Five individuals, including a physician and a certified social worker, were charged in a Second Superseding Indictment for their alleged roles in an $11 million healthcare fraud scheme, which involved submitting false claims to Medicare for purported psychotherapy services that were induced by kickbacks and/or never rendered.
The indictment alleges that the owner and operator of a psychotherapy agency in Farmington Hills, Michigan offered and provided kickbacks and bribes to a patient recruiter, as an inducement to refer Medicare beneficiaries to his agency for psychotherapy services, even though such services were medically unnecessary and were never rendered. The recruiter would require the recruited Medicare beneficiaries to sign blank agency sign-in sheets to allow the owner to submit claims to Medicare, through his agency, for psychotherapy services that were never provided.
The office manager of the agency was responsible for obtaining information regarding the patients’ legitimate medical visits to ensure the owner did not submit claims for a psychotherapy appointment on the same date the patient had a legitimate appointment with another medical provider. A doctor and his assistant would then complete fraudulent patient charts indicating they had seen the patient, when in fact, such psychotherapy services were never rendered and/or were induced by kickbacks. As a result of the false and fraudulent claims submitted to Medicare, the agency billed Medicare more than $11 million and Medicare made payments to the agency in an amount more than $5.3 million.
The agency’s owner was also charged with six counts of money laundering for engaging in monetary transactions exceeding $10,000 including transferring more than $1.4 million dollars in fraudulent healthcare fraud proceeds to a national restaurant chain.
The agency owner and the patient recruiter were originally charged in a January 11, 2023 indictment. The other three were added as new defendants in the Second Superseding Indictment of May 5.
“The payment of kickbacks to induce referrals for medical services in Federal healthcare programs, as well as billing for services not rendered, can undermine the trust we place in our nation’s providers and results in costly reductions to our federal healthcare programs,” said Special Agent in Charge Mario M. Pinto of the US Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG will continue to work with our law enforcement partners to ensure that those who commit fraud and pay kickbacks are held accountable.”
Compliance Perspective
Issue
It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs’ loss plus $11,000 per claim filed. Under the civil False Claims Act, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly. Facility staff should be knowledgeable in how to report suspicious billing practices. A nonretaliatory environment for reporting suspicious billing practices is mandatory for all facilities. Under federal and state Anti-kickback Statutes, you may not knowingly and willfully offer, pay, solicit, or receive anything of value to induce or reward for referrals of federal or state healthcare program business. The prohibition against kickbacks applies to those who pay for referrals and to those who receive them. Kickbacks can take various forms, such as bribes or rebates. They can be given in cash or in kind. Failure to promptly report a kickback can result in lawsuits, fines, and other sanctions.
Discussion Points
- Review your policies and procedures for preventing and reporting false claims and for conducting a Triple Check Process to verify accuracy of Medicare claims. Ensure that your policies are reviewed at least annually and updated when new information becomes available. Also review policies and procedures for preventing and reporting an anti-kickback violation. Update your policies and procedures as needed.
- Train staff upon hire and at least annually on your compliance and ethics policies and procedures and on what can be considered a false claim. Provide training to appropriate staff on the Triple Check Process for ensuring accuracy of all Medicare Part A billing and supporting documentation before claims are submitted. Train all staff on federal and state anti-kickback statutes and what can be considered a kickback. Include information on how to report concerns and suspected violations, and make sure staff know that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically perform audits to ensure staff are aware of compliance and ethics concerns and understand their responsibility to report any potential compliance and ethics violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline. Audit to ensure that the Triple Check Process is being followed each month before claims are submitted to Medicare, and that any identified irregularities are corrected. Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect an illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
