A federal grand jury in Nashville returned a 40-count second superseding indictment, charging eight people in a Medicare and Medicaid fraud conspiracy which targeted nursing home residents and others.
Defendant 1, a North Carolina man, was originally charged in July 2021, with conspiracy and violation of the Anti-Kickback Statute for his role in orchestrating a fraudulent Medicare and Medicaid billing scheme related to genetic testing. He is the owner and chief executive officer of a series of laboratories based in Tennessee. He and seven others were charged with healthcare fraud, conspiracy to commit healthcare fraud, and conspiracy to violate and violations of the Anti-Kickback Statute. He is also charged with money laundering.
The indictment alleges that the co-conspirators entered into sham contracts and paid kickbacks in exchange for genetic testing and urine analysis samples. This included targeting and recruiting elderly patients who were federal healthcare program beneficiaries in order to obtain their genetic material for conducting genetic tests. Marketers, who were not healthcare professionals, obtained swabs from the mouths of the patients at nursing homes, senior health fairs, and elsewhere. The tests were then purportedly approved by telemedicine doctors who did not engage in the treatment of the patients, and often did not even speak with the patients for whom they ordered tests. Frequently, the patients or their treating physicians never received the results of the tests. Defendant 1 and the co-conspirators paid illegal kickbacks and bribes in exchange for the doctor’s orders and tests, without regard to medical necessity. During the period of 2016 to July 2021, they billed Medicare and Medicaid over $150 million.
If convicted, Defendant 1 faces up to 10 years in prison for the money laundering charges, and all defendants face up to 10 years in prison for the healthcare fraud and Anti-Kickback Statute charges, and up to 5 years for the charge of conspiracy to violate the Anti-Kickback Statute.
Compliance Perspective
Issue
All laboratory tests performed for residents must be medically necessary in order to bill Medicare, Medicaid, or a private insurance company. When determining if a test or procedure is medically necessary, the results of the test should be needed to diagnose or treat an illness, injury, condition, or disease, or its symptoms. Claims for tests or procedures that are unnecessary in diagnosing or treating an illness, injury, condition, disease, or its symptoms may be seen as violations of the False Claims Act and may result in fines, criminal charges, and other sanctions.
Discussion Points
- Review your policies and procedures for laboratory testing services, including billing practices for laboratory testing, and for preventing and reporting false claims and anti-kickback statute violations. Update as needed.
- Train staff to ensure that ordered testing is medically necessary, and that if a laboratory test or other ordered service is considered medically unnecessary, the order should be clarified before proceeding. Include your medical director in this effort so he or she can intervene if a provider is not appropriately determining medical necessity for residents. Train all staff on the Anti-Kickback Statute and what can be considered a false claim or kickback. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that these trainings occurred and file each document in the employee’s individual education files.
- Periodically audit to ensure that laboratory tests meet the criteria for medical necessity. Survey professional staff on their knowledge of what can be considered medical necessity. Also periodically audit staff understanding to ensure that they are aware of what should be done if they suspect unnecessary services are ordered, false claims are being submitted, or an illegal kickback has occurred.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
