Friday, August 17, 2012

Texas dentist indicted

From the Texas Attorney General:
Dr. Michael David Goodwin, 63, an orthodontist who practices in Amarillo, Texas, and Crown Point, Indiana, has been charged in a federal indictment with 11 counts of health care fraud, alleging that he defrauded the Texas Medicaid program of approximately $1.5 million, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the indictment that was returned by a federal grand jury today, approximately 90 to 95 percent of Goodwin’s orthodontics’ patients were Medicaid beneficiaries. The Texas Medicaid program provides orthodontic services for Medicaid beneficiaries who fit the following criteria: 1) children who are 12 years old and older with severe handicapping malocclusions; 2) children who are up to 20 years old with cleft palate; or 3) other special medically necessary circumstances, including crossbite therapy and head injury involving severe traumatic deviation.

The indictment alleges that from January 2008 through March 2011, Goodwin devised a scheme to defraud the Texas Medicaid program by billing the program more than $2 million for services he claimed he provided, when in fact, as he well knew, some of the services were not medically necessary, or dental assistants provided those services when no dentist or orthodontist was present to supervise, and even when present, did not directly supervise or provide any services. As a result of this scheme, Medicaid paid more than $1.5 million for claims filed by Goodwin.
Click here for more.
We will be following this case closely and post court filings as they become available.  

Here is the indictment:

Tuesday, July 31, 2012

Interactive map of Texas physicians who accept Medicaid

From the Texas Tribune, click here for an interactive map showing the number of physicians who accept Texas Medicaid. 

Monday, July 30, 2012

All Smiles' version of "take the money and run"

From the Dallas Morning News
In a rare move, one of the largest dental providers in the Dallas area is systematically turning away thousands of its young Medicaid patients as it shutters its entire orthodontic operation by the end of the month.  All Smiles Dental Centers, a Dallas-based company, will close all 13 of its orthodontic offices after an audit of those operations by the state’s Medicaid program last fall.

The audit was part of a broader investigation into possible Medicaid fraud throughout Texas.  “We agreed to wind down our orthodontic offices and ended up dismissing about 12,000 patients in the Dallas-Fort Worth area,” Michael Lozich, All Smiles’ chief compliance officer, said Thursday.  “We’ve been trying to help them find new providers.”
 . . .
Dr. Christine Ellis, a Dallas orthodontist who audited Medicaid’s billing records for dental services, said Thursday she faulted the providers for their “truly unbelievable” and “not accidental” practices.
In April, she told a congressional committee investigating Medicaid fraud, “They only were interested in treating kids without real problems. Once they had them in braces, they delivered inefficient care and a whole lot of additional unnecessary appliances to increase their payment from Medicaid.”

Five years ago, Texas decided to pump $1.4 billion into dental services for indigent children.

Wednesday, July 25, 2012

Fiscal intermediaries -- paying the fox to guard the henhouse

Why is there so much fraud in the government health care programs?  In part because the government relies on private contractors to act as fiscal intermediaries.  Even the AMA recognizes, in its own cautious way, that fiscal intermediaries are failing the government and taxpayers.  From a recent AMA white paper:
Contractor Oversight

In addition to an overall reduction in the number of federal program integrity audits, the contractors that conduct these audits should be subject to vigorous CMS oversight. While the AMA has worked productively with CMS program integrity audit staff, in general, it appears that many contractors proceed without sufficient CMS guidance or ongoing supervision. 

For example, in June 2012, the Government Accountability Office (GAO) reported that over a five year period, the MIC [Medicaid Integrity Contractors] contractors cost $102 million and returned less than $20 million, resulting in an overall loss to the federal government of $82 million.  Following this report,  CMS committed to end the contracts of three of the five MIC contractors. While we welcome CMS’ response, this report is very troubling and signifies that there is a lack of appropriate oversight by CMS of program integrity auditors.

And see this nugget from the GAO:

The Centers for Medicare & Medicaid Services (CMS) estimated that $21.9 billion (8 percent) of Medicaid’s federal expenditures of $270 billion in fiscal year 2011 involved improper payments, the second highest amount reported by any federal program. Improper payments include those made for treatments or services that were not covered by program rules, that were not medically necessary, or that were billed for but never provided.  Since 2001, we have reported numerous times on improper payments and our concerns about the adequacy of fiscal oversight in Medicaid.  The challenges inherent in overseeing a program of  Medicaid’s size and diversity make the program vulnerable to improper payments.  Because of the program’s risk of improper payments, as well as insufficient federal and state oversight, Medicaid has been on our list of high-risk programs since January 2003.

Here is the AMA white paper.
Program Integrity White Paper

Here is the GAO study.
GAO National Medicaid Audit Program -- CMS Should Improve Reporting and Focus on Audi Collaboration With th...

And here is a recent US House Committee report showing that Medicaid fraud is spreading like cancer.
Uncovering Waste Fraud and Abuse in the Medicaid Program Final 3

Tuesday, July 24, 2012

The big Medicaid budget squeeze

Medicaid is an ever-growing volcano of cost to state governments, squeezing out programs such as education and infrastructure.  From our perspective, states are doing a terrible job prosecuting health care fraud, a major cause of the exploding cost to Medicaid. 
Created by Congress in 1965, Medicaid is hijacking state politics. Although the federal government covers a majority of costs (typically, 57 percent), the rapid rise in the states' share compels cuts in other programs or steeper taxes.  In the last decade, Medicaid spending has increased at nearly twice the rate of states' tax revenues, notes the Volcker-Ravitch report.
From the WSJ:
Rising Medicaid costs and pension expenses for public employees threaten states' abilities to provide basic government services as they continue struggling with unreliable tax bases in a weak economy, according to a task-force report.
Here is the full report.
Report of the State Budget Crisis Task Force Full

Here is an earlier report.
USA Inc. - A Basic Summary of America's Financial Statements

Monday, July 23, 2012

Texas has updated its Medicaid stats (the numbers keep growing)

Click here.

Bexar County, which is my count, had 250,000 people enrolled in Medicaid for the month of June. The total Bexar County population is 1,750,000 -- a ratio of 1 out 7. 

Another story on Texas Medicaid dental fraud


Wednesday, July 18, 2012

All Smiles CIA - another slap on the wrist

Below is the Corporate Integrity Agreement that All Smiles entered into on March 20, 2102.  For too many of these corporate owned dental mills, fines and fees seem to be just a pothole on the path to Medicaid millions.   To fraudsters like these, rules are for the little people. 

All Smiles Dental Center Inc 03202012(1)

Tuesday, July 17, 2012

This is your brain on Medicaid fraud

Watch the story.  Click here for the article. 


Monday, July 16, 2012

All Smiles Qui Tam Press Release

Based upon the interest in our qui tam case against Malouf and All Smiles, please see our press release below.  

Friday, July 13, 2012

Dr. Malouf . . . meet the Texas Attorney General

Click here for the story.  Hats off to the Texas AG.  But will the government let Malouf and his cohorts walk like last time?  Hope not because Texas Taxpayers and Texas kids deserve better.  

Friday, June 29, 2012

Our most recent dental Medicaid fraud case All Smiles and Dr. Malouf

People have been asking me about my recently unsealed and intervened dental Medicaid fraud case.  The petition that the State of Texas filed is below.

Click here and here and here for news and blogs.  

As alleged in the lawsuit by the State, clinics like the ones run by Malouf have cost taxpayers millions of dollars.  Where did your taxpayer dollars fo?  Click here for possible answers. 

Texans deserve better.  Taxpayers deserve to have their tax dollars spent well, not wasted.  Fortunately, lawyers from the Texas Attorney General's Office and its Civil Medicaid Fraud Division are on the case pursuing justice for Texans, taxpayers, and children.  Onward! 

Tuesday, June 5, 2012

More Texas dental Medicaid news

From the Houston Chronicle:
Most money goes for crowns.  Nearly 40 percent of restorative Medicaid-paid work performed on Texas children's primary teeth involves the use of stainless steel crowns, records show. And nearly 60 cents of every Medicaid dollar spent on primary teeth restorations goes for stainless steel crowns.
 Besides the extra expense, installing the crowns on small children sometimes requires general anesthesia or sedation (medication intended to relax a patient but not produce unconsciousness). Both carry risks of adverse reaction, overdose or other complications.
At least three young Medicaid patients have died and others have suffered brain damage while under anesthesia for crowns in recent years. 

Click here for the full story.  

And what exactly are we talking about?  Ever hear of the term "metal mouth"? Here is what some dentists are doing to poor Texas kids:

Thursday, May 31, 2012

Shockng: some politicians in the hip pocket of dental mills and private equity

Click here for the Bloomberg story.

Who is going to protect patients?  

Who is going to protect taxpayers?

Who is going to protect the profession?

Click here for a link to the North Carolina Dental Society's views on the bill.  Here is what is at the heart of this fight: big business joined with big government to dominate the market and squeeze out the little guy.  This excerpt sums up what's at stake:
Question: If a dental management corporation is operating illegally, isn’t it the responsibility of the State Board of Dental Examiners to investigate and take corrective action?
Yes; however, some of these corporations have disguised their later-proven-illegal actions, made false assertions and withheld documents to delay the progress of litigation. These actions have greatly increased the Board’s investigation and litigation costs.
It is the responsibility of the Board to investigate, address any violations, and prevent future illegalities by the dental management companies. This legislation gives them the tools and authority to effectively preserve the dentist/patient relationship and maintain a high quality of care.
In other words, the private equity firms want your tax dollars but they sure as Hell don't want accountability.   If these fat cats prevail, then taxpayers, patients, and solo practitioners are all screwed.   

See this piece about private equity gobbling up the dental market.  And who is footing the bill?  You, Mr. Taxpayer, through the Medicaid programs.  You know something fishy is going on when private equity goes after a market that is almost exclusively funded by a government program designed to help poor people.  

May 30, 2012 -- A growing number of private equity firms are investing in dental management companies, which they see as one of the few growth areas in the current economic recession.

Small Smiles is one of at least 25 dental management companies that have been bought or backed by private equity firms in the last decade, according to Thomas Climo, a Las Vegas dental consultant. These companies account for about 8% (12,000) of the dentists licensed in the U.S., he said.

Topspin and AUA Private Equity Partners, both New York-based equity funds, announced earlier this month that they had invested an undisclosed amount in Brighter Dental Care, a regional dental practice management company that operates and manages seven affiliated dental practices in New Jersey.
Last November, private equity investment firm JLL Partners paid $398 million to buy American Dental Partners (ADP). ADP is affiliated with 27 dental group practices, which have 282 dental facilities and about 2,400 operatories in 21 states.
And in 2008, the Audax Group bought a majority stake in Great Expressions Dental Centers, expanding the platform from about 100 practices to 152 locations.
Currently, there are 24 large dental practice management companies in the U.S., with annual revenues of more than $100 million, Climo said.
Private equity buyout firms have been attracted to dental practices because they are less regulated than physician groups, and patients often go to their dentists more regularly than to their doctor, according to Sandy Steever, an editor with Irving Levin Associates, a Norwalk, CT, publisher which tracks mergers and acquisitions in healthcare.
"They attract less scrutiny because dental services are seen as more peripheral than physicians' services," he told "In one sense, I think healthcare is noncyclical because it's a regular need. I have seen a lot of private equity getting into dental servicing companies."
Some of the firms have benefited from the increase in Medicaid payments for dental care, which rose 63% to $7.3 billion between 2007 and 2010, according to the U.S. Center for Medicare and Medicaid Services.
 Click here for the rest of the story.

Friday, May 25, 2012

Federal Agents Arrest NK Man In $20 Million Medicaid Fraud Scheme

Looks like dental Medicaid fraud isn't just a problem in Texas or the Southeast.  Looks like dental Medicaid fraud is systemic throughout the Medicaid programs.

From theNorthKingstonPatch  By Elizabeth McNamara May 24, 2012

Gary Anusavice, who used to live in East Greenwich, was barred from practicing dentistry in Rhode Island and Massachusetts in 2005.
Federal agents arrested Gary Anusavice, 59, at his home on Potter Road in North Kingstown Thursday morning in connection to a $20 million Medicaid fraud case in Connecticut.
In a story first reported by NBC Connecticut, federal agents raided dental offices in New Britain and Trumbull, Conn. Also arrested this morning was Mehran Zamani, DDS, 47, of Pound Ridge, N.Y.
“As alleged, these operators of dental practices throughout Connecticut defrauded the Medicaid program of more than $20 million over a two-year period,” said Connecticut U.S. Attorney David Fein.
“Although Gary F. Anusavice was barred from Medicare, Medicaid and other government health programs back in 1998, he allegedly continued to defraud taxpayers by using an elaborate shield of companies and individuals – including Dr. Zamani – to hide his involvement,” said HHS-OIG Special Agent in Charge Susan Waddle.
Anusavice is also known as “Gary Andrews,” “Gary Andrus” and “Gary Francis." His Potter Road property is under the jurisdiction of the court, according to officials.
In November 2005, Anusavice was barred from practicing dentistry in Rhode Island, and the Massachusetts Board of Registration in Dentistry permanently revoked Anusavice’s license to practice dentistry in Massachusetts in 2006.
In 2010, he agreed to pay $237,500 in fines over allegations he illegally financed dental work, pressured patients into signing up for financing, and failed to treat people or performed substandard work.
In July 1997, Anusavice was convicted in Massachusetts for submitting false health care claims, a felony.  Based on that conviction, the U.S. Department of Health and Human Services notified Anusavice in April 1998 that he was being excluded from participation in Medicare and state health care programs, including Medicaid. As part of that notice, Anusavice was informed that, as an excluded individual, he may not “submit claims or cause claims to be submitted” for payment from the federal Medicaid program. 
The criminal complaint alleges that Anusavice established several dental practices in Connecticut, which were operated by other dentists, including Zamani. These dental practices received millions of dollars in Medicaid reimbursements from the Connecticut Medicaid program, which payments were prohibited given Anusavice’s exclusion from the Medicaid program.
The dental practices operated by the two men included Landmark Dental in West Haven, Dental Group of Connecticut in Trumbull, and Dental Group of Stamford. Despite his permanent exclusion, according to the U.S. Attorney's office, Anusavice was involved in reviewing patient charts, suggesting dental procedures to be performed, reviewing billing records, reviewing income reports, interviewing and hiring dentists, and providing overall management direction to the offices.
According to Fein, Anusavice hired Zamani at Landmark Dental in October 2008. It's alleged that Zamani soon became aware of ANUSAVICE’s disciplinary history. In January 2009, Zamani submitted a Medicaid Provider Enrollment Application with the DSS in order to obtain a Medicaid provider number for Mehran Zamani LLC, listing his group practice name as Landmark Dental.  In May 2009, Zamani submitted an application with the DSS for a Medicaid provider number for Landmark Dental. In the applications Zamani submitted, he failed to disclose that Anusavice had an ownership or control interest in Landmark Dental, even though Zamani knew that Anusavice was running the practice and profited from it. From approximately February 2009 to March 2011, Mehran Zamani LLC and Landmark Dental received more than $12.9 million in Medicaid reimbursement payments.
The government alleges in April 2009, Zamani and “Haven Consulting,” an entity Anusavice created, entered into a contract for the Dental Group of Stamford, a practice that Zamani had operated previously. Although the contract provided that Haven Consulting was a “business consultant” to the Dental Group of Stamford, Anusavice had an ownership interest in the practice and acted in an ownership and managerial capacity. From approximately June 2009 to March 2011, the Dental Group of Stamford received more than $4.4 million in Medicaid reimbursement payments.
The case also states that Zamani’s April 2010 DSS application for a Medicaid provider number for the Dental Group of Connecticut also failed to disclose ANUSAVICE’s involvement in the practice.  From approximately August 2010 to March 2011, the Dental Group of Connecticut received more than $3.5 million in Medicaid reimbursement payments.
In total, it is alleged that the Anusavice-Zamani entities collectively received nearly $21 million in Medicaid reimbursement funds. Further, according to Zamani’s accountant’s records, between February 2009 and March 2011, Anusavice-controlled entities received more than $3 million in payments from Zamani-related entities.
Anusavice and another dentist are also accused of operating a new set of dental clinics doing business as Alpha Dental Group in Cromwell, Conn., Dental Group of New Britain, Conn., and Hartford (Conn.) Dental Care. Between November 2011 and March 2012, Arbor Dental has received more than $2.6 million in Medicaid funds. Anusavice also has recently reopened a dental practice at the former location of Dental Care of Connecticut in Trumbull.

Friday, May 18, 2012

Bloomberg's story about private equity and dental abuses has legs

The Bloomberg story has really struck a nerve (I'm sure the bad guys will be complaining that the press is engaged in over-treatment and excessive coverage--well, at least you aren't strapped down in a papoose board as the press sheds some sunlight on harm being caused to kids).  It will be interesting to see which dentists with a conscience and a spine will step up and blow the whistle.  

I've re-posted some of the comments to the Bloomberg story below.

The story was also linked at these sites:

Comments posted on Bloomberg's site:
I practiced dentistry for the better part of 25 years as a dedicated, post grad educated dental hygienist.  The rationalized fraud at all levels was astonishing--and is massive.  Private practice, public health dentistry... it's all the same.  Finally, I could not stomach the unethical behavior any longer, and retired to work in health education.  The dental profession rips off its employees, overcharges patients regularly, uses "fear" words to pressure patients into accepting questionable treatment.  If as an auxiliary you do not go along with the "selling" of the treatment plan, the dentist gets rid of you.  There is plenty of need in the community, appallingly so, but organized dentistry is, believe me, all about the money.
As a physician, I can barely count the egregious breaches of practice standards enumerated here.  Can you say "malpractice" (violation of the standard of care)?  How about assault (physical harm without consent)?  I graduated with debts and still recall what an instructor told me, "be honest, do good, communicate with the patient; the income will follow".  Words to live by, they've served me well.
So long as there are lightly (or none at all) monitored government (or corporate) coverage programs, abuse will follow.  Student debt is not a factor here; greed is.  Licensing has a purpose, one of which is to protect the public from harm from practitioners like these.  Just because one in two Americans has unmet dental needs, doesn't excuse these types of actions in the name of public health.  I'd say shame on them, but it is obvious they have no shame. 

It doesn't sound like appropriate treatment even with consent.  I am sure that parents even, if poor, don't intend to have their children held down in pain while they have teeth pulled.  If that were my child, I would be absolutely livid.  My children don't need medical care of any kind in a school setting.  I take them to the doctor or dentist as needed or recommended.  For those who can't afford to take their children in, I can understand, but they should still be present to ensure that propper care is taken.  Lesson learned, if my children have any event like this at school, I will be keeping them home to avoid any confusion.
Govt. funded healthcare (Medicaid) = minimal oversight.  For-profit insurers have virtually nil provider fraud, since they are reluctant to pay for anything at all.
This country is slipping into chaos.

Thursday, May 17, 2012

Dental Abuse Seen Driven by Private Equity Investments

Click here for a great article by Bloomberg discussing how private equity firms have moved big time into the Medicaid market.  We've seen horrendous abuses.  Patients suffer, taxpayers are ripped off, and, if the average dentist doesn't wake up, the profession will be ruined (the quaint days of a dentist owning his own shop will be over unless the unlawful corporate practice of medicine is stopped).

Below is an excerpt.
Isaac Gagnon stepped off the school bus sobbing last October and opened his mouth to show his mother where it hurt.  She saw steel crowns on two of the 4-year-old’s back teeth. A dentist’s statement in his backpack showed he had received two pulpotomies, or baby root canals, along with the crowns and 10 X-rays -- all while he was at school. Isaac, who suffers from seizures from a brain injury in infancy, didn’t need the work, according to his mother, Stacey Gagnon.

“I was absolutely horrified,” said Gagnon, of Camp Verde, Arizona. “I never gave them permission to drill into my son’s mouth. They did it for profit.”
Isaac’s case and others like it are under scrutiny by federal lawmakers and state regulators trying to determine whether a popular business model fueled by Wall Street money is soaking taxpayers and having a malign influence on dentistry.
Here is a chart that ran with the story:

Medicaid's Dental Boom

Friday, May 4, 2012

Sen. Grassley blows the whislte on the IRS Whistleblower Program

Sen. Grassley calls out the IRS Whistleblower Program.  See his scathing letter below.  When the program was enacted in 2007, we had high hopes that the program would protect honest taxpayers and go after tax cheats.  But the program has been a miserable failure. 

Tuesday, May 1, 2012

Back to blogging

Thanks for all the emails.  I was wrapped up in a case but will start blogging again starting today.  Over the next few weeks I will focus on Medicaid fraud and violations of the FCPA.

Friday, March 9, 2012

Forbes reports the IRS Whistleblower Program is broken

The problem with the IRS whistleblower program isn’t the 2006 law or the quality of whistleblower information that the IRS is receiving.  The IRS Whistleblower Office reports that it has received dozens of whistleblower submissions concerning matters involving tax losses greater than $100 million and thousands involving tax underpayments that exceed $2 million. The real problems are the IRS itself and institutional resistance to whistleblowers within the IRS that is hobbling the whistleblower program and draining its enormous promise.
The anti-whistleblower attitude was succinctly expressed by former IRS Chief Counsel Donald Korb shortly after he left the IRS and joined a white collar law firm that defends companies against the IRS. In a 2010 interview with the publication Tax Notes, he said:
“The new whistleblower provisions Congress enacted a couple of years ago have the potential to be a real disaster for the tax system. I believe that it is unseemly in this country to encourage people to turn in their neighbors and employers to the IRS as contemplated by this particular program. The IRS didn’t ask for these rules; they were forced on it by the Congress.”

Thursday, March 8, 2012

REVERENTIA LEGUM--Army Lawyers getting serious about medical business ethics.

Is the Army Medical Command finally getting serious about business ethics.  Looks like the lawyers have been busy.  See the Journal below, which appears well done.  Obviously a lot of thinking and late nights were required to produce this product. God bless the JAG Corps.  REVERENTIA LEGUM!

World wide pharma trying to clean up its act -- good luck with that!

The global pharmaceutical industry changed up its code of practice Thursday, but not before some high-profile settlements in the U.S. for breaking its foreign-bribery law.
The Geneva-based International Federation of Pharmaceutical Manufacturers and Associations said Thursday it expanded its practice code to cover all interactions with health-care professionals, medical institutions and patient organizations, including a ban on doctors from receiving payments to attend conferences.
This comes at a time when the association’s members are trying to drum up business in developing countries, some of which have state-run health systems. Employees of such systems, including doctors and nurses, can be considered foreign officials under the U.S. Foreign Corrupt Practices Act, a 1977 law that bars bribing foreign officials for business purposes.
To that end, the Securities and Exchange Commission and the Justice Department are in the midst of a sweep of the industry. In April 2011, Johnson & Johnson agreed to pay $70 million to resolve violations, and The Wall Street Journal reported in November 2011 that Pfizer Inc. will pay more than $60 million when its settlement gets finalized.
Both companies, the Journal reported, ratted on their competitors.  Those competitors included AstraZeneca, Merck & Co., Bristol-Myers Squibb Co., GlaxoSmithKline PLC and others that have disclosed investigations for possible FCPA breaches. Eli Lilly & Co. was in advanced talks in April 2011 with the Justice Department, and the company said Feb. 24 in its annual results it’s at the same level with the SEC.
Letters of inquiry to several of the companies, dating back more than a year, laid out several types of of possible violations: bribing government-employed doctors to purchase drugs; paying company sales agents commissions that are passed along to government doctors; paying hospital committees to approve drug purchases; and paying regulators to win drug approvals.
And the companies aren’t just facing charges in the U.S.: AstraZeneca said in November 2011 it was indicted in Serbia over employees allegedly making improper payments to physicians at Institute of Oncology and Radiology of Serbia. A spokesman said at the time the company had filed motions to dismiss the charges.
The federation, which goes by the acronym IFPMA, is led by David Brennan, an American who is also chief executive of AstraZeneca.
Brennan announced in May 2011 that AstraZeneca would no longer pay for doctors to attend conferences, something he said to Dow Jones Newswires caused him “to take it to the IFPMA, to have them consider what the next level of agreement should be, from an industry perspective.”
He acknowledged in the interview with Newswires that as health-care costs have risen worldwide, so too have concerns about financial ties between doctors and drug makers.
The non-profit investigative news outlet ProPublica has been running stories since October 2010 in a series called “Dollars for Docs” about how industry money makes it into the hands of physicians.
“We’re trying to earn society’s trust in doing what we’re doing, because I think that trust has been broken,” Brennan said in the Newswires interview. “So when you put it into the context of how society perceives us and what can we do about it, I think a lot of companies recognize that we shouldn’t have a minimum standard but have something that goes above that.”
More from the interview with Newswires is here. Read the new code of practice below:
IFPMA Code of Practice 2012                                                           

Wednesday, March 7, 2012

Update on Major (Dr.) Jason Davis - - US Army - Boston Scientific health care fraud

I've blogged in the past about U.S. Army Major (Dr.) Davis -- who is a convicted criminal yet remains on active duty with the Army.   

Recently, the State of Washington, Department of Health Medical Quality Assurance Commission suspended his medical license on probation for up to 24 months.  

Some of the allegations against Davis included:
In violation of federal law and Army regulations, [Major Davis] accepted a salary, meals, wine, alcohol, travel, and entertainment from a wholly-owned subsidiary of Boston Scientific, a manufacturer of cardiac rhythm management devices.  Specifically, Respondent was paid an illegal salary by Boston Scientific to conduct training during surgery that [Major Davis] performed as part of his official duties as an Army cardiologist.  

In response to the allegations concerning [Major Davis], the Department of Defense and US Army initiated an investigation of Boston Scientific.  In October 2010, Boston Scientific's subsidiary reached a settlement with the US Attorney in which the company agreed to pay the United States $600,000.  The settlement agreement was premised on the US Attorney's allegations that Boston Scientific's subsidiary had provided gratuities and payments to Respondent "for or because of official acts that [the company] hoped [Respondent] would perform or had performed related to [Madidan's] purchase of [the company's] products."
Let me know if you have FOIAed the Army's investigation.  Let me know whether the Army has initiated involuntary separation of Major Davis?

I'll post the other documents later. 

Lesson learned: 
  • The Army must scrupulous monitor its relationships with industry.  
  • Lesson to military docs: these companies are giving you things not because you are a good doc, but because you are merely a tool that a company uses to make money, more money than you could imagine.  
  • And remember, it was a whistleblower, another Army doc, who broke this story. Without his courage, this would have never seen the light of day.
Below are pleadings from the St. of Washington Dept. of Health. 
Stmt of Allegations - St. of Wash. v. Major Davis
Stipulation to Informal Disposition -- St. of Wash. v. Major Davis

Tuesday, March 6, 2012

Just finished reading "No One Would Listen"

I just finished No One Would Listen, A True Financial Thriller by Harry Markopolos, who reported to the SEC that Bernie Madoff was running the world's largest Ponzi scheme.  The SEC blew off Markopolos' reports and failed to stop Madoff from stealing billions of dollars from investors, hence the title of the book.  Perhaps the most valuable contribution of Markopolos' book is to show that the executive branch is simply ineffective at enforcing the laws Congress passes.  Into that breach whistleblowers have a valuable role to play in protecting investors, Medicare, and other government programs.       

Monday, March 5, 2012

Health care fraud in the news again

It's fascinating to see the press finally starting to pick up on the fact that health care fraud in the U.S. is the biggest fraud play in the world.  Tens of billions of U.S. tax dollars are lost every year through fraud.  

Click here for last Thursday's episode of the Diane Rehm show discussing a recent health care fraud scam in Texas where hundreds of millions of dollars were stolen by one doctor.

Click here to listen to the show. 

One wonders when our politicians are ever going to get serious about the problem.  I've also wondered why honest doctors and health care companies are so tolerant of health care fraud.  The system is so corrupt that if things keep going we are going to end up with a government-run health care program.  You would think the AMA and various trade groups would want to avoid that.  A third-party payor system with reimbursement per procedure with no government accountability is unsustainable.  And for the fraudsters, it's low hanging fruit.  Whistleblowers can only do so much.  The industry needs to police its own . . . but don't bet the house on it. 

Saturday, March 3, 2012

The press is cathcing on -- South Texas has health care fraud is a problem

The press is finally catching on that South Texas is a hotbed of health care fraud.  Click here for a story from the The Monitor, which serves the Rio Grand Valley.  The first step to sobriety is admitting you have a problem.  It's been my observation that most of the health care providers in South Texas simply want to ignore the problem that is all around them.  They do so at their peril. 

Thursday, March 1, 2012

Health care fraud seems to have caught the attention of the media

Coach Tuberville sued for fraud

I try and keep this blog focused on fraud committed against the Government.  But yesterday I presented to the San Antonio chapter of the Construction Financial Management Association and encountered some skepticism about the merits of whistleblowing.  Too many people think that the leaders in our community can always be trusted.  And too many people think that Government agencies, such as the SEC, are vigilant in protecting investors.  It's been my experience that whistleblowers are the most effective tool to protect our free enterprise system.

One of the highest paid and respected employees of the State of Texas, Coach Tommy Tuberville, (and yes he is a public employee) has been sued for fraud, in particular, violations of the Securities Exchange Act.  Whether its true or not is for a judge and jury to decide.  At this stage, we have assume Coach Tuberville did not commit the acts alleged in the lawsuit and I hope he actually did not.   

While the investors in the case have recourse in federal court, ever since Madoff, you have to wonder whether the SEC is up to the task of protecting investors. But it looks like the National Futures Association has taken action (see below). 

Tommy Tuberville has been listed in a federal suit that alleges the former Auburn coach and his partner defrauded investors out of more than $1.7 million.  The complaint, filed Friday afternoon in the in U.S. District Court in Montgomery, claims Tuberville and TS Capital co-founder John David Stroud "employed devices, schemes, and artifices" to commit fraud. Seven plaintiffs from Alabama and Tennessee are seeking damages against the Auburn-based investment company.

Here is the lawsuit:

Is Sen. Snowe's husband the target of a qui tam case?

Originally filed in April 2007 by a pair of whistleblowers, the lawsuit alleges that the company violated a federal law that prohibits schools from paying admissions officers based on the number of students they recruit and enroll. Those numbers can affect a school’s revenues because more students mean a school is potentially eligible for more federal aid dollars. The whistleblowers alleged, and provided documents indicating, that they were paid bounties for the number of students they enrolled.
The Justice Department’s decision to intervene on Aug. 8 made the lawsuit, which had been under seal, public. In its complaint, Justice alleged that Education Management Corp. submitted “knowingly false, misrepresented, and/or improper certifications” to the Education Department, stating that it did not offer enrollment incentives to its admissions officers. Without those certifications, students enrolling at the the company’s schools, which include Argosy University, Brown Mackie College and South University, would not be eligible for federal financial aid. The complaint names Snowe’s husband, noting that in December 2006, while he was the company’s chief executive officer, McKernan personally signed certifications that Education Management Corp.’s schools complied with the ban on offering compensation to admissions officers based on the number of students they recruit.

Here is the qui tam complaint, to which the DoJ intervened.

Monday, February 27, 2012

DoJ using the Espionage Act to prosecute whistleblowers

From today's NYT.  Here is an excerpt:
The Espionage Act, enacted back in 1917 to punish those who gave aid to our enemies, was used three times in all the prior administrations to bring cases against government officials accused of providing classified information to the media.  It has been used six times since the current president took office.

Pennsylvania dentist arrested for drug and Medicaid fraud

A report in the Observer-Reporter mentioned how one Washington County, Pennsylvania dentist, who allegedly prescribed more than 6,600 narcotic pain killers to seven patients, was recently arrested by state narcotics and Medicaid fraud agents.

Dr. Charles Kokoska, was charged by the state attorney general's office.  According to the criminal complaint, between January 2009 and October 2010 Dr. Kokoska wrote more than 300 prescriptions for more than 6,600 narcotic pain killers to at least seven different patients.

The prescriptions were written for the powerful prescription pain killers Oxycodone, Hydrocodone, and Propoxyphene and filled at various pharmacies in Allegheny, Fayette, Greene and Washington counties. Kokoska also wrote prescriptions for Diazepam, a generic form of Xanax, commonly used to treat anxiety.

Dr. Kokoska is charged with seven counts of prohibited acts by medical professional and two counts of provider prohibited acts. He was arraigned before Brownsville Magisterial District Judge Joshua Kanalis and released on $25,000 unsecured bail.

Friday, February 24, 2012

Dentist who used paperclips for root canal sentenced to jail time

According to a recent report by the Associated Press, Dr. Michael Clair, a former dentist who substituted paper clips for stainless steel posts in root canals, was sentenced to one year in jail on Monday.

Clair pleaded guilty earlier this month to charges including assault and battery, illegally prescribing medication, witness intimidation and defrauding Medicare of $130,000.

Prosecutors say that Clair sometimes used pieces of paper clips while performing root canals. This caused infections and other problems in patients.

One woman said her teenage son's tooth turned black and had to be removed after Clair gave him a root canal in 2005.

"He put my kids in pain for months ... I hope he rots there," said Brenda Almeida after Judge Richard Moses sentenced Clair to a year in the Bristol County House of Correction.

Prosecutors had asked for a sentence of five to seven years, but Judge Richard Moses gave Clair two-and-a-half years, with all but one year suspended, plus five years of probation. The judge said he considered Clair's lack of a criminal record, "certain mental health issues" and acceptance of responsibility in handing down the sentence.

In a statement Massachusetts Attorney General Martha Coakley said Clair fraudulently billed Medicare for stainless steel posts while using office supplies on his patients to save money. Prosecutors said Clair was suspended by Medicaid in 2002 but continued to file claims between August 2003 and June 2005 by using the names of other dentists in his practice.

"The defendant physically and emotionally harmed his patients by taking advantage of the trust they placed in him as their dentist," Coakley said in a statement. "Mr. Clair brazenly cheated the Medicaid program and defrauded taxpayer dollars, billing for health care services he did not provide."

Prosecutors requested that Clair be ordered to stay away from his victims and seven people who worked in his office because former staff members "have expressed concern for their safety." Judge Moses granted the request.

Watch the video below:

Hat tip to Dentist The Menace.