Friday, December 16, 2011

Health-Care Fraud Cases Filed by U.S. Rose 69% to Record

U.S. health-care fraud prosecutions reached a high last fiscal year, rising 69 percent from the year earlier, according to a nonprofit research group’s analysis.
The U.S. reported 1,235 new health-care fraud prosecutions in the year ending Sept. 30, the largest number reported since separate tracking of the offense began 20 years ago, according to a report released today by Syracuse University’s Transactional Records Access Clearinghouse.  There were 731 new cases the year before.

The Obama administration expanded the government’s pursuit of health-care fraud cases, including scams against Medicare, the program for the elderly and disabled.

Nearly one out of every nine health-care fraud prosecutions were in southern Florida.  Last year’s numbers were boosted by prosecutors charging 548 defendants with health-care fraud in Puerto Rico.

Thursday, December 15, 2011

Another corrupt Army Major doing the perp walk (24 months to ponder his misdeeds)

From the San Antonio Express News:
An ex-U.S. Army major was sentenced Tuesday to two years in prison and ordered to repay $400,000 for helping a former fellow officer from San Antonio in a multimillion-dollar bribery ploy.
Charles Joseph Bowie Jr., 45, of Georgetown, pleaded guilty to a money-laundering charge and admitted taking the money while helping former Army Maj. John Cockerham rig an Army contract to pay $13 million for nearly 1.5 million cases of bottled water from an India-based company for the war in Iraq.
In sentencing Major Bowie, Judge Rodriguez, a former Air Force Judge Advocate,  noted Major Bowie's military service but said he had “disgraced the uniform” and rejected the defense's request for probation.  Judge Rodriguez gave him 24 months in prison.  Prosecutors had asked for 30 months.   Major Bowie was administratively discharged, but it's unclear if he will be allowed to keep his pension.   
Here is the Indictment:
Major Bowie Indictment

Fake Doc Sentenced in Healthcare Fraud Case

A recent report by the National Newswire Services indicated that Matthew Paul Brown was recently sentenced by a federal judge in Georgia to five years in prison for health care fraud and wrongful disclosure of patient information. The prosecuting United States Attorney, Sally Quillian Yates, claimed that Brown pretended to be a doctor and that he treated over 1,000 patients without actually being licensed to practice medicine.  Yates said, “His crime defrauded those individual victims of the care they deserved, and defrauded Medicare, Medicaid and private health insurance companies of funds intended and needed for legitimate health care.” Mr. Brown was sentenced to just over five years in prison, three of those years being served on supervised release. He was also ordered to pay more than $1,000,000.00 in restitution to his victims.

Brown ran his operation out of both Atlanta, Georgia and Nashville, Tennessee. While in Atlanta, he convinced practicing physicians to bill Medicare, Medicaid, and private health insurance companies for allergy services that were reportedly performed by him, even though he was not licensed to practice medicine in the state of Georgia. The physicians would then pay Brown a percentage of the funds that they received from the federal government and those private insurance companies. Thankfully, none of Brown’s victims have been found to be seriously hurt or injured due to his fraud and dishonesty, however, the federal government says the case remains open.

The FBI helped conduct the investigation and a spokesperson for the Bureau had this to say about the case: “The FBI remains committed to investigating these types of health care fraud matters, to include fraud against private health care companies and [M]edicare fraud. Individuals such as Mr. Brown, who attempt to profit through such fraudulent schemes at the expense of others who truly rely on these programs for their health care will remain as the priority focus of the FBI’s health care fraud efforts.”

In addition to the health care fraud charges, Brown pled guilty to wrongful disclosure of patient information, which, under the Health Insurance Portability Accountability Act (HIPAA), carries potential criminal penalties, including a possible fine of between $50,000 and $250,000 along with a prison sentence ranging from one to ten years.

Wednesday, December 14, 2011

Houston Home Health Care Firms Break All the Rules yet Continue Raking in Money

According to a recent investigation conducted by the Houston Chronicle, Houston-based home health care firms are in constant violation of state and federal regulations, yet, tax-payer money is still being shelled out to cover their expenses. The home health care industry in Houston is racked with “deficiencies,” as they are called by the Texas Department of Aging and Disability Services, which can range from failure to ensure the proper dispensation of medication to suspicious billing practices.

The Chronicle highlighted the story of one Houston man, Craig O’Connor, who experienced first-hand the greed of the home healthcare industry in his city. A Houston hospital discharged O’Connor’s mother after a recommendation that she be treated by a home healthcare agency, which the hospital recommended. After the discharge, O’Connor’s mother’s home was bombarded with visits and calls from the recommended agency. “This was my first experience with Medicare and I quickly became alarmed about all the doctors and health aides who were practically falling all over themselves to schedule house calls to see my mother” said O’Connor.

The article noted that the home health care industry in Houston has earned nearly $400 million in Medicare money in 2010 alone and most of these billings are questionable. A previous investigation by the Chronicle found several private ambulance companies employing questionable and possibly fraudulent billing practices.

However, Medicare itself does not have much direct contact with these home healthcare companies. The Center for Medicare and Medicaid Services (CMS) is the governing body that houses the federal Medicare program. It delegates its licensing responsibilities to private companies, and in Texas, that agency is the Texas Department of Aging and Disability Services (DADS). DADS is responsible for monitoring the home health care companies to ensure they comply with all federal and state regulations. DADS officials say that it will continue to keep the pressure on the home healthcare industry and report any companies that are not complying with federal and state regulations.

There is a process by which DADS reports a healthcare company that is in violation of regulations. That company is first placed in the CMS termination track. The violating company has 90 days to correct the problems that resulted in the violation and DADS is responsible for checking for compliance after that 90-day probationary period has expired. Even though this process exists, the Chronicle notes that no one from CMS has ever personally investigated some of the suspicious practices occurring in Houston.

The billing practices are suspicious, but fraud investigators have had difficulty finding anything that would amount to a prosecutable offense. The Office of the Inspector General for the Department of Health and Human Services reported that fraud investigators had hit some major hurdles that “affected their ability to identify potential fraud and abuse.” Thus, while the practices in Houston raise eyebrows, nothing has been concretely identified as amounting to healthcare fraud. Still, the government should be keeping a watchful eye on the home healthcare industry in Houston, Texas.

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Friday, December 9, 2011

Medicare Cracking Down on Healthcare Fraud in Texas

Forbes Magazine reports that the Centers for Medicare & Medicaid Services (CMS) will be conducting a preventative audit in 2012, before it pays out any tax-payer money for cardiology and orthopedic procedures. This comes after years of criticism that CMS has followed a policy of writing checks first and asking questions later. In eleven states, Texas, Florida, California, Michigan, New York, Louisiana, Pennsylvania, Ohio, North Carolina, and Missouri, CMS is starting what it calls Recovery Audit Prepayment Review in January 2012, which will “allow Medicare Recovery Auditors (RACs) to review claims before they are paid to ensure that the provider complied with all Medicare payment rules.”

CMS’s announcement of its new crackdown affected Wall Street almost immediately. Medical stock dropped rapidly, according to an article in Bloomberg News, seeming to indicate that investors are worried that the new regulations will diminish the value of their stock. The Florida Chapter of the American College of Cardiology issued a statement in which it noted the grave consequences of CMS’s new, stricter regulations. It said:

Hospitals will not be paid 100% for [cardiac and orthopedic] admissions pending record review. There will be a 30-60 day period during which the hospital records will be reviewed for whether they support medical necessity for procedures which occurred during the stay…If the determination is made that records do not support necessity, then the entire hospital stay will be denied. The physicians will receive a form letter which will be entitled a ‘Take-Back Letter’ requiring return of any funds paid in conjunction with the affected hospitalization.

The states targeted by the review are those that are prone to Medicare fraud and those that have a history of short-term hospitalizations. CMS’s goal is to prevent error before it happens rather than following its traditional method of making payment first and then spending millions to recover the improper payments. While the medical community may be disappointed and the medical investors nervous, CMS seems to be doing what is necessary to protect taxpayer funds. With the current state of the healthcare industry, CMS’s decision to audit its payment procedures could not have come at a more opportune time.

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Monday, November 28, 2011

The FCPA is under attack

From today's WSJ:

For corporate America's top lobbyists, trying to curb a powerful antibribery law known as the Foreign Corrupt Practices Act has risen to the top of the agenda, sparking a widespread debate about how the legislation is enforced.  In the past five years, a remarkable run of enforcement of the U.S. law has led to about $4 billion in penalties against corporations. The law prohibits companies from paying bribes to foreign officials to win business. A violation can result in criminal prosecution.
Unlike the U.S., most countries have a culture of corruption. The FCPA, however, is a much-needed tool to keep American companies free of corruption when doing business abroad.  In my opinion, the FCPA is not used enough.  The chart to the right shows that while the DoJ has started to bring more FCPA cases, only two dozen cases were brought in 2010--a very small number.  

Fraud and corruption hurt honest businesses.  This quote from the WSJ sums it up: "U.S. authorities have said their goal is not only to prosecute FCPA violations but also to promote a level playing field in business transactions by eliminating corruption from the equation."