10 Physicians Charged in Fed Sweep of Medicare 'Fraudsters'

September 08, 2011

September 8, 2011 — A federal bust of Medicare fraud in 8 cities has yielded criminal charges against 91 individuals, including 10 physicians, who allegedly billed Medicare for $295 million in false claims with the help of kickbacks, illegal pain medication prescriptions, imaginary psychotherapy sessions, and other ploys.

Federal officials announced yesterday that 70 individuals had been charged in indictments unsealed this week. The remaining 21 defendants were charged in indictments unsealed or filed in the weeks beforehand. The crop of defendants, who also include nurses, physical therapists, and family counselors, was turned up by a Medicare Fraud Strike Force consisting of federal, state, and local enforcement agencies.

The US Department of Justice called the bust "the highest amount of false Medicare billings in a single takedown in Strike Force history."

In a press release, Secretary of Health and Human Services Kathleen Sebelius called the defendants "fraudsters," while Donald Berwick, MD, administrator of the Centers for Medicare and Medicaid Services, said the indictments were "good news for American taxpayers and a powerful warning to healthcare rip-off artists."

Dr. Donald Berwick

In some cases of alleged fraud, the defendants paid kickbacks to Medicare patients to induce them to seek treatment, and then billed the government for medically unnecessary services that were never performed. Other defendants allegedly preyed on vulnerable patients who supplied a pretext for bogus claims, according to the indictments.

Most of the alleged fraud was committed in south Florida, where 45 individuals were charged in a federal court with $159 million worth of false billings for home healthcare, mental-health care, occupational and physical therapy, durable medical equipment, and HIV treatment. Some of the defendants recruited out-of-state drug addicts and alcoholics and let them live in halfway houses as long as they received mental-health services they did not need, said Wilfredo Ferrer, US attorney for the Southern District of Florida, in a press release.

"If the patients refused treatment, they were threatened with eviction and thrown out on the street," said Ferrer. "This conduct is outrageous and will not be tolerated."

More Than 24 Hours’ Worth of Psychotherapy Billed in Single Day

In a US district court in Detroit, Michigan, 3 physicians and 15 other individuals were charged with Medicare scams that cost the program more than $28 million. In 1 scheme, 2 physicians allegedly referred patients — again recruited with the help of kickbacks — for physical therapy and other services that were deemed medically unnecessary and never provided.

A variation on this theme involved a third physician who allegedly allowed 2 related healthcare organizations to bill Medicare for tens of thousands of imaginary psychotherapy sessions under his Medicare provider number. The physician admitted to authorities that he never conducted the sessions — which routinely totalled more than 24 hours' worth in a single day — and signed patients' charts that he never read in exchange for monthly payments, according to a federal indictment.

Some psychotherapy claims were filed for deceased patients. Many others named special-needs patients who lived in adult foster homes with financial and ownership connections to the companies billing for the psychotherapy.

Adult foster homes typically care for individuals who are developmentally disabled, mentally ill, physically handicapped, or aged and who cannot live alone. The federal indictment stated that the owners of these facilities used the Medicare IDs of the residents to bill the program for services never rendered.

Unsupervised PA Illegally Dispensed Pain Meds, Says Indictment

One of the smaller scams alleged — amounting to $2.1 million in bogus Medicare claims — illustrates how the relationship of a physician and a physician assistant (PA) can take an illegal turn.

According to an indictment filed in a Dallas federal court, Daniel Leong, MD, billed Medicare for office visits, diagnostic tests, and drug prescriptions performed by PA Cal Graves even though Dr. Leong was rarely present to supervise Graves as required. Graves allegedly dispensed controlled substances, such as pain medications, during most patient visits even though he lacked authorization from the US Drug Enforcement Administration to do so.

Both men face 6 counts of healthcare fraud and 1 count of conspiracy to commit healthcare fraud.

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