White Collar Criminal Defense Group

Hundreds Of False Diagnoses Result In Guilty Plea For Physician In Medicare Advantage Fraud Case

On Friday, a Florida physician admitted to making false diagnoses of Medicare Advantage beneficiary patients, and entered a plea of guilty to one count of healthcare fraud in the United States District Court for the Southern District of Florida.  The physician, Dr. Isaac Kojo Anakwah Thompson, is an internal medicine specialist who operated a medical clinic in Del Ray Beach, Florida.  He was a primary care physician (PCP) enrolled in Humana, Inc.’s Medicare Advantage Health Maintenance Organization (HMO).  He carried out the fraud by making false diagnoses of patients in order to receive excess capitation fees from Humana.    

The Medicare Advantage program, administered under Medicare Part C, allows beneficiaries to enroll in health insurance plans sponsored by private insurance companies.  Medicare pays the sponsoring insurance company a fixed monthly fee for each beneficiary who enrolls.  Unlike Medicare’s fee-for-service model, the Medicare Advantage fee is based on the beneficiary’s medical conditions.  Accordingly, the fee paid for beneficiaries with serious medical conditions is larger than the capitated fee paid for a healthier beneficiary.  Medicare determines the beneficiary’s medical conditions in part by using diagnoses submitted by the beneficiary’s physician.

According to the government, between 2006 and 2010, Dr. Thompson diagnosed 387 Medicare Advantage beneficiaries with ankylosing spondylitis, which is a rare chronic inflammatory disease of the spine.  Dr. Thompson reported these diagnoses to Humana, which in turn reported them to Medicare.  These reported conditions resulted in Medicare paying approximately $2.1 million in excess capitation fees for those patients.  According to the government, approximately 80% of those excess capitation fees went to Dr. Thompson.  At the plea hearing, Dr. Thompson acknowledged that all or almost all of the ankylosing spondylitis diagnoses were false.

The charge to which Dr. Thompson pleaded guilty to carries a maximum statutory prison sentence of 10 years.  In addition, he faces orders of restitution and potential fines.  Sentencing in this case is scheduled for May 18, 2016.

While the actions acknowledged by Dr. Thompson in his plea hearing demonstrated blatant disregard for the requirements of the Medicare Advantage program, all providers should be aware of the scrutiny that continues to be applied to program participants.  In its FY 16 Work Plan, HHS-OIG reaffirmed its commitment to review medical record documentation to ensure that it supports the diagnoses submitted by Medicare Advantage organizations for use in CMS’s risk-score calculations.  The Work Plan indicates that OIG reviews have shown that medical record documentation does not always support the diagnoses submitted to CMS by Medicare Advantage organizations. A link to the FY 16 Work Plan can be found here.

HCFAC Releases FY 2015 Health Care Fraud Enforcement Results – Community Mental Health, Electronic Health Records And Quality Of Care Highlighted

On February 26, the National Health Care Fraud and Abuse Control Program (HCFAC) released its fiscal year (FY) 2015 statistics regarding enforcement actions and recoveries for federal health care programs.  According to the report, during FY 15 the federal government won or negotiated over $1.9 billion in health care fraud judgments and settlements, and additional administrative impositions.  These actions resulted in the return of approximately $2.4 billion to the federal government or to private persons.  The Medicare Trust Funds received the lion’s share ($1.6 billion), while $135.9 million in federal Medicaid money was transferred separately to the U.S. Treasury.
 
The FY 15 report provides highlights of criminal and civil investigations across a wide range of health care matters, including many of these categories covered in the FY 14 Report:

• Ambulance and transportation services;
• Clinics;
• Device companies;
• Drug companies;
• Durable medical equipment;
• Health maintenance organizations;
• Home health providers;
• Hospice care;
• Hospitals and health systems;
• Identity theft;
• Nursing homes and facilities;
• Pharmacies;
• Physician practice;
• Prescription drugs;
• Psychiatric and psychological testing services. 

Five (5) categories highlighted in this year’s report were not covered in the FY 14 report.  To the extent the inclusion of the categories in the FY 15 report may indicate a trend, they are identified as follows:

• Community Mental Health Centers:  Each of the three cases highlighted in this category involved convictions of individuals who participated in fraudulent billing for psychiatric services as being conducted as part of a partial hospitalization program (PHP).  In each of the cases, the individuals were involved to one degree or another in the funneling of patients into programs where Medicare was billed for PHP services in instances where the patients did not need, qualify for or receive PHP treatment.
• Electronic Health Records:  The CFO of a medical center in Texas was sentenced to 23 months in prison after pleading guilty to having provided a false attestation that the hospital’s electronic health record (EHR) platform met “meaningful use” requirements in order to qualify for incentive payments under Medicare’s EHR incentive program.  The evidence demonstrated that the hospital used the EHR system sparingly and did not meet the criteria for CMS incentive payments, which in FY 12 totaled $785,655.
• Laboratories:  Both of the highlighted laboratory cases involved kickback schemes for referrals.  In the first case, three physicians were sentenced after pleading guilty to charges relating to a test-referral kickback scheme.  In the other featured case, two laboratories resolved civil FCA allegations that they paid physicians kickbacks in exchange for patient referrals, and billed federal health care programs for medically unnecessary testing.
• Patient Harm:  In one highlighted case, a New York cardiologist was sentenced to three years in prison and ordered to pay $2 million in restitution after pleading guilty to a charge of health care fraud, for having offered patients narcotic prescriptions in exchange for those patients undergoing unnecessary diagnostic tests and other medical procedures.  In the second case, a Detroit area hematologist-oncologist was sentenced to 45 years’ imprisonment and ordered to forfeit $17.6 million for health care fraud, money laundering and a kickback scheme.  In that case, the government demonstrated that the physician had administered medically unnecessary infusions and injections to 553 patients, including medically unnecessary chemotherapy, cancer treatments, and other infusion and injection therapies.
• Quality of Care: Several California nursing and health care services companies entered into separate settlement agreements worth a combined $3.8 million to resolve allegations of false claims for materially substandard or worthless services.  The companies were alleged to have overmedicated elderly and vulnerable residents of their facilities, causing, among other things, infection, malnutrition, dehydration, fractures, pressure ulcers, and for some beneficiaries, premature death.

The results discussed in the FY 15 report demonstrate a continued trend of increased enforcement action and recoveries over the past six (6) years.  Specifically, of the $29.4 billion returned by the HCFAC since the inception of the Program in 1997, over $16.2 billion was returned between 2009 and 2015.  While the overall trend of increased enforcement continues, the report demonstrates that the major enforcement indices remained relatively flat or represented a slight reduction from the numbers reported by HCFAC for FY 14:

The HCFAC annual report provides a significant amount of detailed data and further examples of enforcement actions.  The link to the full report can be found here.