A Michigan clinic owner was sentenced to 7 years and 6 months in federal prison after having pled guilty to healthcare fraud and money laundering charges, announced United States Attorney Dawn N. Ison on October 26, 2023. He was also ordered to forfeit approximately $5.3 million as the gross proceeds of his unlawful conduct.
During his plea, the defendant admitted he owned and controlled a purported psychotherapy agency in Farmington Hills, Michigan, for the purpose of submitting false and fraudulent claims to Medicare, seeking reimbursement for psychotherapy services that were not provided or were otherwise not eligible for reimbursement and whose Medicare identification numbers were procured through kickbacks and bribes.
The defendant offered and provided kickbacks and bribes as an inducement to refer Medicare beneficiaries to his clinic for psychotherapy services, even though such services were medically unnecessary and were never rendered. A co-conspirator would require the recruited Medicare beneficiaries to sign blank clinic sign-in sheets. The defendant and others completed the sheets as if the patients had been provided psychotherapy services and relied upon them to support his fraudulent claims to Medicare, through the clinic, for psychotherapy services that were never rendered.
In furtherance of the scheme, the defendant instructed employees to obtain information regarding the Medicare beneficiaries legitimate medical visits and or treatments to ensure he did not submit a fraudulent claim for a psychotherapy appointment on the same date the beneficiary had a legitimate appointment with another medical provider.
The defendant admitted he submitted or caused the submission of approximately $11 million dollars in fraudulent claims to Medicare, and Medicare paid approximately $5.3 million dollars to him as a result of the fraudulent submissions.
The defendant would then transfer the proceeds of the healthcare fraud scheme to various entities in an effort to conceal the proceeds. Specifically, on January 21, 2023, after his arraignment in this case, he transferred approximately $1,445,000 in a cashier’s check issued by a financial institution located in the Eastern District of Michigan to a national restaurant chain knowing the source of these funds was criminal proceeds from the healthcare fraud scheme.
“Medical providers and others who unlawfully benefit from the payment of kickbacks in exchange for patient referrals, as well as bill our federal healthcare programs for medically unnecessary and non-rendered services, waste valuable taxpayer dollars and erode the trust that we place in these individuals,” said Mario M. Pinto, Special Agent in Charge of the US Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG remains committed to working with our law enforcement partners to identify and investigate those who defraud our federal healthcare system.”
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. The OIG strongly encourages nursing facilities to have comprehensive procedures in place to ensure that services are of an appropriate quality and level and are in fact delivered to nursing facility residents as ordered and as reported in claims for reimbursement. Moreover, accurate documentation at the time of service is critical to ensuring that billing is fully supported. 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 policies and procedures for preventing and reporting false claims, suspicious billing practices, and anti-kickback violations. Update your policies and procedures as needed.
- Train all staff on federal and state anti-kickback statutes and what can be considered a kickback. Also train staff on what can be considered a false claim. 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 all staff are aware of their responsibility to identify compliance and ethics concerns, including false claims and kickbacks, and to promptly report violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline. Perform Triple Checks for all Medicare Part A claims prior to submission to ensure that medical necessity is supported by appropriate documentation, and that services meet skilled care requirements.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
