Health Care Fraud

March 9, 2016

HOW LOW CAN YOU GO

“HOW LOW CAN YOU GO”

Just when you think fraudsters can’t reach a new low, you read about Michael Mann, the owner of Seattle-based Wheelchairs Plus. Mr. Mann has been ordered to pay $2.7 million for fraudulently billing the Medicaid program for 119 new wheelchairs. Unfortunately, what Mann delivered were actually used wheelchairs purchased from nursing homes or off of websites such as Craigslist. Mann would actually go so far as creating a new serial number after cobbling together rebuilt chairs from various sources.

Mann applied the serial numbers because Medicaid will not pay for a used or rebuilt chair, but, rather, will only reimburse for a “new” chair. In fact, Medicaid would pay several thousand dollars for a “new chair” when the chairs would only cost a couple of hundred dollars to rebuild used.

October 25, 2013

JACKSON NEVER LOOKED SO COOL!

by Michael D. Fitzgerald

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August 9, 2013

LONG-TERM ACUTE CARE HOSPITAL RESOLVES FALSE CLAIMS ALLEGATIONS

by Michael D. Fitzgerald

On July 26, 2013, the Department of Justice announced the settlement with Dubuis Health System. Dubuis operates long-term acute care hospitals in a number of states located in the Southern East and South Western United States. The health system does not operate any facilities in the state of New Jersey.

A former Administrator at Southern Crescent (part of the health system) alleged that the health system kept patients hospitalized beyond what should have been considered “medically necessary”. The health system did this for two reasons; the system would receive a higher rate of Medicare reimbursement and, the health system could maintain its classification as a long-term acute care facility.

It was alleged that the fraud occurred between 2003 and 2009. It is not known whether or not there were allegations before or after these dates of fraud.

The health system agreed to pay $8 million to resolve the allegations. The whistleblower will receive a little more than $2.1 million of the recovery by the United States government.

Healthcare fraud, including long-term acute care facilities, nursing homes, and hospice has been a hot topic over the last number of years. The False Claims Act, a federal statute, has provided a vehicle for the federal government to become aware of the fraud. Very often, the fraud is not known to the federal government and is brought to the attention of the Department of Justice by an individual. The individual can be an employee, a competitor, or, in some cases, a patient. The individual that brings the fraud to the attention of the federal government is called a “relator”. The False Claims Act provides for the relator to receive an award based upon the success of the case. The False Claims Act is very particular and has significant requirements including the need for the information to not have been public and the relator must be the first person to bring the information to the attention of the federal government. For this reason, relators often seek the services of a whistleblower lawyer with experience in the area. The False Claims Act provides for an award of between 15% and 30% of the amount recovered by the federal government.

Although this healthcare system did not maintain facilities in the state of New Jersey, if New Jersey had paid any of the bills which were improper, there would have been a recovery for the state of New Jersey as well. This is due to the fact that the state of New Jersey passed a False Claims Act in 2008. The New Jersey False Claims Act, very similar to the Federal False Claims Act, provides for a vehicle to report fraud against the state of New Jersey or state authorities.
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December 30, 2012

Nycomed Settles Drug “Stretching” Case

by Michael D. Fitzgerald

Just before year-end, GE healthcare agreed to pay $30 million to the United States Department of Justice. The case was filed by a salesman in Michigan. James Wagel alleged that a company owned by GE healthcare marketed a diagnostic drug used in cardiology testing improperly. The drug involved in the case is named Myoview.

The case is very interesting in that GE healthcare acquired Nycomed Amersham. Nycomed, a New Jersey company, allegedly told doctors how to “stretch” the drug. The drug enables doctors to see blood flow in a patient’s heart and helps the doctor detect coronary heart disease. Some doctors were using less than the total amount of the solution during the diagnostic procedure. By using less than the total amount of the solution, the doctors were able to “stretch” the number of procedures completed with the same amount of solution. The doctors then charge Medicare for the procedure.

Unfortunately, the diluted product sometimes resulted in false positives during cardiology testing and exposed the patient to additional and unnecessary testing.

August 25, 2012

Drug Provider Omnicare Hit Again with Whistleblower Claim

by Michael D. Fitzgerald

It seems that some companies never learn when it comes to false claims against the United States government. Omnicare is in the business of providing prescription drugs to elderly patients, and, has a particular pedigree in supplying nursing homes. Omnicare operates in at least 16 states, and, has 2 locations in New Jersey.

In 2010 Omnicare paid nearly $100 million to settle a whistleblower and kickback lawsuit. According to a recently filed lawsuit in The Federal Court, Omnicare has developed a new way to overcharge the United States and individual state governments.

A whistleblower, Peter Ordeanu, alleges that while working for the company or its predecessors, he learned that Omnicare regularly inflated the amount of money billed for dispensing drugs. The fraud involved Omnicare changing the National Drug Code number (“NDC” number) on the drug dispensed to the patient. By changing the NDC number the actual name or type of the drug dispensed was masked. The whistleblower claims that by changing the label, the US and state governments were overcharged by millions of dollars.

October 17, 2011

Making the Doctor Connection in Off- Label Drug Prescriptons

by Michael D. Fitzgerald

A number of recent cases have shown that the drug companies are prepared to pay millions and, sometimes, billions of dollars to settle cases involving prescribing drugs for unapproved uses. These “Qui Tam” matters are brought by individuals who have learned information that is not otherwise available to the Federal Government. New Jersey has a similar “Whistleblower Law” technically referred to as the “False Claims Act“.

Of interest in the recent cases with settlements is the fact that there has been no real action taken against the doctors who may be the worst offenders in prescribing the drugs. According to ProPublica, statistics show that 15 drug and medical device companies have paid $6.5 billion since 2008 to settle accusations of either marketing fraud or payment of kickbacks. In the various suits, approximately 75 doctors were named as being involved but none of the doctors were sanctioned in any way.

Drug maker Eli Lilly pleaded guilty to illegally marketing an anti-psychotic drug “Zyprexa”. Eli Lilly paid $1.4 billion in criminal penalties and settlements in the various civil lawsuits. Interestingly, one doctor, psychiatrist George Jerusalem, prescribed more than $1 million a year worth of Zyprexa. Dr. Jerusalem was a consulting psychiatrist to more than 100 nursing homes and was treating between 3,000 and 5,000 residents. Among other allegations, it was alleged that Eli Lilly had paid Dr. Jerusalem in excess of $50,000.00 in “consulting fees”.
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September 28, 2011

New Jersey Doctor Fraud

by Michael D. Fitzgerald

NEW JERSEY DOCTOR PLEADS GUILTY TO HEALTH CARE FRAUD

Only in New Jersey can you have a doctor bill nearly a million dollars in charges to Medicare and Medicaid in less than eighteen months. It is obviously very difficult to bill those kinds of numbers working alone; however, Dr. Yousuf Masood and his wife came up with a plan to produce these kinds of numbers. Dr. Masood hired three medical school graduates who had failed to pass the required test to become licensed to practice medicine in New Jersey. In court, the Masoods admitted they knew that the three they had hired were not licensed to practice medicine in New Jersey. To add insult to injury, it was learned that two of the three individuals hired by Dr. Masood were found through Craig’s List.

On April 21, 2011, both husband and wife pled guilty in Federal Court to one count each of conspiracy to commit healthcare fraud according to the U.S. Attorney for the District of New Jersey. As part of the guilty plea, Dr. Masood indicated that he had billed Medicare and Medicaid for more than 20,000 patient visits. The doctor claimed that he had performed the patient exams, when in fact the exams were completed by the three unlicensed physicians. During 2009, Dr. Masood was the top Medicaid prescribing doctor in the state of New Jersey. Interestingly, his prescriptions exceeded nine million dollars in one year. The second highest drug-prescribing doctor in the state of New Jersey did not reach six million dollars in prescriptions during that same year.

September 1, 2011

Hospital Fraud Abounds

by Michael D. Fitzgerald

UPCODING AND OTHER HOSPITAL FRAUD

Over the past couple of weeks, the Federal Courts have passed on a spate of fraud allegations against hospitals. In the past, New Jersey hospitals have been hit with similar claims and, in fact, some New Jersey hospitals have settled with the Federal Government for these allegations of fraud. The claims allege what amounts to improper or inflated billing practices. The terms of art for inflated billing is “upcoding”. Upcoding is basically where the hospital bills for a procedure which may have been more intricate and provides for a larger reimbursement from the Federal Government. The “upcoding” refers to a different billing “code” that the Federal Government assigns to certain procedures. By submitting a claim for a more difficult or intricate procedure, the hospital is reimbursed a larger amount of money. Although there are variants on this upcoding issue, a qualified fraud attorney can explain the intricacies.

“Upcoding” can occur in hospitals as well as physician’s offices, nursing homes or, for that matter, dental offices and counselors’ offices. The upcoding can come in the form of billing for a more difficult procedure but it can also come in the form of billing for a longer procedure. For example, a false claim was brought against a counselor for billing for one-hour sessions when in fact the sessions were only lasting 45 minutes. After the fraud was reported, the investigators engaged in some simple math. The accumulation of the hours billed by the professional far exceeded that which was possible.

April 5, 2011

How Will the Compendium of Unimplemented Recommendations affect New Jersey?

by Michael D. Fitzgerald

What the heck is a Compendium, and better yet, what the heck is the Compendium of Unimplemented Recommendations? AND how could it be used in New Jersey?

In March, 2011, the Department of Health and Human Services, Office of the Inspector General (OIG) issued its “Compendium of Unimplemented Recommendations”. On first blush, it is hard to imagine that any entity called the “Office of Inspector General” would issue a publication which outlines ways to save money or improve the programs that were not undertaken. However, a deeper analysis is necessary. The compendium outlines the implementation of cost savings or improvements which require either legislative, regulatory or administration action and, in some cases, more than one of the three actions are necessary.

The compendium covers Medicare, Medicaid and Public Health and Human Services as different parts of the compendium. The compendium, in the opening pages, makes a number of “priority recommendations.” The priority recommendations vary from non-monetary recommendations to suggestions that have estimated savings exceeding $3 billion. The recommendations also provide ideas for the Food and Drug Administration, the National Institutes of Health, the Indian Health Service, Medicaid and other federal entities.