Two doctors and a registered nurse who helped a Texas hospice agency scam Medicare have been found guilty of conspiracy to commit healthcare fraud. According to evidence presented at trial, the defendants helped the CEO of the hospice agency defraud Medicare by submitting materially false claims for hospice services, providing kickbacks for referrals, violating HIPAA rules to recruit beneficiaries, and destroying documents to conceal the fraud from Medicare.
The CEO of the hospice agency, who is not a licensed medical professional, pled guilty prior to the trial and testified against his former employees.
The former CEO of the hospice agency revealed that instead of relying on the expertise of licensed medical professionals, he and the hospice nurses, including the convicted RN, determined which patients would be admitted to or discharged from hospice care, as well as which drugs and dosages they would receive.
The two convicted doctors had certified that they examined the hospice patients face-to-face, when in fact no such examinations had occurred.
Witnesses also testified that the two convicted doctors engaged in the prescription of Schedule II controlled substances, such as morphine and hydromorphone, by pre-signing blank C2 prescriptions and giving those to the CEO and others at the hospice agency to let them prescribe controlled substances without any physician oversight.
The CEO and the nurses used the pre-signed prescription pads, prepared by the two convicted doctors and other doctors, to dispense controlled medications like morphine to patients. The CEO also paid the two convicted doctors kickbacks – disguised as medical director salaries – to induce them to refer patients to his facilities.
When Medicare suspended payment to the hospice agency over concerns about billing, the two convicted doctors and others moved patients and employees to a new hospice company and continued to bill Medicare for hospice services.
In total, Medicare and Medicaid paid the hospice agency and its entities approximately $40 million dollars for hospice services before the companies were shut down.
In addition to the healthcare fraud charges, the jury found one of the doctors guilty of two counts of healthcare fraud and one count of obstruction of justice. The other doctor was also found guilty of three counts of healthcare fraud and one Title 21 drug offense. The RN was found guilty of three counts of healthcare fraud.
The two doctors face up to 60 years in federal prison, while the convicted RN faces up to 40 years in federal prison. Twelve of the codefendants pled guilty prior to the trial and face anywhere from probation to up to 14 years in federal prison.
Compliance Perspective
Issue
The focus of a compliance and ethics program is on protecting government funds from fraud, waste, and abuse and detecting criminal, civil, and administrative violations while promoting quality of care. The Centers for Medicare & Medicaid Services (CMS) requires skilled nursing facilities to have a compliance and ethics program that is effective in this effort. The Compliance and Ethics Committee, when operated appropriately, will assist in detecting false claims, HIPAA breaches, illegal kickbacks, and other violations. 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. More information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 1, Compliance and Ethics Program.
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 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 all staff are aware of compliance and ethics concerns and understand their responsibility to report any concerns of compliance and ethics violations to their supervisor, the compliance officer, or via the anonymous hotline.
FOR MORE INFORMATION ON THIS TOPIC VIEW: UNDERSTANDING ELEMENT 5 – MONITORING, AUDITING AND INTERNAL REPORTING SYSTEMS and UNDERSTANDING ELEMENT 7 – INVESTIGATIONS AND REMEDIAL MEASURES.
