Freedom Mortgage Corporation Agrees to Pay $113 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage Lending

The Department of Justice announced today that Freedom Mortgage Corporation has agreed to pay the United States $113 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting single family mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements for the FHA insurance program.  Freedom Mortgage Corporation is headquartered in Mt. Laurel, New Jersey.

“It is imperative that mortgage lenders that participate in the FHA insurance program follow the rules and requirements set forth by HUD,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will continue to work with our partners at HUD, its Office of Inspector General, and U.S. Attorneys around the country to protect homeowners and taxpayers from those who knowingly seek to abuse the FHA program for their own gain.”

“Freedom Mortgage did not properly comply with FHA rules for the mortgages it was generating and did not adequately monitor early payment defaults,” said U.S. Attorney Paul J. Fishman for the District of New Jersey.  “It also failed to report to HUD the defaults it did discover, as required by its participation in the program.  Today’s settlement recognizes those failures and imposes an appropriate sanction.”

During the time period covered by the settlement, Freedom Mortgage Corporation participated as a direct endorsement lender (DEL) in the FHA insurance program.  A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance.  If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan.  Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance.  DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and endorsing mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices and to self-report any deficient loans identified by their quality control program.

The settlement announced today resolves allegations that Freedom Mortgage Corporation failed to comply with certain FHA origination, underwriting and quality control requirements.  As part of the settlement, Freedom Mortgage Corporation admitted to the following facts: Between Jan. 1, 2006 and Dec. 31, 2011, it certified mortgage loans for FHA insurance that did not meet HUD underwriting requirements and were therefore not eligible for FHA mortgage insurance.  Additionally, Freedom Mortgage Corporation did not adhere to FHA’s quality control (QC) requirements.  Between 2006 and 2008, Freedom Mortgage Corporation did not share its early payment default (EPD) QC reviews with production and underwriting management, nor did it require responses to its EPD QC findings from its production or underwriting staff.  Due to staffing limitations between 2008 and 2010, Freedom Mortgage Corporation did not always perform timely QC reviews or perform audits of all EPD loans, as required by HUD.  An EPD is a loan that becomes 60 days past due within the first six months of the loan.  The EPD QC reviews that Freedom Mortgage Corporation did perform revealed high defect rates, exceeding 30 percent between 2008 and 2010.  Yet, between 2006 and 2011, Freedom Mortgage Corporation did not report a single improperly originated loan to HUD, despite its obligation to do so.  Additionally, in 2012, after identifying hundreds of loans that “possibly should have been self-reported to HUD,” it reported only one.  As a result of Freedom Mortgage Corporation’s conduct, HUD insured hundreds of loans that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured and subsequently incurred substantial losses when it paid insurance claims on the ineligible loans approved by Freedom Mortgage Corporation.

“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and demonstrates HUD OIG’s continued efforts to combat fraud in the origination of single family mortgages insured by the FHA,” said HUD Inspector General David A. Montoya.

“FHA-approved lenders have a responsibility to comply with underwriting standards,” said HUD’s General Counsel Helen Kanovsky.  “We are gratified that Freedom Mortgage Corporation has accepted responsibility for its actions.”

The settlement was the result of a joint investigation conducted by HUD, HUD OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of New Jersey.

If you know of or suspect institutional mortgage fraud, contact us now.

Dermatology Physicians and Practice to Pay $1.9 Million to Settle False Claims Act Investigation into Overbilling Medicare for Evaluation and Management Services

The U.S. Attorney’s Office for the Northern District of Georgia announced today that it has reached a settlement with dermatologists Margaret Kopchick, M.D., and Russell Burken, M.D., and their practice group, Toccoa Clinic Medical Associates, who agreed collectively to pay $1.9 million to settle claims that they violated the False Claims Act by billing Medicare for evaluation and management (E&M) services that were not permitted by Medicare rules.

“Physicians and practice groups are expected to bill Medicare for the costs of the services they provide.  However, when they improperly bill for those services, it affects those who depend on Medicare by taking available dollars away from the program,” said U.S. Attorney John Horn.  “Those who inflate their Medicare billings can expect recovery of any overpayments, as well as significant penalties under the False Claims Act.”

“The improper billing of evaluation and management services cost the taxpayers millions of dollars each year and drain the Medicare Trust Fund,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) for the Atlanta region.  “The OIG and the U.S. Attorney’s Office will continue to hold health care providers like these responsible for improper claims.”

The civil settlement resolves the United States’ investigation into Drs. Burken and Kopchick’s billing for E&M services on the same day as a procedure. Providers are not permitted to bill both E&M services and a procedure on the same day under the Medicare program’s regulations unless a significant, separately identifiable service has been performed. In addition, where a significant, separately identifiable service has been performed, providers must bill the appropriate level of E&M service. More complex E&M services are reimbursed at higher rates. Here, the United States alleged that Drs. Burken and Kopchick billed for E&M services along with procedures where no significant and separately identifiable service was performed, and upcoded E&M services to higher levels than were appropriate, leading to overpayments by Medicare.

HHS-OIG has identified the inappropriate billing of E&M services as a national issue costing taxpayers billions of dollars.

This resolution is part of the government’s emphasis on combating health care fraud under the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by the Secretary of the Department of Health and Human Services in May 2009. 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 that effort is the False Claims Act. Since January 2009, the Justice Department recovered more than $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.

This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia and the U.S. Department of Health and Human Services, Office of Inspector General.

Assistant United States Attorney Emily Shingler reached the civil settlement.

The claims settled by the settlement agreement are allegations only; there has been no determination of liability.

If you know of or suspect health care fraud, contact us now.

Premiertox Pays United States And Tennessee $2.5 Million To Resolve False Claims Act Lawsuit

The United States Attorney for the Western District of Kentucky announced yesterday that PremierTox 2.0, Inc. has paid $2.5 million to resolve alleged violations of the False Claims Act.  PremierTox is a company that provides drug urine screening services to citizens of Kentucky and Tennessee.  The government alleged that PremierTox submitted false claims when billing Medicare, TennCare and Kentucky Medicaid for drug urine screening services. PremierTox previously did business in Tennessee under the name Nexus.

“Losses caused by health care fraud amount to tens of billions of dollars every year,” said U.S. Attorney John Kuhn, of the Western District of Kentucky. “Often those losses are passed along to consumers in the form of increased costs. For that reason, my office will work with federal, state, and local law enforcement to uncover these activities and recover every dollar.”

The settlement resolves the government’s allegations that PremierTox and Nexus submitted three types of false claims during the period of September 2011 through June 2014. During that period, PremierTox was under different, former ownership and management. The government alleged that PremierTox had a swapping arrangement, in which Nexus gave below cost discounts on its urine drug screen tests to patients in Tennessee without insurance, in exchange for physicians’ referring their patients with Medicare or TennCare coverage to Nexus.  The government also contended that, in Tennessee, Nexus submitted excessive claims to Medicare and TennCare for laboratory testing that was beyond what was medically reasonable and necessary.  In addition, the government claimed that, in Kentucky, PremierTox provided point of care testing cups to medical offices free of charge to induce those providers to use PremierTox’s services.

Under the settlement agreement, PremierTox paid a total of $2,500,000.  Of that amount, $2,125,000 covers the conduct in Tennessee, and $325,000 covers the conduct in Kentucky.  The United States will receive $1,757,300 under the settlement, and Tennessee will receive $325,200.

“Medically unnecessary lab tests and financial incentives from labs to doctors in exchange for referrals are costing the taxpayers millions of dollars,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “This settlement is one of many that are sending a strong message to the lab industry that they need to clean up their act.”

The allegations resolved by today’s settlement were originally raised in two lawsuits filed against PremierTox in Tennessee and Kentucky under the qui tam, or whistleblower provision of the False Claims Act.  This provision allows private citizens to bring civil suits on behalf of the government and to share in any recovery.

The lawsuit in Tennessee was filed by a former office manager of a pain clinic in Cookeville. The relator in this case will receive $361,250.  The relator who brought the lawsuit in Kentucky is the former CEO of PremierTox and will receive and $56,250.

The Tennessee lawsuit remains pending against several other defendants whom the United States and Tennessee allege violated the False Claims Act and the Tennessee Medicaid False Claims Act.

This case was investigated by the U.S. Department of Health & Human Services Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit.  The United States is represented in these cases by Assistant U.S. Attorneys Ellen Bowden McIntyre for the Middle District of Tennessee and Ben Schecter of the Western District of Kentucky.  The State of Tennessee is represented by Assistant Attorney General Phillip Bangle.

The two cases are docketed as United States ex rel. Norris v. Anderson, No. 3:12-cv-00035 (M.D. Tenn.) and United States ex rel. Duncan v. Nexus Lab, Inc., No. 1:14-cv-89-R (W.D. Ky.).  The claims settled by this agreement are allegations only, and there has been no determination of liability.

If you know of or suspect health care fraud, contact us now.

 

United States Settles False Claims Act Allegations Against 21st Century Oncology for $34.7 Million

The Department of Justice announced yesterday that 21st Century Oncology Inc., the nation’s largest physician led integrated cancer care provider and its wholly owned subsidiary South Florida Radiation Oncology LLC, have agreed to settle allegations that they performed and billed for procedures that were not medically necessary.  21st Century is headquartered in Fort Myers, Florida, and has offices in 16 states.

The settlement relates to defendants use of a medical procedure – called the Gamma function – to measure the exit dose of radiation from a patient after receiving radiation treatment.  The United States alleged that the defendants knowingly and improperly billed for this procedure under circumstances where the procedure served no medically appropriate purpose.  For example, the government alleged that the procedure was performed by physicians and physicists at 21st Century Oncology locations who were not properly trained to interpret and utilize the Gamma function results.  The government also alleged that the defendants billed for this procedure when no physician reviewed the Gamma function results until seven or more days after the last day patients received radiation treatment therapy.  Finally, the government alleged that the defendants billed for the procedure when no Gamma result was available due to technical failures in the imaging equipment.

“Today’s settlement demonstrates our unwavering commitment to protect the Medicare trust fund against unscrupulous providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Providers who waste taxpayer dollars by billing for unnecessary services, including services that are not used or improperly performed, will face serious consequences.”

“The U.S. Attorney’s Office is committed to taking the steps necessary to protect Medicare, TRICARE, and other federal health care programs from fraud,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida.  “Healthcare providers may bill for new technologies only when they have been proven to be useful and when individual physicians and staff have been trained to use them properly.”

This lawsuit was originally filed under the qui tam or whistleblower provisions of the False Claims Act by Joseph Ting, a former physicist at South Florida Radiation Oncology.  Under those provisions, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery.  Ting will receive more than $7 million.

“The waste of health care program dollars will not be tolerated,” said Special Agent in Charge Shimon R. Richmond for the Health and Human Services (HHS) Office of the Inspector General.  “Providers at 21st Century Oncology have agreed to settle claims that in some instances they performed tests that were not only medically unnecessary, but that no one had been trained to properly interpret, thereby allegedly causing the taxpayers to pay for useless tests.”

This past December, 21st Century Oncology LLC, a wholly owned subsidiary of 21st Century Oncology Inc., paid $19.75 million to settle allegations that it violated the False Claims Act by billing for medically unnecessary laboratory urine tests and for encouraging physicians to order these tests by offering bonuses based in part on the number of tests the physicians referred to its laboratory.

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 Secretary of Health and Human Services Kathleen Sebelius.  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 $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.

“This settlement highlights the commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of TRICARE, the Department of Defense health care program that serves our warfighters, their family members, and military retirees,” said Special Agent in Charge John F. Khin of DCIS Southeast Field Office.  “With DoD’s limited resources and budgets, DCIS must continue to aggressively investigate fraud, waste and abuse to preserve and recover precious taxpayer dollars for our most vulnerable programs.”

This matter was handled by the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the Civil Division’s Commercial Litigation Branch, the Department of Health and Human Services Office of Inspector General (HHS/OIG) and the Defense Criminal Investigative Service (DCIS).

The claims resolved by this settlement are allegations only, and there has been no determination of liability.  The lawsuit against the defendants was filed in the U.S. District Court for the Middle District of Florida and is captioned United States ex rel. Ting v. 21st Century Oncology and South Florida Radiation Oncology.

If you know of or suspect Medicare fraud, contact us now.

Former Owner of Florida Home Health Care Companies Agrees to Pay $1.75 Million to Resolve Kickback and False Claims Act Allegations

The Justice Department announced yesterday that Mark T. Conklin, the former owner, operator and sole shareholder of Recovery Home Care Inc. and Recovery Home Care Services Inc. (collectively RHC), has agreed to pay $1.75 million to resolve a lawsuit alleging that he violated the False Claims Act by causing RHC to pay illegal kickbacks to doctors who agreed to refer Medicare patients to RHC for home health care services.  Conklin sold the RHC companies to National Home Care Holdings LLC, on Oct. 9, 2012.

“Individuals who seek to increase their profits by providing physicians with illegal inducements will be held personally accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will continue to identify, investigate and, where appropriate, sue individuals and corporations that misuse funds meant to provide critical medical services for beneficiaries of federal health care programs.”

From 2009 through 2012, Conklin spearheaded a scheme whereby RHC, headquartered in West Palm Beach, Florida, allegedly paid dozens of physicians thousands of dollars per month to serve as sham medical directors who supposedly conducted quality reviews of RHC patient charts.  According to the government’s lawsuit, the physicians in many instances performed little or no work, but nevertheless received thousands of dollars from RHC.  The government’s complaint contended that these payments were, in fact, kickbacks intended to induce the physicians to refer their patients to RHC, in violation of the Anti-Kickback Statute and the Stark Law.

These laws 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 home health care provider from billing Medicare for certain services referred by physicians who have a financial relationship with the entity.   A person who knowingly submits, or causes the submission, to Medicare of claims that violate either the Anti-Kickback Statute or the Stark Law is also liable for treble damages and penalties under the False Claims Act.

“Inducements of the type at issue in this case are designed to improperly influence a physician’s independent medical judgment,” said U.S. Attorney A. Lee Bentley, III for the Middle District of Florida.  “This lawsuit and today’s settlement evidence our office’s ongoing efforts to safeguard federal health care program beneficiaries from the effects of such illegal conduct.”

“Home health agency owners who seek to boost profits by paying kickbacks to physicians in exchange for patient referrals will instead pay for their improper conduct at the settlement table,” said Special Agent in Charge Shimon R. Richmond of U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).  “We will continue to crack down on such illegal, wasteful kickback schemes, which can undermine impartial medical judgment and corrode the public’s trust in the health care system.”

The United States previously reached a settlement with RHC’s purchaser, National Home Care Holdings, on March 9, 2015, for $1.1 million.

The settlement with Conklin, which is subject to approval by the Bankruptcy Court for the Southern District of Florida, concludes a lawsuit originally filed by Gregory Simony, a former RHC employee, under the qui tam, or whistleblower,provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The act also allows the government to intervene and take over the action, as it did in part in this case.  Simony will receive up to $315,000 of the proceeds of the Conklin settlement.

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 $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorneys’ Offices for the Middle District of Florida and the Southern District of Florida and the HHS-OIG.

The case is captioned United States ex rel. Simony v. Recovery Home Care, et al., Case No. 8-12-cv-2495-T-36TBM (M.D. Fla.).  The claims resolved by the settlement are allegations only and there has been no determination of liability.

If you know of or suspect home health care fraud, contact us now.

Lockheed Martin Agrees To Pay $5 Million To Settle Alleged Violations Of The False Claims Act And The Resource Conservation And Recovery Act

The Department of Justice announced on Monday that Lockheed Martin Corporation and subsidiaries Lockheed Martin Energy Systems and Lockheed Martin Utility Services (collectively, Lockheed Martin) have agreed to pay the United States $5 million to resolve allegations that they violated the Resource Conservation and Recovery Act (RCRA) and, in misrepresenting their compliance with RCRA to the Department of Energy (DOE), knowingly submitted false claims for payment under their contracts with DOE to operate the Paducah Gaseous Diffusion Plant in Paducah, Kentucky, the Justice Department announced today.  Headquartered in Bethesda, Maryland, Lockheed Martin is a global security, aerospace, and information technology company that provides energy, environmental, and other services to government and commercial customers.

“We depend on the private sector to provide services critical to the government’s energy needs and to provide those services by means that are environmentally sound,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “As the settlement announced today demonstrates, the department will vigorously pursue all appropriate remedies to ensure that those who provide these vital services do so honestly and safely and in accordance with the law.”

“This settlement reflects our commitment to pursuing companies that violate the hazardous waste laws, and to securing a fair recovery of civil penalties for the people of the United States,” said Assistant Attorney General John Cruden, head of the Justice Department’s Environment and Natural Resources Division.  “The $1 million in RCRA civil penalties that the defendants are paying under this settlement is significant and is appropriate for the violations the United States has alleged.”

The government’s lawsuit alleged that Lockheed Martin violated RCRA, the statute that establishes how hazardous wastes must be managed, by failing to identify and report hazardous waste produced and stored at the facility, and failing to properly handle and dispose of the waste.  The government further alleged that this conduct resulted in false claims for payment under Lockheed Martin’s contracts with the Department of Energy.

Of the $5 million settlement amount, Lockheed Martin will pay $4 million to resolve the government’s False Claims Act allegations and its subsidiaries (Lockheed Martin Energy Systems and Lockheed Martin Utility Services) will each pay $500,000 – $1 million total – in RCRA civil penalties.

“Government contractors are required to follow the same federal laws that apply to everyone else,” said U.S. Attorney John E. Kuhn, Jr. for the Western District of Kentucky.  “These companies do not get a pass on compliance, especially when their responsibilities include managing and disposing of hazardous waste.  Today’s settlement should serve as a reminder that my office and the Department of Justice will pursue all credible allegations of false claims and of environmental regulatory violations.”

“Managing hazardous waste is important, and this case makes clear EPA’s commitment to upholding laws that protect communities where waste is disposed,” said EPA Regional Administrator Heather McTeer Toney of EPA Region 4, the Southeast region.

Lockheed Martin operated the Paducah Gaseous Diffusion Plant under contracts with the Department of Energy and a government corporation, the U.S. Enrichment Corporation, from 1984 to 1999.  During that time, Lockheed Martin was responsible for the facility’s uranium enrichment operations.  Enriching uranium increases the proportion of uranium atoms that can be used to produce nuclear fuel for weapons and civilian energy production.  As the name of the plant suggests, the process used was called “gaseous diffusion.”

In addition to uranium enrichment, Lockheed Martin was responsible for environmental restoration, waste management, and custodial care at the site, which occupies 3,500 acres in McCracken County, Kentucky.  Uranium enrichment operations ceased at the plant in 2013.  The government is working with other contractors to remediate contamination at and near the site consistent with the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

The settlement resolves two lawsuits filed under the qui tam, or whistleblower, provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.  The lawsuits were filed by the Natural Resources Defense Council, Inc. and several former employees of Lockheed Martin who worked at the Paducah facility.  The United States partially intervened in the lawsuits, which were then consolidated into one action.  The whistleblowers will collectively receive $920,000 from the United States’ portion of the settlement.

The case was a coordinated effort of the U.S. Attorney’s Office for the Western District of Kentucky, the Civil Division’s Commercial Litigation Branch, the Environment and Natural Resources Division’s Environmental Enforcement Section, the U.S. Environmental Protection Agency, the Department of Energy, and the Department of Energy Office of Inspector General.

The case is captioned United States, ex rel. John David Tillson, Natural Resources Defense Council, Inc., et al. v. Lockheed Martin Corp., et al., Civil Action No. 5:99CV00170-GNS (W.D. Ky.).  The claims resolved by this settlement are allegations only; there has been no determination of liability.

If you know of or suspect similar types of fraud, contact us now.

Government Files False Claims Act Case Against Physician

On Wednesday, U.S. Attorney Paul J. Fishman announced that the government has filed a complaint against a Union County, New Jersey, doctor and his medical practice companies for knowingly submitting millions of dollars in false claims to Medicare and Medicaid for thousands of diagnostic tests that were never performed and for physical therapy services performed by unqualified personnel.

The civil complaint, filed today in Newark federal court, charges Dr. Labib E. Riachi, 47, of Westfield, New Jersey, and two companies that he owns and operates, Riachi, Inc. and Center for Advanced Pelvic Surgery, LLC, both based in Westfield, with violating the False Claims Act, among other illegal conduct.

According to the complaint:

The defendants routinely billed Medicare and Medicaid for anorectal manometry, an invasive diagnostic test, and electromyography, another diagnostic test, even though most of the tests were never performed. In addition, the defendants submitted claims to Medicare for physical therapy services that should not have been paid because they were not performed by a qualified therapist. This scheme resulted in millions of dollars of reimbursement that would not have been paid but for the defendants’ misconduct.

If you know of or suspect Medicare fraud, contact us now.

Rose Radiology to pay almost $9 million to settle false billing allegations

Rose Radiology Centers Inc. will pay $8.71 million to the government to settle allegations that it violated the False Claims Act by billing federal health care programs for unnecessary radiology procedures.  The company has about a dozen offices in the Tampa Bay area. It’s also the “official” radiology practice for the Tampa Bay Rays and Tampa Bay Lightning.

The settlement resolves several allegations involving medical care standards, false billings and “breaches of trust,” according to a news release from the U.S. Attorney’s Office.

“There is no room for such practices in our public health care programs,” U.S. Attorney Lee Bentley said in the release.

The settlement deals with a lawsuit filed by two whistle-blowers under the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery.

The whistle-blowers will receive a combined $1.7 million as their share of the recovery in this case. Reached by phone, one of the whistle-blowers declined to comment Friday.

The lawsuit said Rose Radiology improperly billed for radiology procedures referred by chiropractors, which Medicare does not pay for.

To circumvent this prohibition, the release said, Rose Radiology accepted orders from chiropractors and billed for them as if the tests were actually ordered by a Rose Radiology-employed physician.

The company was founded in 2001 by radiologist Manuel S. Rose, according to its website, which says the company was created with the philosophy that it “should be owned, managed and staffed by licensed board certified radiologists, thus avoiding conflicts of interest.” It touts being one of the few practices of its kind to be owned by a doctor.

The company also was accused of performing and billing for radiology procedures that were never actually ordered by the patients’ treatment providers and of sending claims to Medicare for radiology services that were not performed at facilities authorized as Medicare providers.

“Not only do the kinds of frauds that were alleged in this case rob Medicare of needed funds, they threatened the health of elderly and disabled Americans,” said Shimon Richmond, special agent in charge for the Health and Human Services Office of the Inspector General.

The center also was accused of giving kickbacks to referring physicians.

It was alleged, the release said, that the center provided key referral services incentives such as lunches, gift cards and tickets to events in exchange for business.

If you know of or suspect healthcare fraud, contact us now.

CenterLight Healthcare Pays $47.6 Million to Settle Medicaid Fraud Claims

On Thursday, Preet Bharara, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (“HHS-OIG”), announced that the United States has settled civil fraud claims under the False Claims Act against CenterLight Healthcare, Inc., and CenterLight Health System, Inc. (collectively, “CenterLight”), for the enrollment of ineligible members in the CenterLight Healthcare managed long-term care plan (“CenterLight MLTCP”).  CenterLight improperly billed the Medicaid program for 1,241 members who attended or were referred by social adult day care centers (“SADCCs”) and whose needs did not meet the criteria of the managed care plan.  The settlement resolves claims that CenterLight engaged in improper marketing practices to enroll members through SADCCs and induced such members to use SADCCs as the members’ primary source of personal care services.  CenterLight continued to seek and obtain monthly capitation payments for members well after the New York State Department of Health issued guidance in early 2013 explicitly stating that an individual’s attendance at SADCCs does not satisfy the MLTCP eligibility standard.

Under the terms of the settlement approved yesterday by United States District Judge Lewis A. Kaplan, CenterLight must pay a total of $46,751,086.74 to the Medicaid Program, $18,700,434.70 of which will go to the United States.  In addition, CenterLight is required to:

  • Comply with all contractual and regulatory requirements governing the enrollment, assessment, re-assessment, and dis-enrollment of CenterLight MLTCP members.
  • Credential only SADCCs that are properly certified and capable of providing community-based personal care services consistent with regulatory requirements.
  • Monitor SADCCs in its provider network to ensure that they furnish the community-based personal care services called for under CenterLight MLTCP member care plans and operate in compliance with applicable regulations.
  • Prohibit marketing practices that are directed at enrolling CenterLight MLTCP members through SADCCs.

Manhattan U.S. Attorney Preet Bharara said:  “CenterLight Healthcare improperly received millions of Medicaid dollars by enrolling ineligible members into its managed care plan.  With this settlement, CenterLight now has admitted to its conduct and will pay over $46 million.  We are committed to holding health care providers accountable if they wrongfully seek and receive federal funds, and we thank HHS’s Office of the Inspector General and the New York State Attorney General’s Office for their assistance.”

HHS-OIG Special Agent in Charge Scott J. Lampert said:  “CenterLight’s conduct compromised the integrity of the Medicaid program by enrolling beneficiaries in a plan for which they were not eligible.  HHS-OIG is committed to holding providers accountable for their practices, and the manner in which care is provided.”

Pursuant to the Medicaid managed long-term care program, health care providers, such as CenterLight, are responsible for arranging and managing long-term health care services offered to Medicaid beneficiaries.  In exchange, providers receive a monthly capitation payment of approximately $3,800 for each beneficiary enrolled in the health care plan.  MLTCPs offer a variety of services, including assistance with activities of daily living, care management services, skilled nursing services, physical therapy, occupational therapy, speech therapy, nursing home care, and preventive services.  In order to qualify for enrollment in an MLTCP, Medicaid beneficiaries need to, among other things, be eligible for a nursing home level of care and require at least 120 days of community-based long-term care, which includes a wide range of health care services such as personal care services.  CenterLight contracted with SADCCs to provide care, including personal care services, to CenterLight MLTCP members.

In the settlement agreement, CenterLight admits that 1,241 CenterLight MLTC members who had been referred by SADCCs or had used SADCC services were not eligible to be members of the managed care plan.  Many of these ineligible members were not eligible at the time of their initial enrollment, while others were ineligible to remain in the managed care plan at the time of their re-assessment but were not dis-enrolled in a timely manner.  Although the SADCCs were supposed to be providing care to CenterLight members, CenterLight admits that various SADCCs in its provider network did not provide services that qualified as personal care services under the terms of its Medicaid contract or were not legally permitted to provide such services.

If you know of or suspect Medicaid fraud, contact us now.

California Hospital to Pay More Than $3.2 Million to Settle Allegations That It Violated the Physician Self-Referral Law

The Department of Justice announced on Friday that Tri-City Medical Center, a hospital located in Oceanside, California, has agreed to pay $3,278,464 to resolve allegations that it violated the Stark Law and the False Claims Act by maintaining financial arrangements with community-based physicians and physician groups that violated the Medicare program’s prohibition on financial relationships between hospitals and referring physicians.

The Stark Law generally forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital unless that relationship falls within an enumerated exception.  The exceptions generally require, among other things, that the financial arrangements do not exceed fair market value, do not take into account the volume or value of any referrals and are commercially reasonable.  In addition, arrangements with physicians who are not hospital employees must be set out in writing and satisfy a number of other requirements.

“The settlement of this matter reflects not only our commitment to protect the integrity of the healthcare system through enforcement of the Stark Law, but also our willingness to work with providers who disclose their own misconduct,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.

The settlement announced today resolves allegations that Tri-City Medical Center maintained 97 financial arrangements with physicians and physician groups that did not comply with the Stark Law.  The hospital identified five arrangements with its former chief of staff from 2008 until 2011 that, in the aggregate, appeared not to be commercially reasonable or for fair market value.  The hospital also identified 92 financial arrangements with community-based physicians and practice groups that did not satisfy an exception to the Stark Law from 2009 until 2010 because, among other things, the written agreements were expired, missing signatures or could not be located.

“Patient referrals should be based on a physician’s medical judgment and a patient’s medical needs, not on a physician’s financial interests or a hospital’s business goals,” said U. S. Attorney Laura E. Duffy of the Southern District of California.  “This settlement reinforces that hospitals will face consequences when they enter into financial arrangements with physicians that do not comply with the law. We will continue to hold health care providers accountable when they shirk their legal responsibilities to the detriment of tax payer-funded health care programs.”

“Together with our law enforcement partners, our agency’s investigators and attorneys will continue to work with health care providers who use the self-disclosure protocol to resolve their billing misconduct,” said Special Agent in Charge Chris Schrank of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Los Angeles region.”

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 $27.1 billion through False Claims Act cases, with more than $17.1 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was handled by the U.S. Attorney’s Office of the Southern District of California, the Civil Division’s Commercial Litigation Branch and HHS-OIG.  The claims settled by this agreement are allegations only, and there has been no determination of liability.

If you know of or suspect Stark law violations, contact us now.

Page 10 of 16« First...89101112...Last »