$24 Million Medicaid Fraud Scheme Alleged by Connecticut Attorney General

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Connecticut’s Attorney General, George Jepsen, alleges that 28 individuals, dental practices and corporations were involved in a $24 million Medicaid fraud scheme. He filed a civil action  on May 31, 2012. It is the first case the state has initiated under the Connecticut False Claims Act. The Connecticut False Claims Act gives the state the ability to seek compensation for taxpayers from those who submit false claims for reimbursements they are not eligible to receive. To view the Connecticut False Claims Act, click here.

The complaint seeks restitution, treble damages and civil penalties as well as a permanent injunction against the unlawful acts and practices alleged in the complaint. To view the complaint, click here.

Accused Individual Allegedly Found Ways to Bill Medicaid for Services, Despite Being Excluded from Medicare and Medicaid Programs.

According to the complaint, one of the individuals involved in the alleged fraud scheme was previously convicted of a felony in another state for submitting false health care claims. He was then permanently excluded by the U.S. Department of Health and Human Services (DHHS) from participation in Medicare and Medicaid, as a result of his conviction. Any entity with which he serves as an employee, administrator, operator or in any other capacity, were also excluded from state healthcare programs.

The state alleges that, despite the exclusion, he established a number of dental practices in Connecticut that were operated by practicing dentists who billed Medicaid for services.

Allegedly, the excluded individual was actively involved in managing the practices and received millions of dollars in Medicaid reimbursements. The dental providers allegedly knew of the exclusion and did not disclose it on enrollment and re-enrollment forms for the Connecticut Medical Assistance Program.

Florida Has Similar False Claims Act.

Florida has a Medicaid False Claims Act similar to the one that Connecticut has. Florida’s Medicaid False Claims Act can be found here. However, in Florida, a separate provision of the state’s Medicaid law provides an award to a whistle-blower of up to 25% of any recovery. This is in Section 409.9203, Florida Statutes. In addition, Florida has a law that allows civil recovery for criminal acts such as Medicaid fraud, which is sometimes used by the Florida Attorney General and private individuals to recover money lost as a result of certain criminal conduct. For the Florida Civil Remedies for Criminal Actions law, click here.

As a general rule state false claims acts are modeled after the federal False Claims Act used to pursue Medicare fraud. For the federal Medicare Fraud False Claims Act, 31 U.S.C. § 3729, click here.

Contact Health Law Attorneys Experienced in Handling Medicaid and Medicare Fraud Cases.

The Health Law Firm’s attorneys routinely represent physicians, dentists, nurses, medical groups, clinics, pharmacies, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicaid and Medicare investigations, audits, hearings and recovery actions. In addition The Health Law Firm represents health providers in Medicare exclusion actions and in being reinstated to the Medicare Program or being removed from the exclusion list.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources:

Rees, Nick. “Jepsen alleges $24M Medicaid fraud.” Legal Newsline. (June 4, 2012). From: http://www.legalnewsline.com/news/contentview.asp?c=236342

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

This Little Piggy Went to the Market, This Little Piggy Ended Up in Court.

By Lance O. Leider, J.D., The Health Law Firm

The jig is up. At least it is for a podiatrist in Colorado. On Thursday, February 12, 2015, the physician in question pleaded guilty to one count of health care fraud. Through improper location coding, the podiatrist allegedly defrauded Medicare out of higher reimbursements.

According to The Daily Sentinel, the podiatrist is accused of performing services at a nursing home while claiming otherwise. The physician allegedly billed for services based upon location coding showing the patients were seen in his private office, not in the nursing facility in which they resided.  In doing so, he received a higher reimbursement rate than he was eligible for.

The Logistics of The Scheme.

When registering to become a Medicare provider, physicians are required to provide the location at which they provide services.  Then when the services are billed, a place of service modifier can be attached to the code (e.g., hospital, private office, assisted living facility, etc.) to determine whether the service qualifies for a bump in reimbursement.  Services provided in an office setting typically receive reimbursements at a higher level in order to compensate for the overhead of the physician. Office expenditures such as rent, insurance, utilities and other cost associated with running a business are taken into consideration.

dollar sign

The podiatrist was allegedly granted three months of rent-free space at the nursing home to provide services for the residents.  The physician, therefore, considered this to be enough to bill the office place of service modifier.  According to court records, the space he practiced out of was actually a storage room/beauty salon of the facility.

The charging document claims that the physician improperly billed on only two dates of services.  Reports differ on the amount of alleged fraud (some reports are as low as $2,000 while others are as high as $50,000).  But regardless of the actual, this story goes to show that the federal government is not above felony prosecution for less than “blockbuster” amounts of fraud.

The Benefits Never Outweigh the Risks.

With the sentencing hearing in May, the physician could be sentenced to probation or a maximum of 10 year in prison, and fined up to $250,000. In addition, the podiatrist will no longer be permitted to treat Medicare patients.  It is also possible that the podiatrist will be unable to retain his license to practice due to being a convicted felon and being placed on the OIG exclusion list.

arrest

If you are facing an OIG audit or investigation, you should immediately consult with an attorney experienced in handling those matters.  Retaining experienced counsel in the early stages of an OIG audit or investigation can be of great assistance in resolving the case without criminal charges or placement on the exclusion list.  Also, if you feel that your practice may be billing incorrectly for services, you should speak with an expert to determine the method and manner of any necessary repayment to the federal government.

To read the full story from The Daily Sentinel, click here.

To view court records of the case, click here.

One Last Thing.

We cannot stress enough the importance of properly registering your address with Medicare. The consequences can be damning to your career. Medicare exclusion will not only directly impact your bottom line, but it will also limit your job eligibility.

Comments?

Have you ever run into an issue with your Medicare registered address? Did you know this was a surefire way to put yourself at risk? Please leave any thoughtful comments below.

Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent healthcare providers in reversing termination of Medicare billing privileges, preparation of corrective action plans (CAPs), requests for redetermination, hearings on Medicare terminations, Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

About the Author: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2015 The Health Law Firm. All rights reserved.

HIPAA Violations in Colorado Can Incur Serious Punishments

By Carole. C. Schriefer, R.N., J.D.

The Health Insurance Portability and Accountability Act (HIPAA) is a well known Federal regulation among Colorado health care professionals. However, did you know that not complying with HIPAA mandates can cost you thousands of dollars in fines? Did you know that non-compliance could land you behind bars? Health care professionals and facilities across Colorado should be aware of these legal provisions.

Don’t Become a White Collar Criminal.

In June 2005, the U.S. Department of Justice (DOJ) clarified who can be held criminally liable under HIPAA. Covered entities and specified individuals, who “knowingly” obtain or disclose individually identifiable health information in violation of the Administrative Simplification Regulations face a fine of up to $50,000, as well as imprisonment up to one year. Offenses committed under false pretenses allow penalties to be increased to a $100,000 fine, with up to five years in prison. Finally, offenses committed with the intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain or malicious harm permit fines of $250,000, and imprisonment for up to 10 years.

HIPAA Violations Can Cost Big Bucks.

The “American Recovery and Reinvestment Act of 2009”(ARRA), that was signed into law in 2009, establishes a tiered civil penalty for HIPAA violations. The Secretary of the Department of Health and Human Services (DHHS) still has discretion in determining the amount of the penalty based on the nature and extent of the violation and the nature and extent of the harm resulting from the violation. However, the Secretary is still prohibited from imposing civil penalties (except in cases of willful neglect) if the violation is corrected within 30 days (this time period may be extended).

The following outlines the ARRA tiered civil penalty structure for HIPAA violations:

TIER 1

Violation:
Individual did not know that he/she violated HIPAA and by exercising reasonable diligence, would not have known.
Minimum Penalty: $100 per violation, with an annual maximum of
$25,000 for repeat violations. Note: This is the maximum penalty that can be imposed by the State Attorney General regardless of the violation.
Maximum Penalty: $50,000 per violation, with an annual maximum of $1.5 million.

TIER 2
Violation:
HIPAA violation due to reasonable cause and not due to  willful neglect.
Minimum Penalty: $1,000 per violation, with an annual maximum of $100,000 for repeat violations.
Maximum Penalty: $50,000 per violation, with an annual maximum of $1.5 million.

TIER 3
Violation:
HIPAA violation due to willfull neglect but violation is corrected within the required time period.
Minimum Penalty: $10,000 per violation, with an annual maximum of $250,000 for repeat violations.
Maximum Penalty: $50,000 per violation, with an annual maximum of $1.5 million.

TIER 4
Violation:
HIPAA violation due to willful neglect and is not corrected.
Minimum Penalty: $50,000 per violation, with an annual maximum of $1.5 million.
Maximum Penalty: $50,000 per violation, with an annual maximum of $1.5 million.

Who Is Responsible For HIPAA Violations?

The DOJ concluded that the criminal penalties for a violation of HIPAA are directly applicable to covered entities—including health plans, health care clearinghouses, health care providers who transmit claims in electronic form, and Medicare prescription drug card sponsors. Individuals such as directors, employees, or officers of the covered entity, where the covered entity is not an individual, may also be directly criminally liable under HIPAA in accordance with principles of “corporate criminal liability.” Where an individual of a covered entity is not directly liable under HIPAA, he/she can still be charged with conspiracy or aiding and abetting.

The Interpretation of “Knowingly.”

The DOJ interpreted the “knowingly” element of the HIPAA statute for criminal liability as requiring only knowledge of the actions that constitutes an offense. Specific knowledge of an action being in violation of the HIPAA statute is not required.

Consequences Include Medicare Penalties As Well.

DHHS has the authority to exclude a health care provider in violation of HIPAA laws from the Medicare Program and any covered entity that is not compliant with the transaction and code set standards by October 16, 2003 (68 Fed. Reg. 48805).

This is a powerful tool. Medicare exclusion can be a death sentence for a health care provider.

Who Carries The Big Stick Enforcing HIPAA?

The HHS Office for Civil Rights (OCR) enforces the privacy standards, while the Centers for Medicare & Medicaid Services (CMS) enforce both the transaction and code set standards and the security standards (65 Fed. Reg. 18895). Enforcement of the civil monetary provisions has not yet been tasked to an agency.

For more information on enforcement of the privacy standards, click here.

Comments?

Have you ever received discipline for a HIPAA violation? Do these penalties seem harsh to you? Please leave any thoughtful comments below.

Contact a Health Law Attorney Experienced in Defending HIPAA Complaints and Violations.

The attorneys of The Health Law Firm represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other health care providers and institutions in investigating and defending alleged HIPAA complaints and violations and in preparing Corrective Action Plans (CAPs).

For more information about HIPAA violations, electronic health records or corrective action plans (CAPs) please visit our website at www.TheHealthLawFirm.com or call (970) 416-7456.

About the Author: Carole C. Schriefer is a nurse-attorney with The Health Law Firm, which has a national practice. Its regional office is in the Denver, Colorado, area. www.TheHealthLawFirm.com The Health Law Firm, 155 East Boardwalk Drive, Fort Collins, Colorado 80525. Phone: (970) 416-7456.

The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2014 The Health Law Firm. All rights reserved.

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