A California man was sentenced on March 11, 2024, to 19 months in prison for committing healthcare fraud and aggravated identity theft by submitting more than $1 million in fraudulent claims for sleep studies to Medicare. According to court records, the defendant owned a company which operated sleep clinics in Fresno and Tulare Counties. Sleep clinics perform diagnostic sleep studies on patients to identify disorders like sleep apnea and narcolepsy.
From October 2019 through September 2021, the defendant caused the company to submit thousands of claims totaling nearly $1 million to Medicare for sleep studies that were not actually performed on patients. The claims also falsely stated that the patients had been referred for the sleep studies by physicians with whom the defendant had previously worked. This was done because Medicare will not pay for a sleep study unless the patient was referred by a physician.
The defendant committed this fraud, at least in part, to try to pay off financial debts and address other financial difficulties that his brother had caused the company and him to incur without his knowledge or consent. From August 2016 through July 2020, his brother’s company had billed Medicare and Medi-Cal for thousands of sleep studies, totaling over $8,000,000, that the company did not actually perform on patients. This included sleep studies where the patients had died before the dates on which the studies were purportedly performed.
The brother was previously charged with, and has pleaded guilty to, healthcare fraud and aggravated identity theft related to other sleep clinics in the Central Valley. He is scheduled to be sentenced on May 20, 2024, and faces a maximum statutory penalty of 10 years in prison and $250,000 fine for the healthcare fraud and an additional, mandatory two years in prison for the identity theft.
Compliance Perspective
Issue
Fraud, waste, and abuse of federal or state resources is always illegal. Healthcare fraud harms the vulnerable in our communities, our healthcare system, and our basic expectation of competent, available care. It also contributes to rising healthcare costs. Those who engage in healthcare fraud are stealing from taxpayers while jeopardizing the health of Medicare and Medicaid beneficiaries. Curbing fraud is vital to conserving scarce healthcare resources and protecting beneficiaries.
Discussion Points
- Review the facility’s policies and procedures regarding fraud, waste, and abuse prevention and detection, and update policies as needed to incorporate information on how to respond to any fraudulent criminal activities staff may encounter.
- Train staff on fraud, waste, or abuse of federal and state resources. Ensure they understand that it is their responsibility to immediately report any suspicion or knowledge of fraudulent activity to their supervisor, the compliance officer, or via the Hotline.
- Periodically audit staff to ensure that they are aware of what could be perceived as fraud, waste, or abuse of federal or state resources and the steps that they should take to report suspected fraudulent activity. Periodically conduct auditing and monitoring of vendor transactions to ensure they are in agreement with compliance and ethics policies and government standards.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
