Archive for 2013

Sharon Iglehart, a Houston Doctor, Indicted for Her Alleged Role in $158 Million Medicare Fraud Scheme

A Houston doctor has been arrested on charges related to her alleged participation in a $158 million Medicare fraud scheme involving false claims for mental health treatment.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office, Special Agent in Charge Mike Fields of the Dallas Regional Office of the Department of Health and Human Services Office of the Inspector General (HHS-OIG) and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.

Sharon Iglehart, 56, of Houston, was charged in an indictment, filed in the Southern District of Texas and unsealed today, with one count of conspiracy to commit health care fraud and four counts of health care fraud. If convicted, Iglehart faces a maximum penalty of 10 years in prison on each count. Iglehart was arrested on Dec. 16, 2013, and made her initial appearance in federal court in Houston today.

According to the indictment, Iglehart allegedly participated in a scheme to defraud Medicare beginning in 2005 and continuing until May 2012. The defendant allegedly caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services to Medicare through a Houston hospital. A PHP is a form of intensive outpatient treatment for severe mental illness.

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Ruben Busquets, of Miami, Pleads Guilty to $63M Health Care Fraud

A former licensed mental health counselor at the defunct health provider Health Care Solutions Network Inc. (HCSN) pleaded guilty today in Fort Lauderdale, Fla., for his role in a $63 million health care fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.

Ruben Busquets, 50, of Miami, pleaded guilty before U.S. District Judge William J. Zloch in the Southern District of Florida to one count of conspiracy to commit health care fraud. He faces a maximum penalty of 10 years in prison when he is sentenced on Feb. 20, 2014.

According to court records, Busquets was employed as a licensed therapist at HCSN, a mental health facility that purported to provide Partial Hospitalization Program (PHP) services. A PHP is a form of intensive treatment for severe mental illness. HCSN of Florida (HCSN-FL) operated community mental health centers at two locations. Court records indicate that Busquets was aware that HCSN-FL personnel were routinely fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN-FL for purported PHP treatment and were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Florida Medicaid. During his employment at HCSN-FL, Busquets and his co-conspirators signed fabricated PHP therapy notes and other medical records used to support false claims to government-sponsored health care programs.

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Northrop Grumman Corp. Pays $11.4 Million to Resolve Allegations That It Improperly Charged Costs to Government Contracts

The Justice Department announced today that Northrop Grumman Corp. has paid the United States $11.4 million to settle a government claim for penalties provided under the Federal Acquisition Regulation (FAR)  and False Claims Act allegations stemming from its failure to abide by a 2002 settlement agreement with the Defense Contract Management Agency (DCMA).  The government alleged that Northrop charged to its federal contracts certain costs for deferred compensation awards to key employees, even though it had promised not to do so as part of the earlier 2002 settlement.

“Federal contractors must abide by the obligations they accept when contracting with the government, including compliance with federal regulations restricting the types and amount of costs they can charge to their federal contracts,” said Assistant Attorney General for the Department of Justice’s Civil Division Stuart F. Delery.  “The Department of Justice is committed to enforcing these fundamental obligations using every available tool, including FAR penalties assessed under the contract and, where appropriate, fraud-based counterclaims.”

Northrop had agreed in its 2002 settlement with DCMA that it would limit the amount of deferred compensation it would include in proposals for subsequent contracts.  The government’s contracting officer found that Northrop had failed to honor this commitment and should be assessed a penalty equal to twice the amount of the unallowable costs claimed.  Northrop challenged the decision in a complaint filed in the U.S. Court of Federal Claims in Washington, D.C.  The Department of Justice responded to the suit with counterclaims alleging that in addition to the FAR penalties, Northrop also had violated the False Claims Act by passing along these unallowable costs to the government in indirect rates applicable to hundreds of 2004 contracts with the government.  The government alleged that as a consequence of Northrop’s knowing misrepresentations, it was induced to pay more than $1.9 million in unallowable costs in thousands of vouchers and invoices.

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Government Intervenes in False Claims Lawsuit Against IPC the Hospitalist Co. Inc. Alleging Overbilling of Physician Services

The government has intervened in a lawsuit against IPC The Hospitalist Co. Inc., and its subsidiaries (IPC), alleging that IPC submitted false claims to federal health care programs, the Justice Department announced today.  IPC, based in North Hollywood, Calif., is one of the largest providers of hospitalist services in the United States, employing physicians and other health care providers who work in more than 1,300 facilities in 28 states.  Hospitalists are physicians who work only in hospitals and other long-term care facilities, overseeing and coordinating inpatient care from admission to discharge.

The lawsuit alleges that IPC physicians sought payment for higher and more expensive levels of medical service than were actually performed – a practice commonly referred to as “upcoding.”  Specifically, the lawsuit alleges that IPC encouraged its physicians to bill at the highest levels regardless of the level of service provided, trained physicians to use higher level codes and encouraged physicians with lower billing levels to “catch up” to their peers.

“We continue to be vigilant in our enforcement efforts to ensure that health care programs funded by the taxpayers pay only for appropriate costs,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.

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Three Patient Recruiters for Carring Nurse Home Health Care Corp,a Miami Home Health Company, Plead Guilty for Roles in $48 Million Scheme

Three patient recruiters for a Miami health care company pleaded guilty today for their participation in a $48 million home health Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.

Miami residents Marianela Martinez, 45; Omar Hernandez, 48; and Celia Santovenia, 49, pleaded guilty before U.S. District Judge Donald L. Graham in the Southern District of Florida to one count each of conspiracy to receive health care kickbacks. Sentencing has been scheduled for Feb. 11, 2014.

According to court documents, Martinez, Hernandez and Santovenia were patient recruiters who worked for Caring Nurse Home Health Care Corp., and Santovenia also worked for Good Quality Home Health Care Inc. Caring Nurse and Good Quality were Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.

From approximately January 2006 through June 2011, the defendants would recruit patients for Caring Nurse and/or Good Quality and would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse and/or Good Quality in return for allowing the agency to bill the Medicare program on behalf of the recruited patients. These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.

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CVS Will Pay $4.25 Million for Allegedly Denying Medicaid Claims for Reimbursement of Prescription Drug Costs

Caremark LLC, a pharmacy benefit management company (PBM), will pay the government and five states a total of $4.25 million to settle allegations that it knowingly failed to reimburse Medicaid for prescription drug costs paid on behalf of Medicaid beneficiaries, who also were eligible for drug benefits under Caremark-administered private health plans, the Justice Department announced today.  Caremark is operated by CVS Caremark Corp., one of the largest PBMs and retail pharmacies in the country.  A PBM administers and manages the drug benefits for clients who offer drug benefits under a health insurance plan. 

Under the terms of the agreement, the government will receive approximately $2.31 million.  In addition, five states — Arkansas, California, Delaware, Louisiana and Massachusetts — will share $1.94 million. 

“It is vitally important that cash-strapped Medicaid programs receive reimbursement for costs they incur that should have been paid for by other insurers,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “We will take action against those who seek to gain at the expense of Medicaid or other federal health care programs.”

Caremark served as the PBM for private health plans that insured a number of individuals receiving prescription drug benefits under both a Caremark-administered plan and Medicaid.  When an individual is covered by both Medicaid and a private health plan, the individual is called a “dual eligible.”  Under the law, the private insurer, rather than the government, must assume the costs of health care for dual eligibles.  If Medicaid erroneously pays for the prescription claim of a dual eligible, Medicaid is entitled to seek reimbursement from the private insurer or its PBM, in this case Caremark. 

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Ensign Group Inc. a Skilled Nursing Facility Based in Mission Viejo, Calif. to Pay $48 Million to Resolve Allegations That Six Facilities Billed for Unnecessary Therapy

The Ensign Group Inc., a skilled nursing provider based in Mission Viejo, Calif., that operates nursing homes across the western U.S. has agreed to pay $48 million to resolve allegations that it knowingly submitted to Medicare false claims for medically unnecessary rehabilitation therapy services, the Justice Department announced today. Six of Ensign’s skilled nursing facilities in California allegedly submitted the false claims: Atlantic Memorial Healthcare Center, located in Long Beach; Panorama Gardens, located in Panorama City; The Orchard Post-Acute Care (a.k.a. Royal Court), located in Whittier; Sea Cliff Healthcare Center, located in Huntington Beach; Southland, located in Norwalk; and Victoria Care Center, located in Ventura.

“Skilled nursing facilities that place their own financial interests above the needs of their patients will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will continue to advocate for the appropriate use of Medicare funds and the proper care of our senior citizens.”

Between January 1, 1999, and August 31, 2011, these six Ensign skilled nursing facilities allegedly submitted false claims to the government for physical, occupational and speech therapy services provided to Medicare beneficiaries that were not medically necessary. Specifically, Ensign provided therapy to patients whose conditions and diagnoses did not warrant it, solely to increase its reimbursement from Medicare. The government further alleged that Ensign created a corporate culture that improperly incentivized therapists and others to increase the amount of therapy provided to patients to meet planned targets for Medicare revenue. These targets were set without regard to patients’ individual therapy needs and could only be achieved by billing at the highest reimbursement levels. The government also alleged that Ensign billed for inflated amounts of therapy it had not provided and that certain patients were kept in these facilities for periods of time exceeding what was medically necessary for treatment of their conditions.

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FreshPoint Inc. to Pay $4.2 Million for Overbilling the Department of Defense for Produce

The Justice Department announced today that FreshPoint Inc., a Houston, Texas-based food distribution company and wholly owned subsidiary of Sysco Corp., has agreed to pay $4.2 million to resolve allegations that it overcharged the Department of Defense for fresh fruit and vegetables purchased under 15 separate contracts. The contracts were awarded to East Coast Fruit Company and subsequently performed by FreshPoint following FreshPoint’s acquisition of East Coast Fruit Company in 2007.

“The Department of Justice is committed to ensuring the integrity of federal contracts and will pursue contractors that knowingly overcharge the government for goods or services,” said Assistant Attorney General for the Department of Justice’s Civil Division Stuart F. Delery. “Contractors that do business with the government must do so honestly and fairly or suffer the consequences of their misconduct.”

“This settlement demonstrates one of the many types of fraud inflicted upon the American taxpayers,” said U.S. Attorney for the Southern District of Georgia Edward Tarver. “The U.S. Attorney’s Office will honor our commitment to vigorously enforce the False Claims Act in order to protect the financial soundness of our nation and its military.”

The settlement resolves allegations that from Dec. 17, 2007, through Sept. 11, 2009, FreshPoint overcharged the government on hundreds of sales of fresh fruit and vegetables by improperly inflating its prices to the government to reflect FreshPoint’s view of the prevailing market price of the goods at the time of sale. The government alleged that this practice violated FreshPoint’s contracts with the government that required FreshPoint to provide the produce at cost, plus a pre-established mark-up for profit, and did not allow FreshPoint to make additional price adjustments based upon perceived changes in market prices.
The allegations arose from a lawsuit filed under the whistleblower provisions of the False Claims Act, which allow private individuals to sue on behalf of the government and to share in the proceeds of any settlement or judgment. The whistleblower in this case, former FreshPoint employee Charles Hall, will receive $798,000.

 This settlement was the result of a coordinated effort by the Justice Department’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Southern District of Georgia; the Defense Criminal Investigative Service; the Defense Contract Audit Agency and the Defense Logistics Agency Office of General Counsel. The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is captioned U.S. ex rel. Hall v. SYSCO Corp., et al., Case No: 4:11-CV-57 (S.D. Ga.).


James Hoyer Creative Director Premieres JFK Documentary

VCI_JFK_Biboard_43857.inddJames Hoyer Creative Director Larry Wiezycki is the director and editor of a fascinating, new PBS documentary about President John F. Kennedy’s visit to Tampa just days before he was assassinated.

JFK in Tampa: The 50th Anniversary premiered November 7th at the Tampa Theatre to a standing room only crowd and will air multiple times on PBS stations throughout Florida, including WUSF TV channel 16 in Tampa.

The one hour documentary is the culmination of a two year project on which Larry collaborated with Tampa producer and writer Lynn Marvin Dingfelder.

Larry Wiezycki - Creative Director

Larry Wiezycki, and Lynn Marvin Dingfelder at the premiere. Introduced by documentary narrator Frank Robertson

Capturing the Moment

The documentary team captured the stories of more than 50 people — dignitaries, members of the media, and average citizens who were touched by President Kennedy’s visit.

“It takes you back to November 18, 1963.  A time capsule of home movies, photos and stories told by those who were in Tampa on that special day 50 years ago,” Larry said.   “Our hope is to make you feel like you were there.  You’ll see the excitement ignited in Tampa by one of our country’s most charismatic presidents ever and learn a lot along the way, too.”


Larry Wiezycki and wife Kim at “JFK in Tampa: The 50th Anniversary” premiere at The Tampa Theatre

The documentary also serves as the foundation for a new exhibit opening on November 8th at the Tampa Bay History Center called “JFK in Tampa: The Exhibition.”

We are proud to congratulate Larry for such an amazing achievement!



Click on the video below to see a story about the documentary from WTSP TV in Tampa:


Overcoming a Rule 9(b) Challenge in the 11th Circuit

After a qui tam complaint is filed, the Department of Justice investigates the relator’s allegations and then decides whether to intervene and join the action, or whether to decline. If the government declines to join in the lawsuit, the relator and his or her counsel may decide to proceed forward with the case on their own.

So what are some of the challenges a relator faces when moving forward with a declined case?

If the government declines to intervene in a relator’s case, one of the challenges the relator may likely face if he or she decides to continue to litigate is a defendant’s motion to dismiss asserting failure to satisfy Rule 9(b). Claims brought under the False Claims Act must be stated with particularity pursuant to Rule 9(b) of the Federal Rules of Civil Procedure. Particularity means that “a plaintiff must plead ‘facts as to time, place, and substance of the defendant’s alleged fraud,’ specifically ‘the details of the defendant[‘s] allegedly fraudulent acts, when they occurred, and who engaged in them.” United States ex rel. Clausen v. Laboratory Corporation of America, 290 F.3d 1301, 1310 (11th Cir. 2002).

The consequences of a Rule 9(b) challenge depend on the law of the Circuit in which the relator’s complaint has been filed. For example, in the Eleventh Circuit defendants often argue that a complaint cannot survive Rule 9(b) scrutiny under the Clausen case and its progeny if there are no facts to support the allegations that false claims were presented to the Government. It is true that one way relators can satisfy Rule 9(b) is to identify specific false claims. However, even though some defendants attempt to assert otherwise, relators should note that the law in the Eleventh Circuit does not require that complaints identify specific false claims, only that they contain “some indicia of reliability” to support the allegation that false claims were submitted.  Clausen, at 1311.

In Clausen, the court held that the Rule 9(b) standard applies to claims brought under the False Claims Act and requires details of both the false claim and the submission of that claim.  Id. at 1311.  In dismissing the complaint because the relator—a corporate outsider who had never worked for the defendant—offered no “stated reason for his belief [that] the claims requesting illegal payments must have been submitted, were likely submitted, or should have been submitted to the Government,” the court determined that “some indicia of reliability must be given in the complaint to support the allegation of an actual false claim for payment being made to the Government.” Id. at 1311.  (emphasis added).  The court further explained that “indicia of reliability” can be found in the actual dates or dollar amounts of fraudulent submissions or even “second-hand information about billing practices.”  Id. at 1312.

Since the Clausen ruling, the Eleventh Circuit and the district courts have interpreted and applied the “some indicia of reliability” language to subsequent False Claims cases.  See Cade v. Progressive Cmty. Healthcare, Inc., 2011 WL 2837648 at *7 (“the Eleventh Circuit itself has moved away from Clausen’s most exacting language, accepting less billing detail in a case where particular allegations of a scheme offered indicia of reliability that bills were presented.” )  In Hill v. Morehouse Med. Assocs., Inc., 2003 WL 22019936 (11th Cir. Aug.15, 2003), it was determined that “Rule 9(b)’s heightened pleading standard may be applied less stringently … when specific factual information about the fraud is peculiarly within the defendant’s knowledge or control.” Id. at *4 (internal citations omitted).  The relator in Hill did not plead any specific details about how the defendants submitted false claims to the Government, but because she had been employed in the billing and coding department, she “was privy to [the defendant’s] files, computer systems, and internal billing practices that [were] vital to her legal theory,” and “witnessed firsthand the alleged fraudulent submissions.” Id. at *4–5.  Her allegations, therefore, possessed the necessary “indicia of reliability” to satisfy ClausenHill, at *4-5.

In United States ex rel. Walker v. R & F Properties of Lake County, Inc., 433 F.3d 1349 (2005), the court ruled that in cases involving a corporate insider with particularized information regarding the alleged fraudulent schemes, Rule 9(b) can be satisfied without identifying any individual false claims. There is no requirement that actual hospital records be attached to the complaint. Walker involved a nurse practitioner who had worked for the defendant, and the complaint did not plead with particularity that the defendant had submitted a false claim.  Id. at 1360.  Instead, the relator’s beliefs were inferred from the circumstantial evidence of the defendant’s billing practices combined with conversations between the relator and other employees of the defendant.  Id.   Finding that the complaint survived Rule 9(b) scrutiny, the court distinguished Walker from Clausen because, among other things, the Walker relator was not a corporate outsider, and that the nature of her employment with the defendant gave rise to allegations that were “sufficient to explain [why] she believed” the defendant submitted false claims for services.  Id.; see also U.S. ex rel. Matheny v. Medco Health Solutions, Inc., 2012 WL 555200, at *10 (11th Cir. 2012) (interpreting Walker to hold that “we are more tolerant toward complaints that leave out some particularities of the submissions of a false claim if the complaint also alleges personal knowledge or participation in the fraudulent conduct.”).

It is true that identification of the specific false claims submitted is extremely beneficial to the success of a relator’s case. Yet, relators for various reasons may not be in possession of documents or other evidence that constitute or identify the actual false claims submitted. A relator does not have to automatically abandon his attempt to litigate a case simply because he does not have copies of the specific false claims submitted by the defendant.  If a relator can satisfy the indicia of reliability standard, then he can survive a Rule 9(b) challenge by the defendant and he can continue to pursue his case.

If you believe you have information regarding fraud against the government and are considering bringing a False Claims Act case, please contact James Hoyer for an evaluation of your claims. Click here for more information about the firm and to submit your information electronically, or you may contact our office at 813-397-2300.