A North Carolina ear, nose, and throat (ENT) doctor was found guilty on January 27, 2023, on charges of adulterating medical devices for use on patients with intent to defraud and mislead, fabricating medical and healthcare records, paying illegal renumerations, mail fraud, and conspiracy. The doctor was convicted of using re-used devices to perform more than 1400 surgeries for Medicare patients between 2011 and the end of 2017. She was convicted on all 20 counts in the indictment, and after the verdict was taken into custody pending sentencing.
The doctor operated an ear, nose, and throat practice in three North Carolina cities. Between 2011 and the end of 2017, she performed 1,555 balloon sinuplasty surgeries on 919 Medicare beneficiary patients. The FDA has cleared the Entellus XprESS device to be used in the performance of balloon sinuplasty procedures, but only on one patient, during one surgery. After that, the device must be discarded. But, between 2012 and 2017, the doctor obtained, at most, 36 new Entellus devices, despite being, at times, the top-paid Medicare provider of balloon sinuplasty services in the United States. The evidence showed that the doctor misled and did not inform her patients that they were receiving a procedure with an adulterated device. The defendant admitted that she had sufficient money to buy every patient a new device—but chose not to do so.
The doctor billed Medicare more than $46 million dollars for the balloon sinuplasty procedures between 2014 and 2018. She netted more than $4.79 million from Medicare for these surgeries alone. That amount does not include any sinuplasty surgeries performed on patients with private healthcare insurance and monies received from Medicare prior to that time. The jury ordered forfeiture in the amount of $4,794,039.31 million.
The doctor was also convicted on 10 counts of illegally inducing her patients to receive the sinuplasty surgery by waiving the co-pay. The doctor, through her employees, marketed the sinuplasty surgery as a free “sinus spa” and induced her patients to receive a treatment they may not need, or may not have agreed to, had the full out-of-pocket cost to the patient been disclosed. In an effort to continue obtaining patients for the procedure, the doctor wrote-off, or otherwise hid, the full cost of the procedure on any bills sent to the patient after their visit to her practice. The patient portion of the sinuplasty surgery could be as high as $1,500 for Medicare beneficiaries, which was not disclosed to patients.
The doctor was also convicted of three counts of making false statements relating to healthcare benefits, two counts of aggravated identity theft, and three counts of mail fraud. Between 2017 and 2018, the doctor became the subject of three audits by Medicare contractors. She fabricated medical records supplied to auditors in an effort to keep more than $1.7 million that had already been paid to her by Medicare. The jury convicted the doctor of fabricating and modifying medical records to justify the billing of balloon sinuplasty surgeries and two aggravated identity theft counts related to her use of forged patient signatures on documents in which patients allegedly declared that they received surgeries from the doctor, and that they needed them. The Mail Fraud convictions pertained to the doctor’s fraudulent use of fake medical records to deceive auditors, and to deceive a fellow physician. She was also convicted for tricking a fellow ENT physician into signing a sworn statement that her medical documentation supported her prior balloon sinuplasty surgeries.
The doctor faces a maximum term of imprisonment of 20 years for Mail Fraud, 10 years for Paying Illegal Remunerations, and 5 years for Conspiracy and Making False Statements, and three years for Adulteration with the intent to defraud or mislead. Aggravated Identity Theft carries a 2-year mandatory prison sentence, consecutive to any other punishment. She also faces fines exceeding $250,000.
Compliance Perspective
Issue
Single-use devices must be discarded after use and are never to be used for more than one resident. Nursing homes may purchase reprocessed single-use devices when these devices are reprocessed by an entity or a third party reprocessor that is registered with the FDA. The nursing home must have documentation from the third party reprocessor that indicates that it has been cleared by the FDA to reprocess the specific device in question. It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs’ loss plus $11,000 per claim filed. Under the civil False Claims Act, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly. 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.
Discussion Points
- Review policies and procedures on single-use devices and infection control. Also review policies and procedures for preventing and reporting a false claim and for conducting a Triple Check Process to verify accuracy of Medicare claims. Ensure that your policies are reviewed at least annually and updated when new information becomes available.
- Train appropriate staff on single-use devices and infection control. Also train all staff upon hire and at least annually on your compliance and ethics policies and procedures and on what can be considered a false claim. Provide training to appropriate staff on the Triple Check Process for ensuring accuracy of all Medicare billing and supporting documentation before claims are submitted. Document that these trainings occurred and file the signed document in each employee’s education file.
- Periodically perform audits to ensure that single-use devices are not being reused. Also audit to ensure all staff are aware of compliance and ethics concerns and understand their responsibility to report any potential compliance and ethics violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline. Audit to ensure that the Triple Check Process is being followed each month before claims are submitted to Medicare, and that any identified irregularities are corrected. Review your annual PEPPER (Program for Evaluating Payment Patterns Electronic Report) report to ensure your facility is not an outlier for Medicare billing compared to peers. Patterns of concern may indicate either over payments or underpayments are being received. Use this information as part of your auditing and monitoring efforts to prevent fraud, waste, and abuse of government funds. More information is available at PEPPER Resources (cbrpepper.org).
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
