DOJ ANNOUNCES ADMINISTRATOR, BILLER CONVICTED IN $4.5 MILLION MEDICARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT
Monday, May 18, 2015
Administrator and Biller of Illinois Physician Group Convicted in $4.5 Million Medicare Fraud Scheme

A federal jury in Chicago on May 15, 2015, convicted the administrator and biller of a Schaumburg, Illinois, in-home visiting physician group for their participation in a $4.5 million health care fraud scheme that included billing Medicare for services rendered to patients who were dead and services rendered by medical professionals who worked over 24 hours in a day.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Special Agent in Charge Robert J. Holley of the FBI’s Chicago Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.

According to evidence presented at trial, Rick E. Brown, 58, of Rockford, Illinois, the President of Home Care America Inc., controlled the daily operations of a physician practice, Medicall Physicians Group Ltd.  Mary C. Talaga, 54, of Elmwood Park, Illinois, was the company’s biller who submitted Medicall’s Medicare claims and was employed by Home Care America.  Brown and Talaga falsely billed Medicare for services that were never provided to patients.  The services fraudulently billed included services rendered to patients who were actually dead, as well as services purportedly provided by medical professionals after they had ended their employment and by medical professionals who worked over 24 hours per day.  Evidence showed that Brown forged physician signatures on medical documents, and Talaga directed physicians to create false documentation after she had billed for services that had not been documented or provided.

Brown and Talaga were each found guilty of one count of conspiracy to commit health care fraud, six counts of health care fraud and three counts of false statements relating to a health care matter.  They were charged in a superseding indictment returned on March 25, 2015.  Medicall submitted approximately $12 million in claims to Medicare, approximately $4.5 million of which were shown to be fraudulent at trial.

The sentencing hearing for Brown is scheduled for Aug. 10, 2015, and the sentencing hearing for Talaga is scheduled for Aug. 7, 2015.

The investigation was conducted jointly by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Northern District of Illinois.  The case is being prosecuted by Trial Attorney Brooke Harper and Senior Trial Attorney Jon Juenger of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

HOSPITAL SYSTEM, PHYSICIAN GROUP SETTLE FALSE CLAIMS LAWSUIT FOR $24.5 MILLION

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, July 21, 2014

Alabama Hospital System and Physician Group Agree to Pay $24.5 Million to Settle Lawsuit Alleging False Claims for Illegal Medicare Referrals

Mobile, Alabama-based Infirmary Health System Inc. (IHS), two IHS-affiliated clinics and Diagnostic Physicians Group P.C. (DPG) have agreed to pay the United States $24.5 million to resolve a lawsuit alleging that they violated the False Claims Act by paying or receiving financial inducements in connection with claims to the Medicare program, the Justice Department announced today.

“Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patients’ needs,” said Assistant Attorney General for the Civil Division Stuart F. Delery.  “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health programs.”

The government’s suit alleged that two IHS affiliated clinics -- IMC-Diagnostic and Medical Clinic, in Mobile, and IMC-Northside Clinic, in Saraland, Alabama -- had agreements with DPG to pay the group a percentage of Medicare payments for tests and procedures referred by DPG physicians, in violation of the Physician Self-Referral Law (commonly known as the Stark Law) and the Anti-Kickback Statute.  Also named in the lawsuit was Infirmary Medical Clinics P.C. (IMC), an affiliate of IHS that directly owns and operates approximately 30 clinics in the Mobile area, including the two clinics involved in this lawsuit.

The Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives.  The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare.  The Stark Law forbids a hospital or clinic from billing Medicare for certain services referred by physicians who have a financial relationship with the entity.

According to the government’s complaint, in 1988, IMC purchased IMC-Diagnostic and Medical Clinic from DPG and agreed to pay DPG a share of the revenues the clinics collected, including Medicare revenues from diagnostic imaging and laboratory tests.  After IMC acquired the IMC-Northside Clinic in 2008, the physicians practicing there joined DPG and entered into an agreement with the same key terms as the earlier agreement with IMC-Diagnostic and Medical Clinic.  The government contended that these payments were illegal kickbacks and constituted a prohibited financial relationship under the Stark Law, and that in June 2010, an attorney for DPG warned employees of both IMC and DPG that the compensation being paid to the physicians likely violated the law.  Nevertheless, the agreements allegedly were neither modified nor terminated for another 18 months.

The lawsuit was originally filed by Dr. Christian Heesch, a physician formerly employed by DPG, under the whistleblower provisions of the False Claims Act.  Those provisions authorize private parties to sue on behalf of the United States and to receive a portion of any recovery.  The act permits the United States to intervene and take over the lawsuit, as it did in this case with respect to some of Dr. Heesch’s allegations.  Dr. Heesch will receive $4.41 million as his share of the settlement.

“Today’s settlement represents a single but significant step towards achieving integrity in the administration of public health programs in this region,” said U.S. Attorney Kenyen Brown for the Southern District of Alabama.  “Physicians, physician groups and other medical entities operating illegally within public health programs will be held accountable.  I also commend whistle blowers like Dr. Christian Heesch, who helped bring this particular case to light.”

As part of the settlement announced today, the settling defendants have also agreed to enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), which obligates the defendants to undertake substantial internal compliance reforms and to submit its federal health care program claims to independent review for the next five years.

“Patients must know that medical advice is based on best practices, not on their provider’s bottom line,” said HHS-OIG Special Agent in Charge Derrick L. Jackson.  “We are pleased these allegations are resolved and will continue to work with the U.S. Department of Justice to investigate and pursue illegal, wasteful business arrangements.”

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $20.2 billion through False Claims Act cases, with more than $14 billion of that amount recovered in cases involving fraud against federal health care programs.

The investigation and litigation were conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Alabama, HHS-OIG and the FBI.  The claims settled by this agreement are allegations only, and there has been no determination of liability.

The case is captioned U.S. ex rel. Heesch v. Diagnostic Physicians Group, P.C. et al., Civil Action No. 11-0364-KD-B (S.D. Ala.).

HEALTH CARE ORG. & HOSPITAL TO PAY $3.85 MILLION FOR PROVIDING KICKBACKS FOR DOCTOR REFERRALS

FROM:  U.S. JUSTICE DEPARTMENT FINANCIAL 
Tuesday, December 31, 2013
Colorado Health Care Organization and One of Its Montana Hospitals to Pay $3.85 Million for Allegedly Providing Financial Benefits to Referring Physicians and Physician Groups

St. James Healthcare (St. James), a hospital located in Butte, Mont., and its parent company, Sisters of Charity of Leavenworth Health System (Sisters of Charity), a health care organization based in Denver, Colo., have agreed to pay $3.85 million to resolve allegations that they violated the Anti-Kickback Statute, the Stark Law and the False Claims Act by improperly providing financial benefits to physicians and physician groups that made referrals to the hospital, the Justice Department announced today.

The Anti-Kickback Statute prohibits the provision of remuneration with the intent to induce referrals of government health care program business.  The Stark Law restricts financial relationships that hospitals may enter into with physicians who refer patients to them.  Federal law prohibits payment by federal health care programs of medical claims that result from arrangements that violate the Anti-Kickback Statute or the Stark Law.

“Improper financial arrangements between hospitals and physicians not only undermine the integrity of the decisions that doctors make, they raise the cost of health care for all of us,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The department has longstanding concerns about such conduct and is committed to working with health care providers that come forward to disclose their misconduct.”

The settlement announced today resolves allegations that St. James and Sisters of Charity provided various improper financial incentives to physicians and physician groups that were involved in a joint venture with St. James to own and operate a medical office building on the St. James campus.  These incentives included a payment to the joint venture that increased the share values for the physicians and physician groups in the joint venture and resulted in below fair market value lease rates for the physicians renting space in the medical office building.  Additional incentives provided by St. James and Sisters of Charity included below fair market value lease rates for the land upon which the medical office building was constructed and other below fair market value arrangements related to shared facilities, use and maintenance.  These issues were disclosed by St. James and Sisters of Charity to the government.

“This matter is of great significance to Montanans because it helps ensure federal health care programs deliver services in a cost-effective and efficient manner,” said U.S. Attorney for the District of Montana Michael W. Cotter.  “We are encouraged that hospitals like St. James Healthcare are taking these issues seriously by reviewing their operations and making disclosures to the government where necessary.”

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius.  The partnership between the two departments has focused on efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

This case was handled by the U.S. Attorney’s Office for the District of Montana, the Department of Justice Civil Division, Commercial Litigation Branch and the Department of Health and Human Services Office of Inspector General.  The claims settled by this agreement are allegations only, and there has been no determination of liability.