The United States Attorney for the Eastern District of Washington, Vanessa R. Waldref, announced on June 7 that a grand jury returned an Indictment charging a doctor with sixteen counts of conspiracy, fraud, and false statements in connection with his participation in a telemarketing healthcare fraud scheme. According to the Indictment, between February 2018 and September 2019, the doctor, a licensed Washington physician, participated in a scheme and conspiracy to obtain millions of dollars by falsely billing Medicare for medically-unnecessary genetic tests and durable medical equipment, including back, knee, shoulder, and ankle braces.
The Indictment alleges that the doctor signed false and fraudulent orders for genetic tests and braces for elderly Medicare beneficiaries that he was not treating, and with whom he never spoke or interacted. The Indictment alleges that, instead, telemarketers associated with a telemarketing company contacted the elderly Medicare beneficiaries and obtained their personal information and beneficiary numbers. The doctor used an internet portal provided by the company and placed false and fraudulent orders for braces and genetic tests for the beneficiaries. He also signed orders and other documents prepared by the company that contained false medical information and made it appear that he was treating the beneficiaries.
According to the Indictment, the company then sold the orders to genetic testing labs and durable medical equipment companies, who then billed Medicare. The company paid a $20 kickback to the doctor for each beneficiary for which he placed a Medicare order.
The doctor reviewed these orders for as little as 11 seconds before signing them and falsely attesting to their medical necessity, and never once declined to sign an order. Medicare was billed $4.1 million for fraudulent orders signed by the doctor, who never once spoke to, treated, or interacted with a patient. Medicare paid out more than $1.5 million before the fraud was uncovered.
In June 2022, the Department of Justice announced that the owner of the company was sentenced to 14 years in federal prison for his role in the conspiracy to fraudulently bill Medicare. The charges against the doctor carry maximum sentences of up to 20 years in federal prison.
“For far too long, elderly members of our communities have faced abuse, neglect and exploitation,” stated US Attorney Waldref. “Studies show that one in ten elders report experiencing elder mistreatment each year. We take these crimes seriously, and our office is committed to investigating and prosecuting financial fraud scams, especially those that impact elderly members of our community.”
Compliance Perspective
Issue
While the expansion of telehealth has been critical to maintaining beneficiaries’ access to care, it is important that new policies and technologies with potential to improve care and enhance access achieve these goals and are not compromised by fraud, abuse, or misuse. In recent years, the Office of Inspector General (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.*
