The United States Attorney for the Eastern District of Washington announced on August 7, 2024, that an Ohio doctor had pleaded guilty to conspiring to accept kickbacks in connection with a fraudulent telemarketing and medical supply scheme throughout Washington and in other states. The doctor was sentenced to 24 months in federal custody to be followed by 3 years of supervised release, as well as restitution of $839,566.44. In addition, the judge imposed a fine of $50,000.
During the relevant time period, the doctor lived in Olympia, Washington, and was a licensed physician in Washington. According to court documents and information presented at the sentencing hearing, between May 2021 and September 2023, the doctor participated in a telemarketing scheme and conspiracy.
A company identified as “Company A” obtained Medicare and TRICARE beneficiary information by using telemarketers to contact patients in Eastern Washington and other areas to obtain their personal and health information. Company A then used this information to create fake medical records that falsely indicated doctor visits and treatments supposedly performed by the doctor, which never occurred. Additionally, fraudulent medical orders for durable medical equipment were created. The doctor signed these fraudulent medical documents and equipment orders, which were then sold by Company A to other companies that used them to falsely bill Medicare and TRICARE. Both Company A and the doctor also falsely billed Medicare and TRICARE for fictitious doctor visits and exams that never took place.
Medicare and TRICARE paid over $14.6 million for durable medical equipment fraudulently ordered by the doctor for more than ten thousand beneficiaries in Eastern Washington and other locations. This included beneficiaries who lacked the limb for which the doctor supposedly performed the exam and ordered the equipment, as it had been previously amputated. The doctor also admitted to directly receiving at least $839,565 from Medicare and TRICARE for fraudulent doctor visits and exams that never took place. As part of the sentence, the court ordered the forfeiture of funds in the doctor’s bank and investment accounts representing the proceeds of his criminal conduct, and ordered him to pay restitution to the Medicare and TRICARE programs.
Compliance Perspective
Issue
The Office of Inspector General (OIG) has conducted dozens of investigations of fraud schemes involving companies and individuals that purported to provide telehealth, telemedicine, or telemarketing services and exploited the growing acceptance and use of telehealth. These schemes raise fraud concerns because of the potential for considerable harm to federal healthcare programs and their beneficiaries, which may include: (1) an inappropriate increase in costs to federal healthcare programs for medically unnecessary items and services and, in some instances, items and services a beneficiary never receives; (2) potential to harm beneficiaries by, for example, providing medically unnecessary care, items that could harm a patient, or improperly delaying needed care; and (3) corruption of medical decision-making. Practitioner arrangements with telemedicine companies may also lead to criminal, civil, or administrative liability under federal laws including, for example, the federal anti-kickback statute, OIG’s exclusion authority related to kickbacks, the Civil Monetary Penalties Law provision for kickbacks, the criminal healthcare fraud statute, and the False Claims Act.
Discussion Points
- Review policies and procedures regarding the use of telemedicine within the facility and preventing fraud, waste, and abuse. Also review your policies and procedures for operating an effective compliance and ethics program to ensure that the identifying and reporting of false claims or kickbacks is part of your policy.
- Provide education to nursing and business office personnel on their responsibility to identify and report any concerns that unnecessary medications, treatments, supplies, or equipment are being ordered for residents. Train staff about fraud, waste, and abuse and the prohibition regarding acceptance of illegal kickbacks and bribes in exchange for ordering medical equipment, performing lab tests, prescribing medications, and other activities. Staff who observe or reasonably suspect that kickbacks and bribes are being offered or accepted should report such suspicions to their supervisor or through the facility’s Hotline.
- Periodically audit to determine if telemedicine tools are being used appropriately and that facility personnel are not being offered or accepting bribes or kickbacks. Also audit to ensure that staff are aware of their responsibility to identify compliance and ethics concerns and to promptly report violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
