The United States Attorney for the Eastern District of Washington announced on February 28, 2024, that a 51-year-old Ohio man had pleaded guilty to conspiring to accept kickbacks in connection with a fraudulent telemarketing and medical supply scheme throughout Washington and in other states.
During the relevant time period, the defendant lived in Olympia, Washington, and was a licensed physician in Washington. According to the plea agreement and information disclosed in court proceedings, between May 2021 and September 2023, the defendant participated in a telemarketing scheme and conspiracy.
A company identified as “Company A” obtained beneficiary information from Medicare and TRICARE by using telemarketers to contact patients in Eastern Washington and other areas. Company A then fabricated fake medical records, falsely reflecting doctor visits and treatment that never occurred. Additionally, the company generated fraudulent medical orders for durable medical equipment (DME). The defendant signed these fraudulent documents, which Company A then sold to other companies for false billing to Medicare and TRICARE. Both the company and the defendant engaged in fraudulent billing for fictitious doctor visits and exams.
Medicare and TRICARE paid more than $13.7 million for DME fraudulently ordered by the defendant for thousands of beneficiaries in Eastern Washington and elsewhere, including beneficiaries who lacked the limb for which the defendant supposedly performed the exam and ordered the DME, because it had been previously amputated. The defendant 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 plea agreement, the defendant agreed to forfeiture of bank accounts and other assets representing the proceeds of his criminal conduct.
“Physicians that receive unlawful kickbacks in exchange for ordering medically unnecessary services erode the public’s trust and waste valuable taxpayer dollars,” said Steven J. Ryan, Special Agent in Charge of the US Department of Health and Human Services, Office of Inspector General (HHS-OIG). “This outcome demonstrates HHS-OIG’s steadfast commitment to work with our law enforcement partners to investigate those who defraud federal healthcare programs.”
Compliance Perspective
Issue
The 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.*
