In Florida, a man was sentenced to 10 years in prison for conspiracy to commit health care fraud in connection with a scheme that resulted in the submission of over $3,000,000 in fraudulent claims to Medicare for genetic testing.
In Texas, a supplier of durable medical equipment was found guilty of five counts of healthcare fraud due to the submission of false claims to Medicare. The court sentenced the supplier to 10 years in prison and restitution of $1,600,000.
In Florida, a dermatologist was sentenced to 22 years in prison and $3,700,000 in restitution, and a $25,000 fine for performing 3,086 medically unnecessary surgeries on 865 Medicare beneficiaries.
DO WE HAVE YOUR ATTENTION YET?
The above are some examples of fraud. It is projected that fraud and abuse account for over 15% of annual expenditures for healthcare in the United States. To help combat fraud and abuse, the federal government’s False Claims Act specifically targets healthcare fraud and abuse. And the Attorney General has recently announced that tracking fraud and abuse would be a top priority for the Department of Justice.
Fraud and abuse on multibillion-dollar health care programs come in a variety of forms.
Some of the most common types of fraud and abuse include the following: falsification of information in medical record documents; pharmaceutical and medical device companies marketing products unlawfully through off-label promotion for uses not approved or safe for patients; payments that violate the Anti-Kickback Statute; health care plans unlawfully providing false risk-adjustment or other data regarding patient-members; health care providers unlawfully billing through up-coding (misrepresenting the types of services that were provided), improper unbundling, or billing for services not provided or medically unnecessary; billing for supplies not provided, among other examples.
Perhaps the most straightforward and common form of health care fraud concerns fraudulent billing by health care providers for services that are not provided or that are not necessary and proper.
Government health care plans will generally cover qualified costs of “reasonable and medically necessary” services. Health care providers are required to provide services “economically and only when, and to the extent, medically necessary.” In order to be paid by health care for services provided, these providers must certify, on forms called CMS-1500, that the services it provided were “medically…necessary to the health of the patient.”
With respect to many procedures or treatments, health care requires a fixed sum be paid for a certain set of bundled services. Common among these are laboratory tests that are part of a single patient visit. The aggregate rate of reimbursement to medical providers for these services is generally less (and sometimes significantly so) than what would be paid by the government in total if each part of the bundled services were to be billed separately. For this reason, medical providers have a direct economic incentive to “unbundle” such services and bill government programs separately for their cost. This will often violate the False Claims Act.
The federal Anti-Kickback Statute broadly prohibits payments in exchange for the use of products or services by health care beneficiaries. In addition to violations and abuse of this statute, many financial arrangements among medical providers violate the federal Stark law, 42 U.S.C. § 1395nn. That law prohibits the referral of health care patients for designated health services to an entity with which a referring physician has a financial relationship, in the absence of any applicable safe harbor.
In particular, health care providers must routinely certify compliance with both the Anti-Kickback Statute and the Stark law. The certification provides: “I agree to abide by the health care laws, regulations, and program instructions that apply to this provider …. I understand that payment of a claim by health care is conditioned upon the claim and the underlying transaction complying with such laws, regulations, and program instructions (including but not limited to, the Federal anti-kickback statute and the Stark law), and on the provider’s compliance with all applicable conditions of participation in health care.”
Our Clients
Over the past months, several individuals have contacted us for whom we have represented. They have been charged and indicted with healthcare fraud. As evidenced above, this is a major area of interest with law enforcement and prosecutors in the DOJ. I continue to go back to a conversation I had with an FBI agent where he told me the money being taken fraudulently from government insurance programs is money that can no longer be used on healthcare issues like senior care and addiction. These very important programs suffer because of Medicare fraud. Last year, 75% of all people charged with Medicare fraud were sentenced to an average of 36 months in prison and the sentences are consistently increasing in length. We have seen sentences as high as 10 years in prison over the past year for these types of crimes.
These are factors you need to consider when you are planning your defense and mitigation strategy. Keep in mind in many cases that if you committed healthcare fraud in areas like dme, compound medicine, and genetic testing, you may be charged based on the dollar amount you submitted to Medicare and not necessarily on what you collected. For example, in some white-collar crimes, the Federal Sentencing Guidelines call for a prison sentence of 78-97 months for losses between 3-7 million dollars. So think about that: if you submit $10,000,000 in potential claims to Medicare and reimbursed $1,000,000, you may be looking at 8-10 years in prison.
During March and April 2021, there were over 70 individuals in Alabama and Arkansas sentenced in only two separate healthcare conspiracies. Some of my partners have seen the sentencing memorandums which were asking for over a decade in prison for certain of these defendants. During the first week of April, there were three individuals in Alabama who had their sentences revealed of which two were well above last year’s average length. And during the second week of April, a Pennsylvania man pleaded guilty to healthcare fraud in Newark federal district court in connection with a $4,600,000 genetic testing fraud case. Again, go back to the numbers — $3,000,000 to $7,000,000 could result in 78-97 months in prison.
We Can Help
If you have been arrested or indicted for healthcare fraud, I hope you are taking the situation seriously. You need to have a strong attorney well versed in healthcare fraud. When facing these types of potential sentences, you should also consider all sentence mitigation options. Working with a sentence mitigation specialist together with a strong attorney can be the difference between a long prison sentence or a manageable sentence where you can come out the other side and recover from the experience.
If you have been indicted or charged with healthcare fraud and interested in learning more about our personal sentence mitigation programs, please call me today for a free consultation.
Coleman J Flaherty
781-690-5077
