A North Carolina man was sentenced to serve 70 years in prison and three years of supervised release for conspiracy to commit healthcare fraud. Additionally, he was ordered to pay $1,130,137 in criminal restitution to the North Carolina Fund for Medicaid Assistance.
In March 2016 the North Carolina man formed a behavioral health business in the state of North Carolina. Between 2016 and 2020 he conspired with multiple other individuals to defraud the North Carolina Medicaid System by submitting over $1 million in false and fraudulent claims for reimbursement of behavioral health services. These false claims used stolen beneficiary and clinician information that was incorporated into the fraudulent billings.
In one of the fraudulent acts, he partnered with two other individuals to source and integrate the stolen Medicaid beneficiary data into the behavioral health business’ billings. In turn, the beneficiary information was used to back-bill Medicaid for the maximum number of units allowed even though the beneficiary was never treated by the behavioral health business. Another individual was recruited to fabricate treatment records and began this before the first billings were even submitted to Medicaid. The individuals that partnered with the North Carolina man were also sentenced and ordered to pay restitution.
Compliance Perspective
Issue
The Centers for Medicare & Medicaid Services (CMS) requires skilled nursing facilities to have a compliance and ethics program that is effective in preventing and detecting criminal, civil, and administrative violations under the Social Security Act, and in promoting quality of care. Routine audits should be conducted of monetary transactions, and the results of the audits should be reported to the Compliance and Ethics Committee and to the governing body. The audits should have a corrective action plan in the event that a discrepancy is found, and all discrepancies should be investigated and rectified immediately. It is imperative that every facility has an effective Compliance and Ethics Committee to reduce the likelihood of healthcare fraud, waste, and abuse of government funds.
Discussion Points
- Review your policies and procedures for operating an effective Compliance and Ethics Program. Ensure that your policies are reviewed at least annually and updated when new information becomes available.
- Train all staff on your compliance and ethics policies and procedures and their responsibilities upon hire and at least annually. Document that these trainings occurred, and file the signed document in each employee’s education file.
- Periodically perform audits to ensure that all staff are aware of compliance and ethics requirements and understand their responsibility to report any violations immediately to their supervisor, the compliance and ethics officer, or via the anonymous hotline.
