Two women, one from Colorado and the other from Houston, have been sentenced in federal court for their roles a multimillion dollar Medicare Fraud Scheme. Each woman pled guilty to one count of conspiracy to commit healthcare fraud.
The two women conspired with a third individual to submit more than $107.6 million in false and fraudulent claims for durable medical equipment (DME). They helped the third individual manufacture and submit false and fraudulent Medicare claims by establishing shell companies in more than a dozen states. At the third individual’s request, the two women purchased Medicare patient data from foreign and domestic call centers that targeted elderly patients. They instructed the call centers to contact the Medicare beneficiaries with an offer of ankle, arm, back, knee, or shoulder braces at little or no cost. The third individual would then submit Medicare claims for those patients, including some who were deceased, without obtaining a prescriber’s order to ensure that the braces were medically necessary, and charging up to twelve times the actual cost of the equipment. The third individual submitted more than $75 million in claims to insurance companies for which no DME equipment was issued. The two women further facilitated the fraud by answering frequent phone calls from Medicare patients who received DME that they did request, want, or need. In addition, the two women would respond to insurance companies’ requests for prescriber’s orders and medical records, which they were not able to provide.
The two women were sentenced to three years of supervised release, the first year to be served in home detention. One of the women was also ordered to pay restitution of $8.6 million, and the other woman to pay $20.7 in restitution. Both women are barred from engaging in an occupation or business in the healthcare sector. The other individual pled guilty to one count of healthcare fraud and one count of payment of kickbacks in connect with a federal healthcare program.
Healthcare fraud and payment of kickbacks in connection with a federal healthcare program each provide for a sentence of up to 10 years in prison, three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Compliance Perspective
Issue
All members of the healthcare team should be knowledgeable of what may be considered a false claim or an illegal kickback. The Federal Civil False Claims Act 31 U.S.C. § 3729 prohibits knowingly filing a false or fraudulent claim for payment or knowingly using a false record or statement to obtain payment for a false or fraudulent claim. The Federal Criminal False Claims Act 18 U.S.C § 286 prohibits any person from knowingly submitting a false, fictitious, or fraudulent claim for payment by the United States government, and any such person may be found guilty of a felony. The False Claims Act additionally prohibits anyone from conspiring with another person to defraud the government by obtaining or helping to obtain payment or allowance of any false, fictitious, or fraudulent claim. A false claim or kickback can result in placement on the OIG’s List of Excluded Individuals and Entities.
Discussion Points
- Review your policy and procedure for preventing and reporting false claims or kickbacks, and what constitutes a violation. Update your policies and procedures as needed.
- Train all staff on the False Claims Act and the Anti-Kickback Statute, and that violations may be addressed as felonies. Explain their individual responsibilities for preventing, identifying, and reporting violations, and that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit to ensure that staff are aware of what should be done if they suspect a false claim or an illegal kickback has occurred. Additional information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 1 Compliance and Ethics Program, CP 2.3 General Legal Duties and Antitrust Laws.
