Posts Tagged ‘Medicare’

Cherry Hill Doctor And Son Admit Defrauding Medicare, Agree To $1.78 Million Settlement

A doctor and his chiropractor son admitted conspiring to defraud Medicare by using unqualified people to give physical therapy to Medicare recipients, Acting U.S. Attorney William E. Fitzpatrick announced.

Robert Claude McGrath D.O., 65, and his son Robert Christopher McGrath, 47, both of Cherry Hill, New Jersey, each pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to separate informations charging them each with conspiracy to commit health care fraud.

The McGraths, together with their practice, the Atlantic Spine & Joint Institute, have also agreed to pay $1.78 million as part of a civil settlement to resolve allegations that they illegally billed Medicare for those treatments.

“Elderly patients who need physical therapy deserve properly licensed and supervised caregivers,” Acting U.S. Attorney Fitzpatrick said. “Instead, the McGraths for years used unqualified and unsupervised employees to treat their patients, all while fraudulently billing Medicare for the phony services.”

Read the rest of the story from the Department of Justice here.


Prime Healthcare Loses Motion to Dismiss: Whistleblower Case Moves Forward

A blow was dealt to Prime Healthcare as a California federal court issued three rulings denying motions filed on behalf of the hospital corporation. As a result, an important whistleblower case, alleging Prime inappropriately admitted patients to increase profits, will move forward.

“This is a very important ruling,” said James Hoyer Law Firm Partner Elaine Stromgren, who represents whistleblower Karin Berntsen, a Prime employee. “The evidence, supporting Ms. Berntsen’s and the government’s allegations, is very strong,” added Stromgren.  Ms. Berntsen is Director of Performance Improvement at Alvarado Hospital Medical Center in San Diego.

Prime Healthcare is one of the fastest growing hospital corporations in the country, which operates more than 40 hospitals in 14 states. The company is known for using aggressive tactics to buy underperforming, financially distressed hospitals and then implementing cost-cutting measures to make money.

According to the government, “Defendants implemented a scheme to maximize revenues by improperly admitting Medicare patients into the hospital who should not have been admitted so that they could charge Medicare three to four times what they would have been able to charge had the patients merely been observed in the hospital and allowed to go home,” U.S. Magistrate Judge Patrick Walsh of the Central District of California explained in his order.

The Court noted that the government alleges Prime’s founder and Chief Executive Dr. Prem Reddy used several tactics to improperly influence the medical decisions of the doctors. The complaint alleges those efforts included removing the choice of “observation” from hospital forms; telling doctors what to write in patient medical charts to justify unnecessary admissions; establishing quotas on the number of patients admitted; and retaliating against doctors if those quotas were not met.

Becker’s Hospital Review and Modern Healtcare reported on the decision.

Motion to Pre-empt Statistical Sampling Denied

In addition to denying the Motion to Dismiss, the Court also denied a motion filed by Prime to pre-empt the government from using expert, statistical analysis to prove its case.

The government estimates more than 35,000 patients were improperly admitted at 14 Prime hospitals in California, resulting in false billings to Medicare. With such large numbers, statistical sampling is often used to extrapolate results.

Amicus Briefs “unhelpful”

Lastly, the Court denied requests by the American Hospital Association and the California Hospital Association to submit Amici Curiae briefs in the case. The Court indicated the briefs merely complained about the complexity of regulations governing outpatient observation versus inpatient hospitalization, without presenting any new or helpful information.

The Court agreed with the government’s contention that the briefs were “unhelpful” and, therefore, denied the motion.

“We are pleased that this important case will be allowed to proceed,” Attorney Stromgren said. “We have strong evidence to show Prime manipulated the system to get millions of dollars in improper payments from Medicare.”

Upcoding Allegations Proceed

In addition to the medically unnecessary inpatient admission portion of the case, Whistleblower Karin Berntsen will continue to pursue allegations of “upcoding” by Prime. Berntsen alleged in her complaint that Prime hospitals improperly upcoded and falsified patient diagnoses, which resulted in unlawful billings to the federal government. Defendants’ challenge to that portion of the case in an earlier motion also failed.


$2.4 Billion Returned to Taxpayers in Healthcare Fraud Recoveries

The federal government recovered $2.4 billion from healthcare fraud judgments in 2015, according to the Department of Justice.  A portion of the money recovered came as the result of work by the Health Care Fraud and Abuse Control program, which coordinates federal, state and local law enforcement to fight healthcare fraud.

In addition, DOJ obtained more than $1.9 billion in settlements and judgments through the federal False Claims Act.  The False Claims Act makes it possible for private citizens to blow the whistle on healthcare fraud.  These individuals, referred to as relators, can file a lawsuit on behalf of the government to recover money improperly taken from programs like Medicaid and Medicare. The whistleblower can then receive a portion of any successful recovery as a reward.

Click here to read the DOJ news release.


Expert: Fraud Leads to Poor Quality Healthcare

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Harvard professor and healthcare expert Atul Gawande recently noted that the unnecessary medical care endangers patients and robs the taxpayers.  In a recent article published in The New Yorker, Gawande cited fraud as a significant contributor to what leading researchers describe as “low-value care.”  Gawande, a general surgeon, notes that ‘[d]octors get paid for doing more, not less,” and that a huge percentage of Medicare patients receive unnecessary and wasteful care.  You can read Dr. Gawande’s full article on The New Yorker’s website.

Excerpted in Part:

I am a general surgeon with a specialty in tumors of the thyroid and other endocrine organs. In my clinic that afternoon, I saw eight new patients with records complete enough that I could review their past medical history in detail. One saw me about a hernia, one about a fatty lump growing in her arm, one about a hormone-secreting mass in her chest, and five about thyroid cancer.

To my surprise, it appeared that seven of those eight had received unnecessary care. Two of the patients had been given high-cost diagnostic tests of no value. One was sent for an MRI after an ultrasound and a biopsy of a neck lump proved suspicious for thyroid cancer. (An MRI does not image thyroid cancer nearly as well as the ultrasound the patient had already had.) The other received a new, expensive, and, in her circumstances, irrelevant type of genetic testing. A third patient had undergone surgery for a lump that was bothering him, but whatever the surgeon removed it wasn’t the lump—the patient still had it after the operation. Four patients had undergone inappropriate arthroscopic knee surgery for chronic joint damage. (Arthroscopy can repair certain types of acute tears to the cartilage of the knee. But years of research, including randomized trials, have shown that the operation is of no help for chronic arthritis- or age-related damage.)

Virtually every family in the country, the research indicates, has been subject to overtesting and overtreatment in one form or another. The costs appear to take thousands of dollars out of the paychecks of every household each year. Researchers have come to refer to financial as well as physical “toxicities” of inappropriate care—including reduced spending on food, clothing, education, and shelter. Millions of people are receiving drugs that aren’t helping them, operations that aren’t going to make them better, and scans and tests that do nothing beneficial for them, and often cause harm.



Shands Hospitals Pay $3.25 Million in 2nd Part of Florida Whistleblower Settlement

Shands Health Care System has agreed to pay $3.25 million to settle outstanding claims that six of its Florida hospitals submitted improper outpatient billing to the government which resulted in overpayments from Medicaid, Medicare and TRICARE.   This settlement comes on the heels of a $26 million settlement in August of 2013, which resolved additional claims by the same whistleblower also related to improper patient admissions.

James Hoyer Law Firm Partner Christopher Casper served as co-counsel for whistleblower Terry Myers, along with Attorney Marlan Wilbanks, of the Wilbanks and Bridges Law Firm.

Mr. Myers filed the suit in the Middle District of Florida in April of 2008, naming Shands Health Care System and six of its Florida Hospitals:  Shands Alachua General Hospital; Shands Jacksonville Medical Center, Inc.; Shands Teaching Hospital and Clinics, Inc., d/b/a Shands at the University of Florida; Shands at Lakeshore, Inc.; Shands Live Oak; and Shands Starke.

In regards to the remaining allegations following the $26 million settlement, Myers contended that Shands knowingly submitted observation claims to Medicare, Medicaid and TRICARE for certain services and procedures which Shands knew or should have known that physician orders were missing or otherwise deficient for the charges billed.

Myers is the founder and President of YPRO Corporation. The company is a nationwide healthcare consulting firm that was hired by Shands in 2006 and 2007 to conduct audits to determine if Medicare and Medicaid rules were being followed.  Serious billing, coding, and compliance issues were uncovered by the whistleblower’s company and relayed to Shands Corporate Executives and Shands Compliance officers.  Mr. Myers felt compelled to take action by filing the whistleblower suit after Shands failed to correct the problems and self-report the overpayments to the government.

To settle the out-patient/observation claims, Shands will pay the United States $3.14 million for the federal portion of the settlement and an additional $103,668 to the State of Florida for the state portion of the settlement.

The lawsuit was filed under the federal False Claims Act (FCA) and the Florida False Claims Act. The False Claims Act allows private citizens to bring civil actions on behalf of the government in order to recover taxpayer money when fraud is suspected.   If a case is successful, the whistleblower is entitled by law to recover money from the Defendants.