Fraudulent Drug Pricing Reporting. (2024, April 10). www.justice.gov.

 

Sonal Patel, BA, CPMA, CPC, CMC, ICDCM, is CEO and Principal Strategist at SP Collaborative, LLC.

 

Sonal has over 13 years of experience understanding the art of business medicine. She is a nationally recognized thought-leader, speaker, author, creator, and consultant. As the CEO & Principal Strategist of SP Collaborative, LLC, she serves as a partner to healthcare organizations, medical practices, physicians, healthcare providers, vendors, consultants, medical coders, auditors and compliance professionals in working together to elevate coding compliance education for the business of medicine.

 

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