Articles Posted in Medicare Fraud

Shands Hospitals will pay $26 million to settle a Medicaid/Medicare fraud case accusing it of admitting patients that didn’t require hospitalization to six of its facilities. A whistleblower claim submitted in 2008 claimed that the company overbilled Medicaid and Medicare with the admissions.

The Medicare/Medicaid fraud lawsuit accuses Shands of billing the two programs for short overnight inpatient admissions instead of outpatient services, which are less costly. The $26 million, however, settles just part of the allegations. Claims that the hospitals turned in fraudulent outpatient service bills are still pending.

The person that brought the whistleblower lawsuit, Terry Myers, was as an independent consultant by Shands to audit its health system billing practices several years ago. Shands said that there was system failure and serious insufficient management oversight to abide by Medicaid/Medicare regulations.

The US Department of Justice and 55 hospitals have reached a $34M Medicare fraud settlement accusing 55 hospitals in 21 states of engaging in making false claims for kyphoplasty procedures. The allegations were brought under the False Claims Act by whistleblowers, who will receive about $5.5 million from the settlements reached. Two of the hospitals involved are located in Massachusetts. They are the New England Baptist Hospital in Boston and St. Anne’s Hospital in Fall River.

Kyphoplasty is a procedure for treating spinal fractures frequently caused by osteoporosis. It involves using a balloon device to work with the compressed vertebra and then injecting bone cement into the cavity after the balloon is taken out. The treatment usually requires just a few hours of recovery and is generally an outpatient procedure.

According to the government, the hospitals regularly billed Medicare for this minimally invasive procedure on a more expensive, inpatient basis.

The US Justice Department says that US Renal Care will pay $7.3 million to settle allegations that its Dialysis Corporation of America submitted false Medicare claims, billing more for Epogen, an anemia medication, than what it actually gave to dialysis patients. The accusations stem from a Qui Tam lawsuit filed by whistleblower Laura Davis.

DCA, which has over 100 outpatient dialysis clinics, is accused of billing Medicare not only for the amount of Epogen used by patients but also for the overfill that was left in the vials. The company purportedly didn’t do anything to use this excess and there was even a time when reimbursement for Epogen purportedly made up over 25% of the company’s revenue for medical services.

Davis, a nurse who worked at a DCA clinic, filed her whistleblower lawsuit in 2008. She claims that she first reported the billing discrepancies to the company but that no one paid attention to her. Under the False Claims Act’s qui tam provisions, Davis is entitled to a percentage of the multimillion-dollar recovery. The DOJ says that she will receive $1,314,000.

Examples or Medicare billing fraud:
• Billing for medical services never provided • Conducting medical tests the patient needs and billing Medicare for them • Billing twice for the same equipment or services • Upcoding: billing for a more expensive service than what was actually provided to a patient • Unbundling: Billing separately for certain services that are typically done together and can be billed collectively and at less of a cost
Massachusetts False Claims Act
The state has its own False Claims Act that offers whistleblowers financial incentives for reporting fraud. Recently, certain amendments were made to the Act to further encourage people to come forward and report fraud abuse. For example, now a court can no longer eliminate or lower the percentage a successful whistleblower can get. Also, a whistleblower now doesn’t have to be the “original” source of the fraud information. Additional information to the knowledge that is already in the public domain will suffice.

U.S. Renal Care to Pay $7.3 Million to Resolve False Claims Act Allegations, DOJ, May 21, 2013
Update: Whistleblower allegations about Medicare fraud led to $7.3 million settlement, The Dallas Morning News, May 22, 2013

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Nursing Home to Pay $2.7M for Medicaid Fraud Claims Brought to Light By Whistleblower, Boston Injury Lawyer Blog, March 23, 2013
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Grace Healthcare LLC will pay $2.7M with interest to resolve fraud violations that it either knew of or caused their submission related to the Medicare and TennCare/Medicaid programs. The allegations were reported in a whistleblower lawsuit filed by one of the nursing home manager’s former employees, who will now receive $405,000 per the Qui Tam provisions of the act, which not only lets private citizens sue for Medicare and Medicaid fraud on the US government’s behalf but also allows them to receive a percentage of any recovery.

By settling, Grace Healthcare is not denying or admitting to the allegations. The US Justice Department, however, says that the nursing home company turned in false claims for rehabilitation services that were not medically necessary or reasonable, including occupational, physical, and speech therapy services that were provided at 10 facilities to fulfill their Medicare revenue goals, which were purportedly determined without factoring the patients’ actual individual needs for therapy.

Meantime, Legal News Online is reporting that since January 2009, the US Department of Justice has recovered over $14 billion in false claims cases, including $10.2 billion related to fraud committed against federal health care programs.

Two men have filed a whistleblower case in what may be one of the largest incidents of Medicare fraud in the country’s history. The plaintiffs are Dr. Alon Vainer, a dialysis clinics medical director, and nurse Daniel Barbir. They contend that their employer, dialysis company DaVita Inc., overbilled Medicaid and Medicare by hundreds of millions of dollars between 2003 and 2010 for the purpose of making a profit.

According to Vainer and Barbir, the Medicare/Medicaid billing fraud took place at over 1,800 clinics that treated tens of thousands of patients. Per CNN, Vainer said that for example, with the drug Venofor only part of a 100 milligram vial would be administered to a patient, while the rest of it would be disposed of (while the company billed the government based on use of the entire vial) and the same would be done with other100-milligram vials of Venofor. The more vials that were used, the more money DaVita was able to make off its alleged scam.

Barbir and Vainer claim that they attempted to get this practice stopped but were told to back off and keep following protocols. Barbir eventually left the company while Vainer, who stayed on, said his medical directorship wasn’t renewed as punishment.

A recently unsealed federal whistleblower lawsuit accuses Planned Parenthood Gulf Coast of turning in over 87,000 reimbursement claims to Medicaid that were either “false, fraudulent, or ineligible.” Abby K. Johnson, the plaintiff, is an ex-director at one of the defendant’s clinics. She says she had “system-wide” access to billing activities and the records of patients for approximately two years.

Per her whistleblower complaint, the fraudulent reimbursement claims were made by all of Planned Parenthood Gulf Coast’s 10 clinics. The claims were submitted to the Texas Women’s Health Program, which is the Medicaid program in that state. Johnson contends that even though only office visits having to do with the management of contraception were reimbursable under the contract between her former employer and the Medicaid program, staff proceeded to submit for other services, such as Pap tests, STD tests, and pregnancy tests.

Johnson is accusing the higher ups of acknowledging the fraud that was going on. Meantime, staff allegedly modified patient charts to conceal the Medicaid fraud. Also, although by law Planned Parenthood Gulf Coast is supposed to refer women who are pregnant to clinics or doctors that do not conduct or advocate for elective abortions, the organization would send these patients to its own abortion clinics. (Johnson is a pro-life activist.)

WellCare Health Plans Inc. has consented to pay $137.5 million to settle four whistleblower lawsuits filed against it over allegations of fraudulent Medicaid and Medicare claims. The health care provider is accused of falsely inflating the amount it claimed to have spent on medical care so it wouldn’t have return the money to Medicaid and programs, including Florida Healthy Kids and Florida Medicaid. WellCare offers managed health care service for about 2.6 million Medicaid and Medicare beneficiaries throughout the US.

The Qui Tam lawsuits also accused WellCare of keeping the overpayments for child care that it got from Medicaid, falsifying information that misrepresented the medical conditions that patients had and were treated for, operating a bogus Special Investigations Unit, manipulating performance metrics related to its call center, and committing marketing abuses.

U.S. Attorney Robert E. O’Neill said the settlement and restitution would go to the state and federal programs that sustained losses as a result of the Medicaid/Medicare fraud. Law enforcement will get the forfeited funds, which will go toward paying for future investigations.

Meantime, the whistleblowers that filed their cases under the False Claims Act should be getting back a percentage of what the US government recovers. For example, according to one Florida newspaper, whistleblower Sean Hellein is expected to receive close to $21 million for helping to instigate the federal government’s probe into WellCare. Hellein was a senior financial analyst at the health care provider when he secretly recorded executives talking about how to double bill for patient services in 2006. If WellCare didn’t spend a certain percentage of the money given to it by the government on care, it was supposed to give back the difference.

WellCare Health Plans whistle-blower to receive about $21 million, Tampa Bay Times, April 4, 2012

WellCare will pay $137.5 million to resolve fraud allegations, TBO, April 3, 2012

More Blog Posts:

$25M Whistleblower Settlement Reached in Hospice Fraud Case Against Odyssey Healthcare Inc., Boston Injury Lawyer Blog, March 25, 2012

Qui Tam Cases Result in $2.B Recovered in 2011, Boston Injury Lawyer Blog, January 4, 2012

Whistleblower Testifies on the Toll Medicaid Fraud Can Take On Patients, Boston Injury Lawyer Blog, December 16, 2011

Whistleblower Lawsuit: Hospice Care Provider Vitas Healthcare Accused of Medicare Fraud, Boston Injury Lawyer Blog, November 27, 2011 Continue reading

A $25 million settlement has been reached in the whistleblower lawsuit filed by a former nurse employee against Odyssey HealthCare Inc. Per her Qui Tam complaint, submitted in 2008, between 2006 and 2009 Odyssey enrolled and recertified patients who were non-terminal for hospice care, and billed for services that weren’t reasonable or necessary.

Medicare’s benefit, which covers hospice care, is only for patients that are terminally ill. To be eligible for palliative hospice care, a patient must be diagnosed as having six months of less to live.

The plaintiff who filed the whistleblower lawsuit alleging Medicare fraud, Jane Tuchalski, was fired by Odyssey after she expressed concerns about how the hospice care company was run. (She has since settled a separate settlement related to retaliatory termination claim.) Other Odyssey employees also filed their own whistleblower complaints alleging hospice care fraud. While one of the cases was added to Tuchalski’s lawsuit, the other was later dismissed.

Odyssey is now part of Gentiva Health Service, which noted that the allegations of hospice care fraud were for a period of time that occurred prior to its acquisition of the company. Gentiva said that settling the whistleblower case is a reflection of its commitment to making sure compliance is company-wide.

Whistleblower Lawsuits
Because Tuchalski filed her whistleblower lawsuit under the False Claims Act, she is entitled to a percentage of what the government recovers. Also, under the act, employees who are fired for disclosing fraud are eligible to recover double back pay, special damages, and benefits.

In cases when multiple claims are submitted by different employees or others, it is usually the first person to file whistleblower lawsuit that receives the most from the financial recovery. In the hospice fraud case against Odyssey, claimants will get about $4.6 million.

Whistle-blower case on hospice fraud settled for $25 million, JSOnline, March 1, 2012

Hospice Provider Odyssey Healthcare Agrees to Pay $25 Million to Resolve False Claims Act Allegations,, March 1, 2012

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Whistleblower Lawsuit: Hospice Care Provider Vitas Healthcare Accused of Medicare Fraud, Boston Injury Lawyer Blog, November 27, 2011
Medicare Fraud?: Cigna, UnitedHealth Group, and Aetna Under Scrutiny for Possible Kickback Violations, Boston Injury Lawyer Blog, November 22, 2011
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In his whistleblower fraud lawsuit, Michael Rehfeldt, a former Vitas Healthcare Corp. manager, accuses the hospice care chain of defrauding the US government. Vitas is a unit of Chemed Corp.

Rehfeldt claims that Vitas and health insurers enrolled patients that weren’t fatally ill in Medicare. He is alleging fraudulent billing and false certifications.

Rehfeldt contends that Vitas allegedly benefited from the scam while breaking rules that prevents patients that aren’t facing death from receiving hospice care. He says that when he told his supervisors about the alleged misconduct, they ignored his concerns. Rehfeldt believes this shows that Vitas executives know about the Medicare fraud.

Meantime, the US Justice Department now wants internal documents from Vitas so it can look into the fraud allegations. The government told the district court that it believes that Vitas defrauded Medicaid and Medicare of hundreds of millions of dollars.

In the last 10 years, the number of patients covered under Medicare through Vitas has doubled to 1.1 million. Although the hospice care company cannot comment on ongoing litigation, a spokesperson for Vitas did say that it has consistently complied with the rules of both Medicaid and Medicare.

Rehfeldt is seeking damages on behalf of the US government. As the whistleblower, he is entitled to part of whatever is recovered over the Medicare fraud. The False Claims Act offers this incentive to get whistleblowers to come forward. He is also suing Care Level Management LLC and WellMed Medical Management in his qui tam complaint.

Hospice Care
In order to qualify for hospice services under Medicare, a patient must only have six months or less to live. Two doctors must certify that this is true. A patient, however, can stay on longer than that as long as his/her terminal diagnosis is recertified every two months.

Whistleblower Accuses Chemed Unit of Medicare HMO Conspiracy, Bloomberg, November 16, 2011

Texas Lawsuit Identifies Problems In Medicare Hospice Provisions, Kaiser Health News, November 16, 2011

More Blog Posts:
Medicare Fraud?: Cigna, UnitedHealth Group, and Aetna Under Scrutiny for Possible Kickback Violations, Boston Injury Lawyer Blog, November 22, 2011
Whistleblower Lawsuit Accuses Florida Hospital of Defrauding Medicare of $2M, Boston Injury Lawyer Blog, November 15, 2011
Pfizer Settles Whistleblower Claim Alleging Pharmaceutical Fraud Related to Detrol, Boston Injury Lawyer Blog, October 19, 2011 Continue reading

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