In this assignment you will have an opportunity to review an annual report produced by the Department of Justice. The report summarizes compliance activities conducted by Federal agencies and the outcomes of cases which have been prosecuted.<\/p>\n
Download the Heathcare fraud and abuse
\nand complete the questions using information found within the Annual Report attached (below.
\nThe department of justice healthcare fraud and abuse control program annual report for 2015<\/p>\n
and worksheet Heathcare fraud and abuse<\/p>\n
The Department of Health and Human Services
\nAnd
\nThe Department of Justice
\nHealth Care Fraud and Abuse Control Program
\nAnnual Report for Fiscal Year 2015
\nFEBRUARY 2016
\nTABLE OF CONTENTS
\nI. Executive Summary 1<\/p>\n
II. Statutory Background 3
\nIII.\t Program Results and Accomplishments 5
\nMonetary Results 5
\nExpenditures 7<\/p>\n
Overall Recoveries 8<\/p>\n
Health Care Fraud Prevention and Enforcement Action Team 8
\nHealth Care Fraud Prevention Partnership 9
\nMedicare Fraud Strike Force 10
\nHighlights of Successful Criminal and Civil Investigations 12
\nIV.\t Department of Health and Human Services 36
\nOffice of Inspector General 36
\nCenters for Medicare & Medicaid Services 45
\nAdministration on Community Living 56
\nOffice of the General Counsel 58
\nFood and Drug Administration Pharmaceutical Fraud Program 62
\nV.\t Department of Justice 64
\nUnited States Attorneys 64
\nCivil Division 66
\nCriminal Division 69
\nCivil Rights Division 72
\nVI.\t Appendix 77
\nFederal Bureau of Investigation 77
\nReturn on Investment Calculation 80
\nTotal HCFAC Resources 81<\/p>\n
VII. Glossary of Terms\t 82<\/p>\n
GENERAL NOTE
\nAll years are fiscal years unless otherwise
\nnoted in the text.<\/p>\n
EXECUTIVE SUMMARY
\nThe Health Insurance Portability and Accountability Act of 1996 (HIPAA) established a national
\nHealth Care Fraud and Abuse Control Program (HCFAC or the Program) under the joint
\ndirection of the Attorney General and the Secretary of the Department of Health and Human
\nServices (HHS)1
\n, acting through the Inspector General, designed to coordinate federal, state and
\nlocal law enforcement activities with respect to health care fraud and abuse. In its nineteenth
\nyear of operation, the Programs continued success confirms the soundness of a collaborative
\napproach to identify and prosecute the most egregious instances of health care fraud, to prevent
\nfuture fraud and abuse, and to protect program beneficiaries.
\nMonetary Results
\nDuring Fiscal Year (FY) 2015, the Federal Government won or negotiated over $1.9 billion in
\nhealth care fraud judgments and settlements2
\n, and it attained additional administrative
\nimpositions in health care fraud cases and proceedings. As a result of these efforts, as well as
\nthose of preceding years, in FY 2015, approximately $2.4 billion was returned to the Federal
\nGovernment or paid to private persons. Of this $2.4 billion, the Medicare Trust Funds3
\nreceived
\ntransfers of approximately $1.6 billion during this period, and $135.9 million in Federal
\nMedicaid money was similarly transferred separately to the Treasury as a result of these
\nefforts. Of the approximately $29.4 billion returned by the HCFAC account to the Medicare
\nTrust Funds since the inception of the Program in 1997, over $16.2 billion has been returned
\nbetween 2009 and 2015.
\nEnforcement Actions
\nIn FY 2015, the Department of Justice (DOJ) opened 983 new criminal health care fraud
\ninvestigations. Federal prosecutors filed criminal charges in 463 cases involving 888 defendants.
\nA total of 613 defendants were convicted of health care fraud-related crimes during the year.
\nAlso in FY 2015, DOJ opened 808 new civil health care fraud investigations and had 1,048 civil
\nhealth care fraud matters pending at the end of the fiscal year. In FY 2015, the FBI investigative
\nefforts resulted in over 625 operational disruptions of criminal fraud organizations and the
\ndismantlement of the criminal hierarchy of more than 144 health care fraud criminal enterprises.
\nIn FY 2015, HHS Office of Inspector General (HHS-OIG) investigations resulted in 800
\ncriminal actions against individuals or entities that engaged in crimes related to Medicare and
\nMedicaid, and 667 civil actions, which include false claims and unjust-enrichment lawsuits filed
\nin federal district court, civil monetary penalties (CMP) settlements, and administrative
\nrecoveries related to provider self-disclosure matters. HHS-OIG also excluded 4,112 individuals
\n1
\nHereafter, referred to as the Secretary.
\n2
\nThe amount reported as won or negotiated only reflects the federal recoveries and therefore does not reflect state
\nMedicaid monies recovered as part of any global federal-state settlements. 3
\nAlso known as the Medicare Hospital Insurance (Part A) Trust Fund and the Supplemental Medical Insurance (Part
\nB) Trust Fund.
\n1<\/p>\n
and entities from participation in Medicare, Medicaid, and other federal health care programs.
\nAmong these were exclusions based on criminal convictions for crimes related to Medicare and
\nMedicaid (1,329) or to other health care programs (424), for patient abuse or neglect (302), and
\nas a result of licensure revocations (1,743). HHS-OIG also issued numerous audits and
\nAssessments with recommendations that, when implemented, would correct program
\nvulnerabilities and save program funds.
\nSequestration Impact
\nDue to sequestration of mandatory funding in 2015, there were fewer resources for DOJ, FBI,
\nHHS, and HHS-OIG to fight fraud and abuses against Medicare, Medicaid, and other health care
\nprograms. A total of $22.0 million was sequestered from the HCFAC program in FY 2015, for a
\ncombined total of $74.2 million in the past three years. Including funds sequestered from the
\nFBI, the total equals $101.2 million in the past three years.
\n2<\/p>\n
STATUTORY BACKGROUND<\/p>\n
The Annual Report of the Attorney General and the Secretary detailing expenditures and
\nrevenues under the Health Care Fraud and Abuse Control Program for Fiscal Year 2015 is
\nprovided as required by Section 1817(k)(5) of the Social Security Act.
\nThe Social Security Act Section 1128C(a), as established by the Health Insurance Portability and
\nAccountability Act of 1996 (P.L. 104-191, HIPAA or the Act), created the Health Care Fraud
\nand Abuse Control Program, a far-reaching program to combat fraud and abuse in health care,
\nincluding both public and private health plans.
\nAs was the case before HIPAA, amounts paid to Medicare in restitution or for compensatory
\ndamages must be deposited in the Medicare Trust Funds. The Act requires that an amount
\nequaling recoveries from health care investigationsincluding criminal fines, forfeitures, civil
\nsettlements and judgments, and administrative penaltiesalso be deposited in the Trust Funds.
\nThe Act appropriates monies from the Medicare Hospital Insurance Trust Fund to an expenditure
\naccount, called the Health Care Fraud and Abuse Control Account (the Account), in amounts that
\nthe Secretary and Attorney General jointly certify as necessary to finance anti-fraud activities.
\nThe maximum amounts available for certification are specified in the Act. Certain of these sums
\nare to be used only for activities of the HHS-OIG, with respect to the Medicare and Medicaid
\nprograms. In FY 2006, the Tax Relief and Health Care Act (TRHCA) (P.L 109-432, 303)
\namended the Act so that funds allotted from the Account are available until expended.
\nTRHCA also allowed for yearly increases to the Account based on the change in the consumer
\nprice index for all urban consumers (all items, United States city average) (CPI-U) over the
\nprevious fiscal year for fiscal years for 2007 through 2010.4 In FY 2010, the Patient Protection
\nand Affordable Care Act, as amended by the Health Care and Education Reconciliation Act,
\ncollectively referred to as the Affordable Care Act (P.L. 111-148, ACA) extended permanently
\nthe yearly increases to the Account based upon the change in the consumer price index for all
\nurban consumers, or CPI-U.
\nIn FY 2015, the Secretary and the Attorney General certified $279.7 million in mandatory
\nfunding to the Account after accounting for sequester reductions of $22.0 million to the total
\nappropriation. Additionally, Congress appropriated $672.0 million in discretionary funding. A
\ndetailed breakdown of the allocation of these funds is set forth later in this report. HCFAC
\nappropriations generally supplement the direct appropriations of HHS that are devoted to health
\ncare fraud enforcement and supported over two-thirds of DOJs health care fraud funding and
\nover three-fourths of HHS-OIGs appropriated budget in FY 2015. (Separately, the FBI, which
\nis discussed in the appendix, received $129.2 million from HIPAA, after accounting for $10.2
\nmillion in mandatory sequester reductions.) Under the joint direction of the Attorney General
\nand the Secretary, the Programs goals are:
\n4
\nThe CPI-U adjustment in TRHCA did not apply to the Medicare Integrity Program (MIP). Section 6402 of the
\nACA indexed Medicare Integrity Program funding to inflation starting in FY 2010.
\n3
\n(1) to coordinate federal, state and local law enforcement efforts relating to health care fraud
\nand abuse with respect to health plans;
\n(2) to conduct investigations, audits, inspections, and Assessments relating to the delivery of
\nand payment for health care in the United States;
\n(3)\t to facilitate enforcement of all applicable remedies for such fraud; and
\n(4) to provide education and guidance regarding complying with current health care law.
\nThe Act requires the Attorney General and the Secretary to submit a joint annual report to the
\nCongress that identifies both:
\n(1) the amounts appropriated to the Trust Funds for the previous fiscal year under various
\ncategories and the source of such amounts; and
\n(2) the amounts appropriated from the Trust Funds for such year for use by the Attorney
\nGeneral and the Secretary and the justification for the expenditure of such amounts.
\nThis annual report fulfills the above statutory requirements.
\nAdditionally, this report fulfills the requirement in the annual discretionary HCFAC
\nappropriation (Public Law 113-235 Consolidated and Further Continuing Appropriations Act,
\n2015) that this report include measures of the operational efficiency and impact on fraud,
\nwaste, and abuse in the Medicare, Medicaid, and CHIP programs for the funds provided by this
\nappropriation.
\n4<\/p>\n
Centers for Medicare & Medicaid Services<\/p>\n
Centers for Medicare and Medicaid Services
\nPROGRAM RESULTS AND ACCOMPLISHMENTS
\nAs required by the Act, HHS and DOJ must detail in this Annual Report the amounts deposited
\nto the Medicare Trust Funds and the source of such deposits. In FY 2015, approximately
\n$2.4 billion was deposited with the Department of the Treasury and CMS, transferred to other
\nfederal agencies administering health care programs, or paid to private persons during the fiscal
\nyear. Monetary results from these transfers and deposits are provided in the table below:
\nMonetary Results: Total Transfers\/Deposits by Recipient FY 2015
\nDepartment of the Treasury
\nDeposits to the Medicare Trust Funds, as required by HIPAA
\nGifts and Bequests $10,372
\nAmount Equal to Criminal Fines 56,549,115
\nCivil Monetary Penalties 45,772,271
\nAsset Forfeiture 14,791,644
\nPenalties and Multiple Damages 512,054,108
\nSubtotal 629,177,509
\nHHS-OIG Audit Disallowances Recovered – Medicare 132,612,502
\nRestitution\/Compensatory Damages 793,934,739
\nSubtotal* 926,547,241
\nGrand Total of Amounts Transferred to the Medicare Trust Funds $1,555,724,750
\nRestitution\/Compensatory Damages to Federal Agencies
\nHHS\/Other $31,355,848
\nTRICARE 14,921,254
\nCMS 8,253,589
\nHHS-OIG Cost of Audits, Investigations and Compliance Monitoring 7,766,281
\nOther Agencies 18,200,774
\nFederal Share of Medicaid 135,866,585
\nHHS-OIG Audit Disallowances Recovered – Medicaid 168,955,572
\nSubtotal 385,319,903
\nRelators= Payments** 414,456,455
\nTOTAL*** $2,355,501,108
\n*Restitution, compensatory damages, and recovered audit disallowances include returns to both the Medicare
\nHospital Insurance (Part A) Trust Fund and the Supplemental Medical Insurance (Part B) Trust Fund.
\n**These are funds awarded to private persons who file suits on behalf of the Federal Government under the qui tam<\/p>\n
(whistleblower) provisions of the False Claims Act, 31 U.S.C. ‘ 3730(b).
\n***State funds are also collected on behalf of state Medicaid programs; only the Federal share of Medicaid funds<\/p>\n
transferred to CMS are represented here.
\n5
\nAmount
\nThe above transfers include certain collections, or amounts equal to certain collections, required
\nby HIPAA to be deposited directly into the Medicare Trust Funds. These amounts include:
\n(1) Gifts and bequests made unconditionally to the Trust Funds, for the benefit of the
\nAccount or any activity financed through the Account;
\n(2)\t Criminal fines recovered in cases involving a federal health care offense, including
\ncollections under section 24(a) of Title 18, United States Code (relating to health care
\nfraud);
\n(3)\t Civil monetary penalties in cases involving a federal health care offense;
\n(4) Amounts resulting from the forfeiture of property by reason of a federal health care
\noffense, including collections under section 982(a)(7) of Title 18, United States Code;
\nand
\n(5) Penalties and damages obtained and otherwise creditable to miscellaneous receipts of the
\ngeneral fund of the Treasury obtained under sections 3729 through 3733 of Title 31,
\nUnited States Code (known as the False Claims Act, or FCA), in cases involving claims
\nrelated to the provision of health care items and services (other than funds awarded to a
\nrelator, for restitution or otherwise authorized by law).
\n6<\/p>\n
Expenditures
\nIn the nineteenth year of operation, the Secretary and the Attorney General certified
\n$279.7 million in mandatory funding as necessary for the Program, after accounting for
\nmandatory sequester reductions of $22.0 million as required by law. Additionally, Congress
\nappropriated $672.0 million in discretionary funding. See allocation by recipient below:
\nFY 2015 ALLOCATION OF HCFAC APPROPRIATION
\nOrganization Mandatory
\nAllocation5
\nDiscretionary
\nAllocation
\nFunds
\nSequestered
\nTotal
\nAllocation
\nDepartment of Health and Human
\nServices
\nOffice of Inspector General6
\n$200,718,475 $67,200,000 ($14,652,449) $253,266,026
\nOffice of the General Counsel 10,000,000 0 0 10,000,000
\nAdministration for Community
\nLiving 8,710,136 0 0 8,710,136
\nFood and Drug Administration 3,377,220 0 0 3,377,220
\nCenters for Medicare & Medicaid
\nServices 13,500,000 544,320,000 0 577,820,000
\nUnallocated Funding 2,802,456 0 (2,802,456) 0
\nSubtotal 239,108,287 611,520,000 (17,454,905) 853,173,382
\nDepartment of Justice
\nUnited States Attorneys 31,400,000 20,505,542 51,905,542
\nCivil Division7
\n19,538,751 12,093,818 31,632,569
\nCriminal Division 4,580,184 10,162,659 14,742,843
\nCivil Rights Division 2,376,000 5,443,276 7,819,276
\nJustice Management Division 200,000 100,000 300,000
\nDepartment of Justice – Other 4,574,898 12,174,705 (4,574,898) 12,174,705
\nSubtotal 62,669,833 60,480,000 (4,574,898) 118,574,935
\nTOTAL8
\n$301,778,120 $672,000,000 ($22,029,803) $971,748,317
\n5
\nAs of FY 2007, mandatory funds are available until expended. Discretionary funds are available for two years. 6
\nIn addition, HHS-OIG obligated $9.8 million in funds received as reimbursement for the costs of conducting
\ninvestigations and audits and for monitoring compliance plans as authorized by section 1128C(b) of the Social
\nSecurity Act, 42 U.S.C. 1320a-7c(b). 7
\nThe Elder Justice Initiative, managed by the Civil Division, is included in the Civil Division figures.
\n8
\nAmounts only represent those that are provided by statute, and do not include other mandatory sources or<\/p>\n
discretionary appropriated sources provided through Departments annual appropriations.
\n7<\/p>\n
Overall Recoveries
\nDuring this fiscal year, the Federal Government won or negotiated over $1.9 billion in judgments
\nand settlements, and attained additional administrative impositions in health care fraud cases and
\nproceedings. As a result of these efforts, as well as those of preceding years, approximately $2.4
\nbillion was returned to the Federal Government or private persons. Of this $2.4 billion, the
\nMedicare Trust Funds received transfers of approximately $1.6 billion during this period; and
\nanother $135.9 million in Federal Medicaid money was transferred to the Treasury separately as
\na result of these efforts.9
\nIn addition to these enforcement actions, numerous audits, Assessments and other coordinated
\nefforts yielded recoveries of overpaid funds, and prompted changes in federal health care
\nprograms that reduce vulnerability to fraud.
\nThe return on investment (ROI) for the HCFAC program over the last three years (2013-2015) is
\n$6.10 returned for every $1.00 expended. Because the annual ROI can vary from year to year
\ndepending on the number and type of cases that are settled or adjudicated during that year, DOJ
\nand HHS use a three-year rolling average ROI for results contained in the report. Additional
\ninformation on how the ROI is calculated can be found in the Appendix.
\nHealth Care Fraud Prevention and Enforcement Action Team (HEAT)
\nThe Attorney General and the Secretary maintain regular consultation at both senior and staff
\nlevels to accomplish the goals of the HCFAC Program. On May 20, 2009, Attorney General
\nHolder and Secretary Sebelius announced the Health Care Fraud Prevention & Enforcement
\nAction Team (HEAT), a new effort with increased tools and resources, and a sustained focus by
\nsenior level leadership to enhance collaboration between the Departments of Health and Human
\nServices and Justice. With the creation of the new HEAT effort, DOJ and HHS pledged a
\nCabinet-level commitment to prevent and prosecute health care fraud. HEAT, which is jointly
\nled by the Deputy Attorney General and HHS Deputy Secretary, is comprised of top level law
\nenforcement agents, prosecutors, attorneys, auditors, evaluators, and other staff from DOJ and
\nHHS and their operating divisions, and is dedicated to joint efforts across government to both
\nprevent fraud and enforce current anti-fraud laws around the country. The Medicare Fraud
\nStrike Force teams are a key component of HEAT.
\nThe mission of HEAT is:
\nTo marshal significant resources across government to prevent waste, fraud and
\nabuse in the Medicare and Medicaid programs and crack down on the fraud
\nperpetrators who are abusing the system and costing us all billions of dollars.
\nTo reduce health care costs and improve the quality of care by ridding the system of
\nperpetrators who are preying on Medicare and Medicaid beneficiaries.
\n9
\nNote that some of the judgments, settlements, and administrative actions that occurred in FY 2015 will result in
\ntransfers in future years, just as some of the transfers in FY 2015 are attributable to actions from prior years.
\n8
\nTo highlight best practices by providers and public sector employees who are
\ndedicated to ending waste, fraud, and abuse in Medicare.
\nTo build upon existing partnerships between DOJ and HHS, such as our Medicare
\nFraud Strike Force Teams, to reduce fraud and recover taxpayer dollars.
\nSince its creation in May 2009, HEAT has focused on key areas for coordination and
\nimprovement. HEAT members are working to identify new enforcement initiatives and areas for
\nincreased oversight and prevention to increase efficiency in areas such as pharmaceutical and
\ndevice investigations. DOJ and HHS have expanded data sharing and improved information
\nsharing procedures in order to get critical data and information into the hands of law enforcement
\nto track patterns of fraud and abuse and increase efficiency in investigating and prosecuting
\ncomplex health care fraud cases. The departments established a cross-government health care
\nfraud data intelligence sharing workgroup to share fraud trends, new initiatives, ideas, and
\nsuccess stories to improve awareness across of issues relating to health care fraud.
\nBoth departments also have developed training programs to prevent honest mistakes and help
\nstop potential fraud before it happens. This includes CMS compliance training for providers, ongoing
\nmeetings at U.S. Attorneys Offices (USAOs) with the public and private sector, and
\nincreased efforts by HHS to educate specific groupsincluding elderly and immigrant
\ncommunitiesto help protect them. In addition, DOJ conducts, with the support of HHS, a
\nMedicare Fraud Strike Force training program designed to teach the Strike Force concept and
\ncase model to prosecutors, law enforcement agents, and administrative support teams.
\nHealthcare Fraud Prevention Partnership (HFPP)
\nThe Healthcare Fraud Prevention Partnership (HFPP) is the groundbreaking public\/private
\npartnership between the Federal Government, State officials, law enforcement, private health
\ninsurance plans and associations, and healthcare anti-fraud associations. The purpose of the
\npartnership is to exchange data and information between the partners to help improve capabilities
\nto fight fraud, waste and abuse in the health care industry. Since its inception in 2012, the
\nnumber of participants has increased to 45 public, private and state partner organizations. The
\nPartnership has completed several studies associated with fraud, waste or abuse that have yielded
\nsuccessful results for participating partners. Studies have examined such subjects as false store
\nfronts or phantom providers and top billing pharmacies. Additional studies are underway and
\nthe Partnership has established a Trusted Third Party (TTP) which conducts HFPP data
\nexchanges, research, data consolidation and aggregation, reporting, and analysis. The TTP will
\nnot share the source of the data (i.e., which partner submitted what data) during an exchange in
\norder to keep the identity of the data source confidential. HFPP is continuing to expand with
\nnew partners.
\nThe Partnership is a demonstrated example of effective departmental collaboration between HHS
\nand DOJ, working together to create a strong partnership with the states and private payers to
\ndetect fraud, waste, and abuse. In FY 2015, the Partnership hosted its fifth Executive Board
\nmeeting. The meeting focused on developing a strategy to ensure the productivity of the
\nPartnership and highlighted achievements and progress since the last meeting including data
\nexchanges, information sharing, and partnership growth.
\n9<\/p>\n
Medicare Fraud Strike Force
\nThe first Medicare Fraud Strike Force (Strike Force) was launched in March 2007 as part of the
\nSouth Florida Initiative, a joint investigative and prosecutorial effort against Medicare fraud and
\nabuse in South Florida. The Strike Force is comprised of interagency teams made up of
\ninvestigators and prosecutors that focus on the worst offenders in regions with the highest known
\nconcentration of fraudulent activities. The Strike Force uses advanced data analysis techniques
\nto identify aberrant billing levels in health care fraud hot spotscities with high levels of
\nbilling fraudand target suspicious billing patterns, as well as emerging schemes and schemes
\nthat migrate from one community to another. Based on the success of these efforts and increased
\nappropriated funding for the HCFAC program from Congress and the Administration, DOJ and
\nHHS expanded Strike Force operations to a total of nine areas in the United StatesMiami,
\nFlorida; Los Angeles, California; Detroit, Michigan; Southern Texas; Brooklyn, New York;
\nSouthern Louisiana; Tampa, Florida; Chicago, Illinois; and Dallas, Texas.
\nEach Medicare Fraud Strike Force team brings the investigative and analytical resources of the
\nFBI and HHS-OIG and the prosecutorial resources of the Criminal Divisions Fraud Section and
\nthe USAOs to analyze data obtained from CMS and bring cases in federal district court. Strike
\nForce accomplishments in the areas noted above and USAO accomplishments in their districts
\nduring FY 2015 include10:
\n200 indictments, informations and complaints involving charges filed against
\n391 defendants who allegedly collectively billed the Medicare program approximately
\n$1.4 billion;
\n314 guilty pleas negotiated and 28 jury trials litigated, with guilty verdicts against
\n48 defendants; and<\/p>\n
Imprisonment for 263 defendants sentenced during the fiscal year, averaging more than
\n56 months of incarceration.
\nIn the eight and a half years since its inception, Strike Force prosecutors filed more than
\n1,164 cases charging more than 2,536 defendants who collectively billed the Medicare program
\nmore than $8 billion; 1,781 defendants pleaded guilty and 243 others were convicted in jury
\ntrials; and 1,477 defendants were sentenced to imprisonment for an average term of
\napproximately 49 months.11
\nMedicare payment trends demonstrate the positive impact of Strike Force enforcement and
\nprevention efforts. For example, Medicare payments for home health care increased from 2006
\nuntil 2010. In 2009, CMS changed Medicares Home Health Agency (HHA) outlier coverage
\npolicy, following federal enforcement actions initiated by the HEAT Strike Force case U.S. v.
\nZambrana in Miami and HHS-OIG reports regarding home health outlier payments. As reflected
\n10 The accomplishments figures presented in the bullets include all reported Strike Force cases handled by DOJ
\nCriminal Division attorneys and AUSAs in the respective USAOs during FY 2015.
\n11 These statistics are for the period of May 7, 2007 through September 30, 2015.<\/p>\n
10<\/p>\n
on the chart below, since 2010, payments for HHAs in Miami decreased by $100 million per
\nquarter since the peak in 2009, and continue to decline. In Dallas and Detroit, payments for
\nHHAs are down by over $40 million and $25 million per quarter, respectively, since 2010. This
\nmay suggest that the home health fraud convictions not only eliminated some of the bad actors
\nbut also deterred other fraudsters from exploiting the outlier coverage policy. We have seen
\nsimilar patterns of decreased Medicare payments for Durable Medical Equipment (DME) and
\ncommunity mental health services (CMHC) following concentrated law enforcement initiatives
\nand administrative fraud prevention efforts.
\n$0
\n$25
\n$50
\n$75
\n$100
\n$125
\n$150
\n$175
\n$200
\n$225
\n$250
\n$275
\nMillions
\nMedicare Payments for CMHC, DME, and HHA Services,
\nCalendar Years 2006-2015
\nCMHC-National
\nHHA-Miami area
\nDME-Miami area
\nHHA-Detroit area
\nHHA Dallas area
\nFor examples of successful Strike Force cases initiated or concluded during FY 2015, please see
\nHighlights of Successful Criminal and Civil Investigations beginning on p. 12.
\n11<\/p>\n
Highlights of Successful Criminal and Civil Investigations
\nOur respective Departments successfully pursued Medicare Fraud Strike Force matters, as well
\nas other criminal and civil investigations in a wide range of areas. Cases are organized by type
\nand presented in chronological order. Strike Force cases are denoted by (SF) in the lead
\nsentence.
\nAmbulance and Transportation Services
\nIn November 2014, the co-owner of Brotherly Love, a Philadelphia, Pennsylvania ambulance
\ncompany, was sentenced to 5 years and 4 months of incarceration and was ordered to pay more
\nthan $2 million in restitution after pleading guilty to health care fraud and the anti-kickback
\nstatute (AKS) charges. The investigation revealed that the co-owner and her co-conspirators
\ntransported by ambulance patients who could walk; transported patients in personally owned
\nvehicles, but billed as if the patients were transported by ambulance; used patient information to
\nbill as if the patients had been transported by ambulance when, in fact, the patients actually
\ntransported themselves; and paid patients to be transported by Brotherly Love.
\nIn May 2015, five Orange County California ambulance companies in San Diego, California
\nagreed to pay a total of more than $11.5 million to settle civil False Claims Act (FCA)
\nallegations that they engaged in so-called swapping kickback schemes by providing deeply
\ndiscountedand often below costambulance services to hospitals and\/or skilled nursing
\nfacilities (SNFs) in exchange for exclusive rights to the facilities more lucrative Medicare
\npatient referrals in violation of the AKS. The government alleged that the arrangements resulted
\nin false claims for Medicare Part B transports, which in essence subsidized the discounted trips.
\nThe settling defendants were Pacific Ambulance, Inc., Bowers Companies, Inc., Care
\nAmbulance Service, Inc., Balboa Ambulance Service, Inc., and E.R. Ambulance, Inc.
\n(SF) In August 2015, the owner, operators, and managers of ProMed Medical Transportation, an
\nambulance transportation company in the greater Los Angeles area, were convicted after trial for
\ntheir roles in a $2.4 million Medicare fraud scheme. The evidence at trial demonstrated that the
\ndefendants conspired to bill Medicare for ambulance transportation services for individuals
\nwhom the defendants knew did not need such services. The defendants also instructed
\nemergency medical technicians who worked at ProMed to conceal the true medical conditions of
\npatients they were transporting by altering requisite paperwork and creating fraudulent
\ndocuments to justify the transportation services.
\n(SF) In June 2015, a general manager and a dispatch supervisor of Mauran Ambulance Inc., an
\nambulance company in San Fernando, California, were indicted for their roles in a $28 million
\nMedicare fraud scheme. The defendants allegedly billed Medicare for medically unnecessary
\nambulance transportation services, which primarily were to and from dialysis treatments. In
\ntheir respective roles at Mauran, the defendants instructed emergency medical technicians who
\nworked at Mauran to conceal the true medical condition of patients they were transporting by
\naltering paperwork and creating false reasons to justify Maurans ambulance transportation
\nservices. A former administrator of a dialysis clinic was also indicted for receiving cash
\nkickbacks from Maurans general manager in exchange for patient referrals.
\n12
\nClinics
\nIn FY 2015, DaVita Healthcare Partners, Inc., the nations largest provider of dialysis services,
\nagreed to pay a total of $800 million to settle allegations made in two civil FCA actions. In
\nOctober 2014, DaVita agreed to pay $350 million to settle civil FCA allegations that it paid
\nkickbacks to induce the referral of patients to its dialysis clinics. The government alleged that
\nDaVita offered physicians lucrative opportunities to acquire and\/or sell an interest in DaVita
\ndialysis clinics to which their patients would be referred for treatment and then prevented the
\nphysicians from referring their patients to other dialysis providers through a series of noncompete
\nand non-disparagement agreements with the physicians. In June 2015, DaVita paid an
\nadditional $450 million to settle civil FCA allegations pursued by two whistleblowers that it
\ncreated unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients,
\nand then billed federal health care programs for such avoidable waste.
\n(SF) In October 2014, two owners of several Brooklyn, NY medical clinics pled guilty to health
\ncare fraud conspiracy and falsification of records in the Eastern District of New York. The
\nmedical director of one clinic pled guilty to health care fraud conspiracy in March 2015. The
\ndefendants owned and operated a series of medical clinics that were used to submit more than
\n$14.3 million in Medicare claims, of which $5.3 million was paid. The indictment alleged that
\nthe majority of the claims were fraudulent because they were for services such as vitamin
\ninfusions, physical and occupational therapy, and diagnostic tests that were medically
\nunnecessary, not provided, or otherwise not reimbursable. The defendants also allegedly
\nlaundered the proceeds of the fraudulent scheme and falsified documents, which they then
\nprovided to Medicare auditors and the FBI in order to conceal the fraudulent scheme.
\n(SF) In October 2014, an occupational therapist pled guilty in the Eastern District of New York
\nto health care fraud conspiracy for his role in a scheme that involved the payment of cash
\nkickbacks to elderly beneficiaries who received massages and light group exercises that were
\nbilled to Medicare and Medicaid as individual one-on-one occupational therapy and other
\noccupational therapy services. As part of the scheme, the defendant, who was a full-time
\ntherapist for the New York Board of Education, signed false and fabricated patient charts and
\nbilling records for therapy that was not actually provided. As part of the plea, the defendant
\nagreed to restitution and forfeiture of $1.6 million. Between February 2008 and February 2011,
\nthe defendant was the seventh-highest biller of occupational therapy in the country.
\n(SF) In January 2015, two physician owners of Spectrum Care P.A., a Houston community
\nmental health clinic, were sentenced to 148 months and 120 months, respectively, for their roles
\nin a $97 million Medicare fraud scheme. The physician defendants were convicted, along with
\nthree co-defendantsa group home owner, a physician Helpant, and an office managerof
\nhealth care fraud conspiracy and substantive counts of health care fraud following a five-week
\njury trial. The evidence at trial showed that the physician defendants signed admission
\ndocuments and progress notes certifying that Medicare beneficiaries qualified for partial
\nhospitalization services, when they did not. The evidence also showed that the physician
\ndefendants paid kickbacks to group home operators and patient recruiters, including their codefendants,
\nin exchange for the referral of beneficiaries. The group home owner was sentenced
\nto 54 months imprisonment, the office manager was sentenced to 60 months imprisonment, and
\nthe physician Helpant was sentenced to 68 months imprisonment.
\n13
\nIn January 2015, six co-conspirators in Arlington, Texas were sentenced for submitting over $5
\nmillion in false health insurance claims to Blue Cross Blue Shield of Texas (BCBS), the Federal
\nEmployees Health Benefits Program, and other insurers for services not rendered at a
\nchiropractic clinic. The co-conspirators included a licensed chiropractor and occupational
\ntherapist who allowed the use of their provider numbers to fraudulently bill insurers for services
\nnot provided. To further the scheme, a union representative for a Texas automotive parts
\nmanufacturer actively recruited employees to go to the co-conspirators chiropractic clinic. The
\nunion representative and recruited employees received illegal kickback for these referrals. The
\nsentences imposed in this case ranged from 6 months imprisonment to 156 months
\nimprisonment, and restitution from $1.3 to $2.4 million.
\n(SF) In February 2015, the co-owners of BONB LLC, aka Bioscan, were sentenced to 57 and 37
\nmonths imprisonment in the Middle District of Florida for their roles in a health care fraud and
\nmoney laundering scheme. Bioscan was a shell company the defendants used to facilitate a
\nmulti-million dollar fraud scheme executed through several purported medical clinics. As part of
\ntheir guilty pleas, the defendants admitted that their co-conspirators submitted $12 million in
\nfraudulent claims to Medicare, including claims resulting from illegal kickback arrangements
\nand claims for radiology, audiology, neurology, and cardiology services that were never
\nrendered. The defendants admitted to attempting to conceal the proceeds of the fraudulent
\nclaims by transferring funds through bank accounts for Bioscan and other entities. In addition to
\nthe prison sentences, one defendant agreed to forfeit a $60,000 platinum and diamond ring he
\npurchased with health care fraud proceeds.
\nIn July 2015, the operator of a sham clinic in the Central District of California was sentenced
\nafter being convicted at trial to 15 years in federal prison for his role in a $20 million scheme to
\ndefraud Medicare and Medicaid by fraudulently prescribing expensive anti-psychotic
\nmedications, selling these drugs on the black market, and then redistributing them to pharmacies,
\nwhere the drugs would be subject to new claims made to Medicare and Medicaid as though they
\nwere new bottles of drugs. Employees of sham clinic generated thousands of prescriptions for
\nidentity theft victimssuch as elderly Vietnamese beneficiaries of Medicare and Medicaid,
\nmilitary veterans who were recruited from drug rehab programs, and denizens of Skid Row.
\nThis case was the first in the nation involving an organized scheme to defraud government health
\ncare programs through fraudulent claims for expensive anti-psychotic medications.
\nCommunity Mental Health Centers
\n(SF) In December 2014, a certified nursing Helpant in Miami, Florida was sentenced to 12 years
\nand six months in prison and ordered to pay $18.2 million in joint and several restitution after
\nbeing convicted by a jury on charges of relating to health care fraud. American Therapeutic
\nCorporation (ATC) operated several purported partial hospitalization programs (PHP)
\nthroughout Florida. Evidence at trial demonstrated that the defendant received thousands of
\ndollars a month in cash kickbacks in exchange for referring Medicare patients to ATC. The
\nevidence also demonstrated that the beneficiaries he sent to ATC did not need, qualify for, or
\nreceive PHP treatment. Nevertheless, ATC submitted false claims to Medicare for PHP services
\npurportedly provided to each of these patients. To date, 30 defendants, including the owners of
\n14<\/p>\n
ATC, have previously pleaded guilty or been convicted at trial on charges related to the ATC
\nscheme, which resulted in more than $200 million in fraudulent Medicare billings.
\n(SF) In January 2015, two physicians in Houston, Texas were sentenced to a combined 22 years
\nand 4 months in prison and ordered to pay a combined $8 million in restitution after being
\nconvicted by a jury on charges relating to health care fraud. The two physicians owned a
\ncommunity mental health center (CMHC) that purportedly provided PHP services to Medicare
\nbeneficiaries. Evidence at trial showed that the two physicians paid kickbacks to group care
\nhome operators and patient recruiters in exchange for bringing ineligible Medicare beneficiaries
\nto their CMHC. They then signed admission documents and progress notes certifying that the
\nbeneficiaries qualified for PHP services when, in fact, they did not qualify for or need these
\nservices and\/or the actual services were not performed. The CMHC billed Medicare
\napproximately $97 million for these fraudulent services. One of the group home owners was
\nsentenced to 4-and-a-half years in prison and ordered to pay $1.8 million in restitution.
\n(SF) In April 2015, a licensed mental health counselor in Miami, Florida was sentenced to 4
\nyears in prison and ordered to pay $13.6 million in joint and several restitution after pleading
\nguilty to conspiracy to commit health care fraud. The defendant worked as a therapist for Health
\nCare Solutions Network, Inc., in Florida (HCSN-FL). He admitted that he provided intensive
\ntherapy to mental health patients who were ineligible to receive the therapy or could not benefit
\nfrom partial hospitalization program (PHP) services, including patients suffering from dementia,
\nmental retardation, and Alzheimers disease. He signed fabricated PHP therapy notes and other
\nmedical records, which were used to support the false claims to Medicare and Medicaid. During
\nhis employment, the defendant and his co-conspirators submitted approximately $31 million in
\nfalse claims to Medicare and Florida Medicaid programs.
\nDevice Companies
\nIn December 2014, OtisMed Corp. of Newark, New Jersey was ordered to pay $34.4 million in
\nfines and $5.1 million in forfeiture after pleading guilty to distributing, with the intent to defraud
\nand mislead, adulterated medical devices into interstate commerce in violation of the Food,
\nDrug, and Cosmetic Act. OtisMed submitted a pre-market notification to the Food and Drug
\nAdministration (FDA) seeking clearance to market the OtisKnee in October 2008. In September
\n2009, the FDA sent OtisMed a notice that its submission was denied, stating that the company
\nfailed to demonstrate that the OtisKnee was as safe and effective as other legally marketed
\ndevices. Despite his awareness of the letter and advice from legal counsel that it would be
\nunlawful to continue distributing the OtisKnee, the Chief Executive Officer ordered employees
\nat OtisMed to distribute more than 200 OtisKnee devices to surgeons throughout the United
\nStates. The CEO and others also concealed the shipments from the FDA, and did not disclose
\nthat distributing OtisKnee was prohibited. The CEO pleaded guilty to introducing adulterated
\nmedical devices in interstate commerce and was sentenced on June 29, 2015 to 24 months in
\nprison. Apart from the criminal plea, OtisMed agreed to pay a $41.2 million settlement to
\nresolve its civil FCA liability arising from the marketing and distribution of the OtisKnee, and to
\nbe excluded from participation in federal health care programs for 20 years.
\nIn February 2015, medical device manufacturer ev3 Inc., formerly known as Fox Hollow
\nTechnologies Inc., agreed to pay $1.3 million to resolve civil FCA allegations that it caused
\n15<\/p>\n
certain hospitals to submit false claims to Medicare for unnecessary inpatient admissions for
\nprocedures involving its atherectory device. Atherectomy is a minimally-invasive surgical
\nprocedure that uses a small cutting device to remove atherosclerosis, or hardening of the arteries,
\nfrom large blood vessels within the body. The government alleged that to increase hospital
\npurchases of its atherectomy devices, Fox Hollow advised hospitals that they should bill
\natherectomy procedures as more expensive inpatient claims, as opposed to less costly outpatient
\nclaims. As a result, certain hospitals allegedly claimed greater reimbursement than they were
\nentitled to receive for procedures involving Fox Hollows devices.
\nIn April 2015, Medtronic plc and certain affiliated Medtronic companies agreed to pay
\n$4.4 million to settle civil FCA allegations that they made false statements to the U.S.
\nDepartment of Veterans Affairs and the U.S. Department of Defense regarding the country of
\norigin of certain Medtronic products sold to the United States. The Trade Agreements Act of
\n1979 (TAA) generally requires companies selling products to the United States to manufacture
\nthem in the United States or in another designated country. The settlement resolved allegations
\nthat Medtronic sold to the United States products manufactured in China and Malaysia; under the
\nTAA, the Government is precluded from acquiring the products at issue from those countries.
\nThe specific Medtronic products included anchoring sleeves sold with cardiac leads and used to
\nsecure the leads to patients, certain instruments and devices used in spine surgeries, and a
\nhandheld patient Helpant used with a wireless cardiac device.
\nIn July 2015, NuVasive Inc. of San Diego, California, agreed to pay $13.5 million to resolve
\nallegations that the company promoted its CoRoent System for surgical uses that were not
\napproved or cleared by the FDA and paid kickbacks to induce physicians to use its CoRoent
\nSystem. The government alleged that, between 2008 and 2013, NuVasive promoted its CoRoent
\nSystem for certain surgical uses, including for use in treating two complex spine deformities:
\nsevere scoliosis and severe spondylolisthesis. Because these specific uses were not approved or
\ncleared by the FDA, the claims submitted to Medicare and Medicaid from physicians and
\nhospitals for these spine surgeries were not eligible for reimbursement. The government also
\nalleged that NuVasive knowingly offered and paid illegal remuneration to certain physicians to
\ninduce them to use the CoRoent System in spine fusion surgeries, in violation of the Federal antikickback
\nstatute. The alleged illegal remuneration consisted of promotional speaker fees,
\nhonoraria, and expenses relating to physicians attendance at events sponsored by a group that
\nwas allegedly created, funded, and operated by NuVasive.
\nDrug Companies
\nIn January 2015, Daiichi Sankyo Inc., a global pharmaceutical company, agreed to pay
\n$39 million to resolve civil FCA allegations that it paid kickbacks to induce physicians to
\nprescribe Daiichi drugs, including Azor, Benicar, Tribenzor and Welchol. The alleged kickbacks
\ntook the form of honoraria payments, lavish meals, and other remuneration to physicians who
\nparticipated, or supposedly participated, in speaker programs. Daiichi allegedly made payments
\nto physicians even when physicians took turns speaking on duplicative topic (sample nursing essay examples by the best nursing assignment writing service)s over Daiichipaid
\ndinners, the recipient spoke only to members of his or her own staff in his or her own office,
\n16<\/p>\n
or the associated dinner was so lavish that its cost exceeded Daiichis own internal cost
\nlimitation of $140 per person.
\nIn February and May 2015, Medco Health Solutions, Inc., a wholly-owned subsidiary of the
\npharmacy benefit manager Express Scripts Holding Company, and AstraZeneca, a
\npharmaceutical manufacturer, agreed to pay a total of $15.8 million to settle civil FCA
\nallegations of a kick-back scheme involving marketing and selling pharmaceutical products. The
\ngovernment alleged that AstraZeneca paid kickbacks to Medco in exchange for identifying
\nNexium as the sole and exclusive proton pump inhibitor on certain of Medcos prescription
\ndrug lists known as formularies. The alleged remuneration from AstraZeneca took the form of
\nprice concessions on certain AstraZeneca drugs other than Nexium, namely on Prilosec, Toprol
\nXL, and Plendil.
\nIn July 2015, drug manufacturers AstraZeneca LP and Cephalon, Inc. agreed to pay a total of
\n$54 million to settle civil FCA allegations that they knowingly underpaid rebates owed under the
\nMedicaid Drug Rebate Program (MDRP). Pursuant to the MDRP, drug manufacturers must pay
\nquarterly rebates to state Medicaid programs in exchange for Medicaids coverage of the
\nmanufacturers drugs. The rebates are based, in part, on the Average Manufacturer Prices
\n(AMPs) that the manufacturers report to the government for each of their covered drugs. The
\nsettlements with AstraZeneca and Cephalon resolved allegations that they underreported AMPs
\nfor a number of their drugs by improperly reducing the reported AMPs for service fees they paid
\nto wholesalers. As a result, the government contended that AstraZeneca and Cephalon underpaid
\nquarterly rebates owed to the states and caused the United States to be overcharged for its
\npayments to the states for the Medicaid program.
\nDurable Medical Equipment (DME)
\nIn December 2014, a medical supplies company owner was sentenced in Baton Rouge, Louisiana
\nto 156 months imprisonment for submitting hundreds of false and fraudulent claims to Medicare
\nfor medical devices over a two year period. For instance, he submitted claims for brace kits,
\nregardless of whether any of the Medicare beneficiaries named in the claims needed or had
\nprescriptions for the items, submitted claims for custom-fabricated devices which were never
\nprovided, and submitted numerous claims for expensive replacement power wheelchairs that he
\nfalsely claimed had been damaged or destroyed by a hurricane. The owner was ordered to make
\nrestitution to the Medicare program in the amount of $1.2 million, to forfeit the proceeds of his
\ncriminal activity up to an additional $1.2 million, and to serve a two-year term of supervised
\nrelease.
\n(SF) In February 2015 and May 2015, two individuals pled guilty to health care fraud conspiracy
\nfor their roles in a $13 million long-running scheme to submit false claims for durable medical
\nequipment to a government-sponsored organization for managed care in New York. The scheme
\ninvolved the defendants using information for approved, in-network equipment providers to
\nobtain approvals that were then used to secure payments on behalf of sham companies that the
\ndefendants set up. Companies believed to have been involved in the scheme submitted
\nfraudulent claims to the managed care organization in amounts over $13 million since 2008. In
\n17
\nSeptember 2015, one of the defendants was sentenced to 21 months in jail and ordered to pay
\nover $337,000 in forfeiture and the same amount in restitution.
\n(SF) In March 2015, an owner of Colonial Medical Supply, a durable medical equipment
\ncompany in Los Angeles, was convicted after a jury trial for his role in a $3.3 million Medicare
\nfraud scheme. The evidence at trial established that the defendant paid cash kickbacks to
\nmedical clinics for fraudulent prescriptions for durable medical equipment, such as expensive
\npower wheel chairs, which the patients did not need. The defendant then used these
\nprescriptions to bill Medicare for the medically unnecessary equipment. In May 2015, the
\ndefendant was sentenced to 84 months imprisonment.
\n(SF) In March 2015, an owner of Ezcor-9000, Inc., a durable medical equipment company in
\nValencia, California, was convicted after an eight-day jury trial for her role in a $3.5 million
\nMedicare fraud scheme. The evidence at trial established that the defendant paid illegal
\nkickbacks to patient recruiters in exchange for patient referrals. The evidence also showed that
\nthe defendant paid kickbacks to physicians for fraudulent prescriptionsprimarily for medically
\nunnecessary, but expensive, power wheelchairsthat she then used to support her fraudulent
\nbills to Medicare. In June 2015, the defendant was sentenced to 97 months in prison.
\nIn May 2015, DME suppliers Orbit Medical Inc. and its partial successor, Rehab Medical Inc.,
\nagreed to pay $7.5 million to settle civil FCA allegations that Orbit submitted false claims to
\nfederal health care programs for power wheelchairs and accessories. The settlement resolved
\nallegations that Orbit sales representatives knowingly altered physician prescriptions and
\nsupporting documentation to get Orbits power wheelchair and accessory claims paid by
\nMedicare, the Federal Employees Health Benefits Plan and the Defense Health Agency. In
\nparticular, the government alleged that Orbit sales representatives changed or added dates to
\nphysician prescriptions and chart notes to falsely document that the prescription was sent to the
\nsupplier within 45 days of the face-to-face beneficiary exam; changed the physician prescription,
\nchart notes, and other documentation to falsely establish medical necessity for the power
\nwheelchair or accessory; and added facsimile stamps to supporting documentation to make it
\nappear as though the physicians office had sent the documents to Orbit.
\nIn May 2015, a DME supplier in Austin, Texas was sentenced to 36 months imprisonment and 3
\nyears supervised release, and ordered to pay $846,171 in restitution for submitting fraudulent
\nbills through the Department of Labor for items never sent to patients. The supplier was billing
\nprimarily for electrode pads. The false claims were for DME supplies for U.S. Postal employees.
\nThe scheme ran for at least three years and involved billings to the Government of over $1
\nmillion. The supplier paid the restitution\/forfeiture up-front, and the forfeiture included cash and
\na 2014 BMW.
\n(SF) In May 2015, a registered nurse and owner of a DME company in Los Angeles, California
\nwas sentenced to 4 years in prison and ordered to pay $4.3 million in joint and several restitution
\nafter being convicted of health care fraud and laundering of monetary instruments. According to
\nthe investigation, the nurse\/owner and her co-conspirators used cash and checks to pay illegal
\nkickbacks to recruit Medicare beneficiaries for power wheelchairs and other DME, to which the
\nbeneficiaries did not have a legitimate medical need. She and her co-conspirators also paid
\n18<\/p>\n
illegal kickbacks to a physician in exchange for writing false prescriptions and documents for the
\nDME, which was then used to fraudulently bill Medicare.
\nElectronic Health Records
\nIn June 2015, the Chief Financial Officer (CFO) of Shelby Regional Medical Center of Center,
\nTexas, was sentenced to 1 year and 11 months in jail and ordered to pay $4.4 million in
\nrestitution after pleading guilty to making a false statement. As CFO he oversaw the
\nimplementation of electronic health records (EHR) for the hospital and was responsible for
\nattesting that the hospitals EHR platform met meaningful use requirements in order to qualify
\nfor incentive payments under Medicares EHR Incentive Program. During FY 2012, Shelby
\nRegional did not meaningfully use the EHR platform, despite an attestation from the CFO that it
\ndid. He falsely certified to CMS that Shelby Regional met the meaningful use requirements,
\neven though he was fully aware that Shelby Regional used the EHR system sparingly and did not
\nmeet the criteria for incentives. As a result of his conduct, Shelby Regional received a $785,655
\nEHR incentive payment from CMS in FY 2012.
\nHealth Maintenance Organization
\nIn May 2015, an employee of several organizations in Miami, Florida, including Florida
\nHealthcare Plus, Inc. (FHCP), was sentenced to 2 years in prison and ordered to pay $16 million
\nin joint and several restitution after pleading guilty to conspiracy to commit health care fraud and
\nwire fraud. FHCP was a health maintenance organization in Florida. According to the
\ninvestigation, the defendant submitted fraudulent Medicare and Medicaid enrollment
\napplications for beneficiaries, which claimed that the beneficiaries resided in Florida, when they
\nactually resided in Nicaragua and the Dominican Republic. In addition to the defendant, five
\nother individuals connected to this health care fraud scheme were sentenced in June 2015 to a
\ncombined 10 years and 3 months in prison and ordered to pay $16 million in joint and several
\nrestitution.
\nHome Health Providers
\n(SF) In October 2014, the director of two Miami-based businesses that purportedly provided
\nhome health services to Medicare beneficiaries was sentenced to 10 years and 1 month in prison
\nand ordered to pay $18.6 million in restitution after pleading guilty to conspiracy to commit
\nhealth care fraud and payment of kickbacks in connection with a federal healthcare program.
\nThe investigation related that the director paid co-conspirators thousands of dollars in kickbacks
\nin exchange for referring Medicare beneficiaries and also paid kickbacks to the owner of a
\nmedical clinic in exchange for home health service prescriptions.
\nIn November 2014, CareAll Management LLC, a Nashville, Tennessee home health provider,
\nagreed to pay $25 million to settle civil FCA allegations that it submitted false and upcoded
\nhome health care billings to the Medicare and Medicaid programs. The settlement resolves
\nallegations that CareAll overstated the severity of patients conditions to increase billings and
\nbilled for services that were not medically necessary and rendered to patients who were not
\nhomebound.
\n19<\/p>\n
(SF) In November 2014, an administrator and owner at two Miami-based Florida businesses
\nwhich purportedly provided home health care and physical therapy services to Medicare
\nbeneficiaries was sentenced to 6 years and 8 months of incarceration and ordered to pay
\n$45 million in restitution after pleading guilty to conspiracy to commit health care fraud. The
\ninvestigation revealed that administrator\/owner and her co-conspirators paid kickbacks to patient
\nrecruiters for the referral of patients and for the provision of medically unnecessary or sham
\nprescriptions, plans of care, and certifications for therapy and home health services. The
\nbusinesses submitted approximately $74 million in fraudulent claims for home health services to
\nMedicare and were paid approximately $45 million on those claims. Another co-conspirator was
\npreviously sentenced to 5 years in prison and ordered to pay $27 million in restitution.
\n(SF) In January 2015, the owner of Nations Best Home Health, a Miami home health care
\nagency, was sentenced to 106 months imprisonment for his role in a $35 million Medicare fraud
\nscheme. According to his plea agreement, the defendant and his co-conspirators operated
\nNations Best for the purpose of billing the Medicare program for, among other things, physical
\ntherapy and other home health care services that were not medically necessary or not provided.
\nThe co-conspirators paid kickbacks to patient recruiters in exchange for patient referrals to
\nNations Best, as well as prescriptions, plans of care, and certifications for medically
\nunnecessary home health care services, all of which were used to fraudulently bill the Medicare
\nprogram for unnecessary home health care services.
\nIn January 2015, an owner and operator of Norfolk, Virginia based Community Personal Care
\nhome health care services was sentenced to 63 months in prison, followed by three years of
\nsupervised release, and his wife who was the companys office administrator and executive
\nHelpant was sentenced to 25 months in prison, followed by three years of supervised release for
\ntheir operation of a massive false billing scheme. During a three week trial, the government
\nproved that 7,800 fraudulent claims were submitted to the Virginia Medicaid program, falsely
\nrepresenting that personal care and respite care services had been provided to 78 Medicaid
\nrecipients by Community Personal Care. To conceal the fraudulent payments, the defendants
\ndirected employees to alter the companys office records, including home health aide time
\nsheets. Both defendants were ordered together to pay $1.5 million in restitution.
\n(SF) Between January 2015 and May 2015, five patient recruiters pled guilty for their roles in a
\n$4.5 million Medicare fraud scheme involving Joystar Home Health Services, LLC, a home
\nhealth care company located in Richmond, Texas. According to court documents, each of the
\ndefendants agreed with Joystars owner and director of nursing to refer Medicare beneficiaries to
\nJoystar in exchange for kickbacks. Joystar then billed Medicare for home health care services
\nthat were medically unnecessary or not provided. The co-conspirators in the fraud also paid
\nbeneficiaries to participate in the scheme and paid physicians to authorize medically unnecessary
\nservices. Previously, the owner of Joystar was sentenced to five years imprisonment following
\nhis guilty plea to structuring over $1.8 million to conceal the funds he used to pay kickbacks to
\npatient recruiters and physicians. Joystars director of nursing, who pled guilty to health care
\nfraud and structuring, is awaiting sentencing.
\nIn February 2015, ResCare Iowa Inc., a home health service provider, agreed to pay $5.6 million
\nto settle civil FCA allegations that it submitted false home health care billings to Medicare and
\n20
\nMedicaid. Medicare and the state of Iowas Medicaid program require an independent physician
\nto certify that home health care services are medically necessary and to order the specific type
\nand amount of health care services to be provided by the home health agency (HHA). The
\nsettlement resolves allegations that ResCare Iowa billed the government for services provided to
\nMedicare and Medicaid patients in Iowa without documenting compliance with these
\nrequirements.
\n(SF) In April 2015, the Miami, Florida owner of a business that purportedly provided home
\nhealth care and physical therapy services to Medicare beneficiaries was sentenced to 9 years and
\n5 months in prison and ordered to pay $21 million in restitution after pleading guilty to
\nconspiracy to commit health care fraud. According to the investigation, the owner and his coconspirators
\npaid patient recruiters to place beneficiaries at the business. The recruiters then sent
\nthe beneficiaries to doctors to obtain prescriptions for home health services that were not
\nmedically necessary and were not provided. The man and his co-conspirators caused patient
\ndocumentation to be falsified in order to bill Medicare approximately $32 million for the
\nfraudulent services. He was indicted in May 2013 and was an HHS-OIG Most Wanted Fugitive
\nliving in Cuba until he returned to the United States in September 2014 and was arrested.
\n(SF) Between April and July 2015, three defendants were sentenced in the Eastern District of
\nMichigan to a combined 20 years and 8 months in jail and ordered to pay more than $22 million
\nin joint and several restitution after being convicted of conspiracy to commit health care fraud
\nand other charges. Two of the defendants jointly operated several home health agencies in
\nMichigan, while the third, who was a daughter of one of the others, co-operated a home health
\nagency. According to the investigation, the three defendants, along with their co-conspirators,
\npaid kickbacks and bribes to recruiters and others for beneficiary information that would be used
\nto falsely bill Medicare millions for home health services that were medically unnecessary and
\nnot performed. Another co-conspirator, who jointly operated several of the home health care
\nfacilities, was indicted in September 2012, but investigators believe that he fled the country.
\n(SF) In April 2015, the owner of AA Advanced Home Health Inc., a Miami home health care
\nagency, was sentenced to 113 months imprisonment for his role in a $32 million home health
\ncare fraud scheme. As part of his guilty plea, the defendant admitted that he and his coconspirators
\npaid kickbacks to patient recruiters in exchange for patient referrals and billed
\nMedicare for physical therapy and other home health care services that were medically
\nunnecessary or not provided.
\n(SF) In April 2015, the owner of multiple home health care agencies in the Detroit area was
\nsentenced to 120 months imprisonment after being convicted in an eight-week jury trial for his
\nrole in a $29.1 million Medicare fraud scheme. The wide-ranging scheme involved
\napproximately 30 purported medical clinics in the Detroit area that paid kickbacks to patient
\nrecruiters and billed Medicare for home health services that were not provided. Eight codefendants
\npreviously pled guilty and two co-defendants were convicted at trial. One of the codefendants
\nwho owned two home health care companies involved in the scheme pled guilty and
\nwas sentenced to 80 months imprisonment in July 2015. That defendant also received proceeds
\nof the home health care fraud through bank accounts he controlled, withdrew substantial sums
\nfor his personal use, failed to report these proceeds on his individual federal income tax returns,
\nand pled guilty to filing a false tax return.
\n21<\/p>\n
(SF) In May 2015, the owner of a Miami-based business that purportedly provided home health
\nand therapy services to Medicare beneficiaries was sentenced to 10 years in prison and ordered
\nto pay $13 million in joint and several restitution after pleading guilty to conspiracy to commit
\nhealth care fraud. The owner admitted that he and his co-conspirators billed Medicare for,
\namong other things, expensive physical therapy and home health care services that were not
\nmedically necessary and\/or were not provided. The owner and his co-conspirators also paid
\nkickbacks and bribes to other co-conspirators in doctors’ offices and clinics in exchange for
\nproviding home health and therapy prescriptions. From approximately January 2009 to
\nNovember 2014, Longcare submitted more than $13 million in claims to Medicare for home
\nhealth services that were not necessary and\/or were not provided. Eight defendants who
\nparticipated in the fraud scheme were previously sentenced to a combined 53 years and 7 months
\nin jail.
\nIn June 2015, a group of home health care companiesFriendship Home Healthcare, Inc.,
\nFriendship Home Health, Inc., Angel Private Duty and Home Health, and Friendship Home
\nHealth Agency, LLC. (collectively Friendship)and their owner agreed to pay $6.5 million to
\nresolve civil FCA allegations that they improperly billed federal health care programs for home
\nhealth services. The settlement resolves allegations that Friendship submitted false claims for
\nprivate duty nursing services that were furnished or supervised by a woman who was excluded
\nfrom billing federal and state health care programs and that Friendship submitted required forms
\ncontaining the forged signature of Friendships Director of Nursing.
\n(SF) In July 2015, an owner and controller of multiple home health care agencies in the Detroit
\narea and a co-owner were convicted at trial for their roles in a $33 million home health care fraud
\nscheme. One co-defendant, a patient recruiter, previously pled guilty for her role in the scheme.
\nAccording to the evidence at trial, patient recruiters were paid kickbacks to bring Medicare
\nbeneficiaries into the scheme. In exchange for cash kickbacks and prescriptions for controlled
\nsubstances, the beneficiaries signed forms and therapy visit sheets that were later falsified to
\nindicate they received home health services that were never provided. Physicians employed by
\none of the defendants then purported to examine non-homebound Medicare beneficiaries for
\nhome health care services, signed false paperwork so they could be billed through four home
\nhealth agencies, and provided the patients with narcotic prescriptions.
\nHospice Care
\nIn February 2015, for-profit hospice provider Good Shepherd Hospice Inc., whose main location
\nis in Oklahoma City, and certain affiliated entities agreed to pay $4 million to resolve civil FCA
\nallegations that they submitted false claims for hospice patients who were not terminally ill. The
\nMedicare hospice benefit is available for patients who elect palliative treatment for a terminal
\nillness and have a life expectancy of six months or less if their illness runs its normal course.
\nThe settlement resolved allegations that Good Shepherd knowingly submitted false claims for
\nhospice care for patients who were not terminally ill by pressuring staff to meet admissions and
\ncensus targets, paying bonuses to staff based on the number of patients enrolled, hiring medical
\ndirectors based on their ability to refer patients, and failing to properly train staff on the hospice
\neligibility criteria.
\n22
\nIn June 2015, Covenant Hospice Inc., a non-profit hospice service provider, agreed to pay
\n$10 million to settle civil FCA allegations that it overbilled Medicare, TRICARE and Medicaid
\nfor hospice services. Hospice benefits are generally available only for patients who have a life
\nexpectancy of six months or less if their disease runs its normal course. Patients admitted to a
\nhospice stop receiving care to cure their illnesses and instead receive medical care focused on
\nproviding them with relief from the symptoms, pain and stress of a terminal illness. The
\nsettlement resolved allegations that Covenant improperly submitted hospice claims for higherlevel
\ninpatient care that should have been billed at lower-level routine home care.
\n(SF) In June 2015, two physicians and three owners of hospice and home health care companies
\nin the greater Detroit area were charged for their roles in a $58.3 million scheme to defraud
\nMedicare by submitting claims for home health care and hospice services that were medically
\nunnecessary or not provided. According to court documents, the owners of the home health care
\nand hospice companies, two of whom are also registered physical therapists, paid physicians and
\npatient recruiters kickbacks for referring patients, then billed Medicare for services that were
\nmedically unnecessary or never provided. The companies, located in Livonia, Michigan, were A
\nPlus Hospice and Palliative Care, At Home Hospice, and At Home Network Inc., a home health
\ncare agency. The physicians who solicited and received kickbacks also submitted claims to
\nMedicare for medically unnecessary physician services. Court documents also allege that one of
\nthose physicians used prescriptions for controlled substances to induce beneficiaries to allow At
\nHome Network to bill Medicare for purportedly providing services to the beneficiaries.
\nHospitals and Health Systems
\nIn October 2014, Dignity Health, the fifth largest health system in the country formerly known as
\nCatholic Healthcare West, agreed to pay $36.7 million to settle civil FCA allegations that 13 of
\nits hospitals in California, Nevada, and Arizona knowingly submitted false claims to Medicare
\nand TRICARE by admitting patients who could have been treated on a less costly, outpatient
\nbasis. Specifically, the government alleged that certain Dignity hospitals billed Medicare and
\nTRICARE for inpatient care for certain patients who underwent elective cardiovascular
\nprocedures and elective, minimally-invasive kyphoplasty procedures and patients with certain
\ncommon medical diagnoses where admission as an inpatient was medically unnecessary and
\nappropriate care could have been provided in a less costly outpatient or observation setting.
\nIn December 2014, the owner\/operator of a hospice agency in Greenwood, Mississippi was
\nsentenced to 5 years and 10 months in prison and ordered to pay $7.9 million in restitution after
\npleading guilty to conspiracy to commit healthcare fraud. The investigation revealed that, from
\naround March 2010 to February 2013, the owner\/operator and her co-conspirators used the
\nhospice to submit millions of dollars in fraudulent claims to Medicare, for which they were
\nreimbursed more than $12.5 million. These false billings included claims for patients who were
\nnot eligible for hospice benefits because they were not terminally ill and claims based on medical
\nrecords containing forged signatures of the beneficiaries, the hospice Medical director, and\/or the
\nbeneficiaries attending physician. In addition, the defendant, through the hospice, submitted
\nclaims to Medicare based on patient referrals from physicians who, in actuality, never referred
\npatients. Many of the patient names were obtained from a medical records clerk, who has been
\nseparately charged for accepting over $240,000 in kickbacks from the defendant. The defendant
\n23<\/p>\n
used the funds obtained from Medicare to purchase more than $1.4 million in vehicles and
\nproperty.
\nIn December 2014, five senior hospital administrators and five hospital physicians and a
\npodiatrist in Illinois were charged with criminal violation of conspiracy to receive kickbacks and
\nreceiving kickbacks. In December 2014, two administrators pled guilty and the remaining
\nadministrators went to trial. After a seven-week trial, on March 19, 2015, the jury found each of
\nthe defendants guilty of the charges alleged. The Court sentenced one administrator to 54
\nmonths imprisonment and a $770,000 fine, another administrator was sentenced to 21 months
\nimprisonment, and a third was sentenced to a term of imprisonment of 12 months and 1 day and
\nto pay a fine of $25,000 on July 30, 2015. The Court has also entered joint and several orders of
\nforfeiture against the administrators in the amount of $10.5 million and $8.5 million. Three
\ndoctors pled guilty and one has been sentenced to six months imprisonment, two went to trial
\nand one was acquitted, the third doctor is set to go trial in 2016.
\nIn February 2015, Community Health Systems Professional Services Corporation (CHS), a
\nnationwide hospital management company, and three of its affiliated New Mexico hospitals
\nagreed to pay $75 million to settle civil FCA allegations that they made illegal donations to
\ncounty governments that were used to fund the state share of Medicaid payments to the hospitals.
\nUnder a program discontinued in 2014, the federal government reimbursed New Mexico for
\napproximately 75 percent of supplemental Medicaid expenditures in rural hospitals, and required
\nthat New Mexicos 25 percent matching payments had to consist of state or county funds, and
\nnot donations from private hospitals. The government alleged that CHS knowingly made
\nimproper donations to Chaves, Luna, and San Miguel counties, which were then used by the
\ncounties, and subsequently the state, to obtain federal matching payments. The government
\nalleged that CHS concealed the true nature of these donations, and as a result of its scheme,
\nreceived supplemental Medicaid payments which were funded by the United States in the
\namount of three times CHS donations.
\nIn April 2015, The Medical Center of Central Georgia, Inc. (MCCG) agreed to pay $20 million
\nto resolve civil FCA allegations that it submitted false claims to Medicare for medically
\nunnecessary inpatient admissions, including zero-day stays, one-day stays, cardiac stays with a
\nprocedure, and cardiac stays without a procedure. Specifically, these services should have been
\nbilled as outpatient or observation services due to the absence of medical necessity for inpatient
\nservices.
\nIn April 2015, Citizens Medical Center, a county-owned hospital in Victoria, Texas, agreed to
\npay $21.7 million to settle civil FCA allegations that it engaged in improper financial
\nrelationships with referring physicians. The settlement resolved allegations that the hospital
\nprovided compensation to several cardiologists that exceeded the fair market value of their
\nservices and that the hospital paid bonuses to emergency room physicians that improperly took
\ninto account the value of their cardiology referrals in violation of the Stark Law.
\n24<\/p>\n
In June 2015, Childrens Hospital in Washington, DC, Childrens National Medical Center Inc.,
\n(CNMC) and its affiliated entities agreed to pay $12.9 million to resolve civil FCA allegations
\nthat they submitted false cost reports and other applications to the components and contractors of
\nHHS, as well as to Virginia and District of Columbia Medicaid programs. The settlement
\nresolves allegations that CNMC misstated information regarding its available bed count and
\noverhead costs on cost reports and applications that were used by HHS and Medicaid programs
\nto calculate reimbursement rates to CNMC.
\nIn June 2015, Community Health Network (CHN), an Indiana-based non-profit health system,
\nagreed to pay over $20 million to resolve allegations that it submitted false claims to the
\nMedicare and Medicaid programs. CHN contracted with free-standing ambulatory surgery
\ncenters (ASCs) to provide outpatient surgical services to CHN patients. When billing Medicare
\nand Medicaid, however, CHN allegedly represented that the surgery was performed in the outpatient
\ndepartment of CHNs hospitals, rather than in an ASC. Based on this prohibited practice,
\nCHN allegedly received a higher reimbursement from the Medicare and Medicaid programs than
\nit was entitled.
\n(SF) In July 2015, the former owner and chief executive officer, the chief operating officer, and
\nthe chief financial officer of Sacred Heart Hospital, a now-closed acute care facility in Chicago,
\nwere sentenced to 54 months, 21 months, and 12 months and a day in prison, respectively, for
\ntheir roles in a Medicare and Medicaid kickback scheme. Following a seven-week trial, a jury
\nconvicted these defendants of conspiring to violate the AKS and of substantive AKS violations.
\nThe evidence at trial revealed that the defendants were involved in a conspiracy to pay
\nphysicians hundreds of thousands of dollars in illegal bribes and kickbacks to induce patient
\nreferrals to the hospital and to increase the patient census, which, in turn, increased hospital
\nrevenue. Five other defendants pled guilty in the case, including three physicians, a chief
\noperating officer, and the vice president of geriatric services. Another physician defendant was
\nfound guilty of violating the AKS following a bench trial that ended in June 2015. One
\nremaining defendant in the case, a physician, is scheduled for trial in February 2016.
\n(SF) In August 2015, a jury in the Southern District of Florida returned guilty verdicts against a
\nformer medical director and three therapists of Health Care Solutions Network Inc., a defunct
\npartial hospitalization program that purported to provide intensive psychiatric treatment to
\nMedicare and Medicaid beneficiaries. The trial evidence showed that the former medical
\ndirector routinely signed what he knew to be fabricated and altered medical records without
\nreviewing the substance of the records and, in most instances, without ever meeting with the
\npatients. The evidence at trial also demonstrated that the three therapists fabricated medical
\nrecords to support Healthcare Solution Networks false and fraudulent claims for reimbursement
\nfor intensive psychiatric services. In total, Healthcare Solutions Network submitted
\napproximately $63.7 million in fraudulent claims to Medicare and Medicaid, which paid $28
\nmillion on those claims. Two co-defendants were each sentenced to six years imprisonment in
\nFebruary 2015, following their convictions in a separate November 2014 trial.
\n25
\nIn September 2015, North Broward Hospital District, a special taxing district of the state of
\nFlorida that operates hospitals and other health care facilities, agreed to pay $69.5 million to
\nsettle civil FCA allegations that it engaged in improper financial relationships with referring
\nphysicians. The settlement resolved allegations that the hospital district provided compensation
\nto nine employed physicians that exceeded the fair market value of their services in violation of
\nthe Stark Law.
\nIn September 2015, Columbus Regional Healthcare System (Columbus Regional) and a
\nphysician agreed to pay more than $25 million to settle civil FCA allegations that they submitted
\nclaims to federal health care programs that violated the Stark Law and that misrepresented the
\nlevel of services they provided. The government alleged that Columbus Regional provided
\nexcessive salary and directorship payments to the physician that violated the Stark Law,
\nsubmitted claims for services at higher levels than supported by the documentation, and
\nsubmitted claims for radiation therapy at higher levels than the therapy that was provided.
\nUnder the settlement agreement, Columbus Regional agreed to pay $25 million, plus additional
\ncontingent payments not to exceed $10 million, for a maximum settlement amount of $35
\nmillion; the physician has agreed to pay $425,000.
\nIn September 2015, Adventist Health Care System, a non-profit healthcare organization that
\noperates hospitals and other healthcare facilities in 10 states, agreed to pay $115 million to settle
\ncivil FCA allegations that they submitted false claims to Medicare and Medicaid. Adventist
\nallegedly paid bonuses to its employed physicians based on the number of tests and procedures
\nthey ordered and billed Medicare for its employed physicians professional services using
\nimproper coding modifiers.
\nIdentity Theft
\nIn June 2015, an individual in Naples, Florida was sentenced to 6 years in prison and ordered to
\npay $351,358 in joint and several restitution after pleading guilty to charges relating to health
\ncare fraud, identity theft, and distribution of controlled substances. He admitted that he and his
\nco-conspirators, including his brother, submitted claims for reimbursement from Medicare,
\nMedicaid, and TRICARE for prescriptions that were not filled or provided to beneficiaries or
\nrecipients, including prescriptions for patients that had not been written or authorized by a
\nlicensed physician. The brother, who was a licensed pharmacist and owner of a pharmacy used
\nto further the scheme, previously pleaded guilty to conspiracy to commit health care fraud and
\nwas sentenced to 2 years in prison in March 2014.
\nIn June 2015, a husband and wife were sentenced to a combined 30 years and 9 months of
\nincarceration and ordered to pay over $1.2 million in joint and several restitution and forfeiture
\nafter being convicted of charges related to health care fraud. Evidence at trial showed that the
\ntwo operated a sham clinic in Coral Gables, Florida, and employed unlicensed medical
\nprofessionals to bill Medicare for HIV services that were never rendered. The clinic used billing
\nnumbers of other medical professionals without their knowledge in order to submit the
\nfraudulent claims. The couple also paid co-conspirators to recruit Medicare beneficiaries for
\ntheir Medicare identification numbers, and they instructed the beneficiaries to enroll into a
\ntargeted Medicare Part C & D plan.
\n26
\nLaboratories
\nIn August 2015, in Newark, New Jersey, three physicians were sentenced after pleading guilty to
\ncharges related to a test-referral kickback scheme. According to the investigation, Biodiagnostic
\nLaboratory Services LLC (BLS) solicited and paid bribes to physicians in exchange for referring
\npatient blood specimens to the laboratory. As part of the kickback scheme, BLS entered into
\nsham consulting agreements, sham rental and service agreements, and offered cash and other
\ninducements, such as third party businesses, credit card payments, and valuable items (cars and
\nelectronics). BLS used the patient blood specimens to submit more than $100 million in claims
\nto Medicare and private insurers. In April and May of 2015, the physicians admitted to
\naccepting approximately $1,500 or more per month in return for referring patient blood
\nspecimens. The three were sentenced to a combined 7 years and 2 months in jail and ordered to
\npay a combined $434,300 in restitution. BLSs owner pleaded guilty to conspiracy to commit
\nbribery and money laundering and is awaiting sentencing.
\nIn April 2015, two cardiovascular testing laboratoriesHealth Diagnostics Laboratory Inc.
\n(HDL), of Richmond, Virginia, and Singulex Inc., of Alameda, Californiaagreed to resolve
\ncivil FCA allegations that they paid physicians kickbacks in exchange for patient referrals and
\nbilled federal health care programs for medically unnecessary testing. The laboratories allegedly
\ninduced physicians to refer patients for blood tests by paying them processing and handling fees
\nof between $10 and $17 per referral and by routinely waiving patient co-pays and deductibles.
\nUnder the settlements, HDL will pay $47 million and Singulex will pay $1.5 million.
\nNursing Homes and Facilities
\nIn October 2014, Extendicare Health Services Inc., a nationwide skilled nursing facility, and its
\nsubsidiary Progressive Step Corporation (ProStep), a rehabilitation services provider, agreed to
\npay $38 million to settle civil FCA allegations that they billed Medicare and Medicaid for
\nnursing services that were so deficient that they were effectively worthless and billed Medicare
\nfor medically unreasonable and unnecessary rehabilitation therapy services. The settlement
\nresolves allegations that Extendicare, among other things, failed to have a sufficient number of
\nskilled nurses to adequately care for its skilled nursing residents, failed to provide adequate
\ncatheter care to some of the residents, and failed to follow the appropriate protocols to prevent
\npressure ulcers or falls. As a result of the inadequate care, the government alleged that patients
\nsuffered fractures, head injuries, malnutrition, dehydration, pressure ulcers, infections, and
\namputation of limbs. In addition, the settlement resolves allegations that Extendicare provided
\nmedically unreasonable and unnecessary rehabilitation therapy services to its Medicare Part A
\nbeneficiaries so that it could bill Medicare for those patients at the highest possible per diem rate.
\nIn March 2015, two skilled nursing facility operatorsthe Catholic Health Care System, a\/k\/a
\nArchCare and Ross Manor, agreed to pay a total of $4.7 million to resolve civil FCA allegations
\nthat they submitted false claims to Medicare for rehabilitation services delivered by their
\nsubcontractor, RehabCare Group East, Inc. (RehabCare), a part of Kindred Healthcare, Inc.. The
\ngovernment alleged that the nursing homes failed to prevent RehabCare from routinely providing
\nunreasonably high levels of therapy during so-called assessment reference periods, and then
\nproviding less therapy to those same patients outside the assessment reference periods. As a
\n27<\/p>\n
result of this practice by RehabCare, the nursing homes frequently billed Medicare for its
\npatients care at the highest therapy-based levels, even though the patients often were not
\nreceiving therapy at those levels. The settlements further resolved allegations that the nursing
\nhomes failed to prevent RehabCare from presumptively placing patients in the highest
\nreimbursement level and planning amounts of therapy based on thresholds for billing at higher
\nreimbursement levels rather than based on patients clinical needs.
\nIn June, 2015, Hebrew Homes Health Network Inc., a skilled nursing service provider in MiamiDade
\nCounty, Florida, and its former president and executive director, agreed to pay $17 million
\nto resolve civil FCA allegations of improperly paying doctors for referrals of Medicare patients
\nrequiring skilled nursing care. The settlement resolved allegations that Hebrew Homes hired
\nnumerous physicians ostensibly as medical directors, when in reality, most of the medical
\ndirectors were required to perform few, if any, of their contracted job duties. Instead, they were
\nallegedly paid for their patient referrals to the Hebrew Homes facilities, which increased
\nexponentially once the medical directors were put on the payroll.
\nPatient Harm
\nIn October 2014, a Westchester County, New York cardiologist was sentenced to 3 years in
\nprison and ordered to pay $2 million in restitution and forfeiture after pleading guilty to a charge
\nof health care fraud. According to the investigation, the cardiologist lured new patients and
\nmaintained existing patients by offering them narcotic prescriptions in exchange for those
\npatients undergoing unnecessary diagnostic tests and other medical procedures. He then billed
\nMedicare, Medicaid, and private insurance carriers millions of dollars for these fraudulent
\nclaims. Investigators believe that he also performed cardiac procedures that served no legitimate
\nmedical purpose, billed for office visits that did not occur, and falsified patients’ symptoms to
\njustify costly and unnecessary diagnostic tests.
\n(SF) In July 2015, a Detroit area hematologist-oncologist was sentenced to 45 years
\nimprisonment and ordered to forfeit $17.6 million for the health care fraud, money laundering
\nand kickback scheme he devised and executed. The government showed at a contested
\nsentencing that the defendant administered medically unnecessary infusions and injections to 553
\nindividual patients, including medically unnecessary chemotherapy, cancer treatments,
\nintravenous iron, and other infusion and injection therapies. Patients receiving these treatments
\nsuffered many serious side effects as a result. The defendant also referred patients for
\nunnecessary cancer tests at his diagnostic facility, United Diagnostics, PLLC, in Rochester Hills,
\nMichigan. The defendant billed Medicare, Blue Cross Blue Shield of Michigan, Health Alliance
\nPlan, and other insurers approximately $34 million in fraudulent claims through his cancer
\ntreatment clinic, Michigan Hematology Oncology P.C., which had multiple locations in
\nMichigan, and through United Diagnostics. The defendant also admitted to soliciting and
\nreceiving kickbacks from Guardian Angel Hospice and Guardian Angel Home Health Care in
\nexchange for referring his patients to those companies. Finally, he admitted that he laundered
\nthe proceeds of his infusion therapy fraud to promote his diagnostic testing fraud.
\n28<\/p>\n
Pharmacies
\nIn December 2014, Rite Aid Corporation, a national retail drugstore chain, agreed to pay nearly
\n$3 million to settle civil FCA allegations that it offered and provided improper inducements to
\nbeneficiaries of government programs to transfer their prescriptions to Rite Aid pharmacies in
\nviolation of the AKS. These inducements took the form of gift cards, gift checks, and similar
\npromotions.
\nIn May 2015, PharMerica Corporation, a national long-term care pharmacy provider, entered
\ninto two settlements for a total of $31.5 million to resolve claims that it violated the FCA and the
\nControlled Substances Act. The government alleged that PharMerica dispensed and billed
\nMedicare for schedule II controlled substances without a valid prescription. The prescriptions
\nwere allegedly invalid because they did not have a prescriber’s signature or, in the case of
\nemergency dispenses, were not based on an oral prescription from the prescriber followed by a
\nwritten prescription with the prescriber’s signature within seven days.
\nIn July 2015, Blanding Health Mart Pharmacy, a Jacksonville, Florida-based compounding
\npharmacy, agreed to pay $8.4 million to resolve civil FCA allegations that it sought
\nreimbursement for compounding pharmaceutical prescriptions that were not medically necessary
\nand were written by physicians that had never actually seen the patients.
\nIn August 2015, the Chief Executive Officer of a Kentwood, Michigan pharmacy was sentenced
\nto ten years in prison, agreed to a 50-year exclusion from federal health care programs, and is
\nlikely to pay over $8 million in restitution in connection with a conspiracy to commit health care
\nfraud by billing Medicare Part D plans, Medicaid, and private insurers for over $79 million in
\ndrugs that were adulterated and misbranded in violation of the Federal Food, Drug, and Cosmetic
\nAct. The CEOs conviction was the eighteenth criminal conviction in a case that included the
\nfelony convictions of six licensed pharmacists. This pharmacy serviced over 800 nursing and
\nadult foster care homes between 2006 and 2010. As part of its operations they retrieved unused
\nprescription drugs (including controlled substances) from those homes and returned those drugs
\nto pharmacy stock in a manner that resulted in the cross-contamination of drugs, the improper
\nlabeling of drugs, the placement of different drug dosages into stock bottles, and the placement
\nof different drugs in the same stock bottle. The pharmacy then re-dispensed and billed health
\ncare insurers for those adulterated and misbranded drugs.
\nPhysician Practice
\nIn October 2014, two groups of diagnostic centers agreed to pay a total of $2.6 million to settle
\ncivil FCA allegations. The first group, doing business as One Step Diagnostic, agreed to pay
\n$1.2 million to settle allegations that it violated the Stark Law and the FCA by entering into
\nsham consulting and medical director agreements with physicians who referred patients to its
\ndiagnostic centers. The second group, comprised of Complete Imaging Solutions LLC doing
\nbusiness as Houston Diagnostics, Deerbrook Diagnostics & Imaging Center LLC, Elite
\nDiagnostic Inc., Galleria MRI & Diagnostic LLC, Spring Imaging Center Inc. and West Houston
\nMRI & Diagnostics LLC, agreed to pay $1.4 million to resolve allegations that they engaged in
\nimproper financial relationships with referring physicians and improperly billed Medicare using
\n29<\/p>\n
the provider number of a physician who had not authorized them to do so and had not been
\ninvolved in the provision of the services being billed.
\n(SF) In December 2014, a physician and a registered nurse were sentenced to 120 months and 48
\nmonths in prison, respectively, for their roles in a $3 million Medicare fraud scheme following
\ntheir convictions at trial in May 2014. According to the evidence at trial, the physician defendant
\nfalsely certified that beneficiaries needed home health care and, in exchange for kickbacks,
\nreferred beneficiaries to PTM Healthcare Services Inc., a defunct home health care agency in
\nIrving, Texas, at which his co-defendant served as the director of nursing. The nurse defendant
\nand co-conspirators then prepared falsified medical records to make it appear that beneficiaries
\nneeded home health care services and billed Medicare for services that were medically
\nunnecessary or not provided. The owner of PTM Healthcare Services previously pled guilty in
\n2013 to health care fraud conspiracy.
\n(SF) In February 2015, a jury in Detroit convicted an unlicensed physician for his participation in
\na nearly $4.7 million Medicare fraud scheme. The evidence at trial revealed that the defendant
\nused pre-signed prescription pads from a licensed physician to prescribe drugs to Medicare
\npatients and also referred patients for medically unnecessary home health care services in
\nexchange for kickbacks. In January 2015, shortly before trial, the owner of Cherish Home
\nHealth Services, Inc., one of the companies to which the unlicensed physician referred patients,
\npled guilty and admitted to paying kickbacks to the unlicensed physician and billing Medicare
\nfor home health care services that were not provided. Two other defendantsa patient recruiter
\nand a physicianpreviously pled guilty for their roles in the fraud.
\n(SF) In February 2015, an Illinois physician pled guilty to accepting illegal kickbacks and
\nbenefits totaling nearly $600,000 from two pharmaceutical companiesTeva Pharmaceuticals
\nUSA Inc. and IVAX LLCin exchange for regularly prescribing the anti-psychotic drug
\nClozapine to his patients. As set forth in the plea agreement, the physician agreed to switch his
\npatients to generic Clozapine if the manufacturer agreed to pay him $50,000 under a one-year
\nconsulting agreement and to provide other benefits to the physician. The physician also agreed
\nto pay over $3.8 million to settle a parallel civil FCA lawsuit alleging that, by prescribing
\nClozapine in exchange for kickbacks, he caused the submission of false claims to Medicare and
\nMedicaid for the Clozapine he prescribed for thousands of elderly and indigent patients in at
\nleast 30 Chicago-area nursing homes and other facilities. Previously, in March 2014, Teva and
\nIVAX paid a total of $27.6 million to resolve allegations related to paying kickbacks to the
\nphysician defendant.
\n(SF) In March 2015, a New York doctor pled guilty to health care fraud conspiracy for his
\ninvolvement in a scheme to fraudulently bill Medicare for $14.2 million in claims for medically
\nunnecessary treatments. As part of the plea, the defendant agreed to pay $5.4 million in
\nrestitution to the Medicare program, which represents the total amount of money Medicare paid
\nas the result of the fraudulent claims. In connection with his guilty plea, the defendant admitted
\nthat he and other medical providers at the clinic submitted approximately $14.2 million in false
\nand fraudulent claims to Medicare for medically unnecessary vitamin infusions, physical
\ntherapy, and occupational therapy that did not qualify for reimbursement by Medicare.
\n30<\/p>\n
(SF) In April 2015, a physician who served as the medical director of Hollywood Pavilion, LLC,
\na state-licensed psychiatric hospital located in Hollywood, Florida, was sentenced to 60 months
\nimprisonment for his role in a $67 million Medicare fraud scheme. Evidence at trial revealed
\nthat the defendant falsified medical records certifying that patients qualified for and received
\nintensive outpatient services. The evidence demonstrated that the defendant signed patient files
\nfor over 400 patients, certifying that he had provided mental health services to each of them,
\neven though he never saw or provided any treatment to the patients. Hollywood Pavilion used
\nthese falsified records to submit over 2,800 false claims to Medicare. Five other individuals
\npreviously were convicted and sentenced in this case, including Hollywood Pavilions former
\nchief executive officer, chief operating officer, and clinical director.
\nIn April 2015, Family Dermatology P.C., the owner and operator of dermatology practices and a
\ndermatopathology laboratory, agreed to pay $3.2 million to settle civil FCA allegations that its
\nfinancial relationships with certain employed physicians violated the Stark Law. Family
\nDermatology employs dermatologists as independent contractors and routinely required them to
\nuse Family Dermatologys in-house pathology lab, Nelson Dermatopathology, for their
\npathology services. The government alleged that Family Dermatology violated the Stark Law
\nand FCA by billing Medicare for dermatopathology analyses performed by Nelson
\nDermatopathology on specimens that were sent to the laboratory by these employed physicians.
\nIn April 2015, a medical doctor and sole physician at a pain clinic in Athens, Tennessee, was
\nsentenced to 28 months and was ordered to pay $7.5 million in restitution to Medicare for
\nmisbranding drugs with the intent to defraud. The doctor purchased 254 vials of Botox from a
\nforeign supplier, and had used 204 vials during the course of the scheme to defraud, but had
\nbilled Medicare for 16,119 vials. A forfeiture order was also entered against the $6.8 million
\nseized from the defendants bank accounts.
\nIn May 2015, Garden State Cardiovascular Specialists P.C., a New Jersey cardiology practice
\nthat owns and operates several facilities under the name NJ MedCare\/NJ Heart, agreed to pay
\n$3.6 million to settle civil FCA allegations that its facilities and their principals submitted claims
\nto Medicare for various cardiology diagnostic tests and procedures, including stress tests, cardiac
\ncatheterizations, and external counterpulsation, which were not medically necessary.
\n(SF) In May 2015, an administrator and a biller were convicted after trial for their roles in a
\n$4 million Medicare fraud scheme involving Medicall Physicians Group, a home visiting
\nphysician practice in Schaumburg, Illinois. The evidence at trial revealed that Medicall billed
\nMedicare for services that were never provided to patients, including physician oversight of
\npatient care plans, extended patient visits, and other services purportedly provided to individuals
\nwho had already died. A third defendant, the owner and medical director of Medicall, pled
\nguilty prior to trial. In September 2015, the lead administrator of a home visiting physician
\npractice was sentenced to 87 months in prison and the medical biller, who submitted many of the
\nfraudulent claims to Medicare, was sentenced to serve 45 months in prison and pay restitution of
\napproximately $1 million.
\n31
\n(SF) In August 2015, a dermatologist was sentenced to seven years imprisonment, following a
\njury trial that resulted in six mail and wire fraud convictions. The defendant also was ordered to
\npay over $3.7 million in restitution to Medicare, private insurers, and patients. According to the
\nevidence at trial, the defendant misdiagnosed patients benign skin conditions as pre-cancerous
\nlesions and falsely billed cosmetic treatments as the destruction of large numbers of such lesions.
\nIn August 2015, a Brooklyn doctor was sentenced to 24 months in prison for his role as the no
\nshow doctor in a $13 million health care fraud conspiracy scheme. Medical services were
\nprovided by a physicians Helpant who was acting without supervision by a medical doctor, but
\nthe doctor still billed Medicare and Medicaid for the services using his provider number. He also
\nfalsely certified that patient transportation by ambulette was medically necessary and billed for
\nthis unnecessary service. As part of the sentence, the court entered an order directing the doctor
\nto pay $6.4 million in restitution and to forfeit $6.6 million.
\nPrescription Drugs
\n(SF) In October 2014, the operator of a Dallas family practice and weight loss management
\nclinic based in Dallas, Texas, was sentenced to 7 years and 3 months of incarceration and
\nordered to forfeit his house, cars, boat, and funds from several bank accounts after pleading
\nguilty to conspiracy to unlawfully distribute controlled substances. The investigation revealed
\nthat clinic operated as a pill mill, where dealers recruited and drove patients in groups to the
\nclinic to obtain prescriptions for hydrocodone and Xanax. The clinics office manager and three
\ndealers were also sentenced during this reporting period to more than 18 years in prison,
\ncombined.
\nIn October 2014, two individuals were sentenced to a combined 17 years and 1 month in jail and
\nordered to pay $6.2 million in joint and several restitution after pleading guilty to conspiracy to
\ncommit health care fraud. The two individuals operated a Miami-based retail pharmacy. The
\ninvestigation revealed that their co-conspirators recruited and paid Medicare beneficiaries to
\nobtain prescriptions, including for expensive antipsychotic and skin treatment pharmaceutical
\ndrugs that the co-conspirators subsequently furnished back to the two men. The two then used
\nthe fraudulent prescriptions to bill the Medicare Part D program.
\nIn November 2014, a Baltimore, Maryland individual was sentenced to 8 years and 4 months of
\nincarceration after pleading guilty to conspiracy to distribute and possession with intent to
\ndistribute oxycodone. The investigation revealed that the individual obtained fraudulent
\nprescriptions for oxycodone from a secretary who was stealing prescriptions from the doctors
\noffice where she worked. The prescriptions were filled out in the names of Medicare
\nbeneficiaries and other defendants. He then either filled the prescriptions himself and billed
\nMedicare, or he had them filled by other individuals and sold the oxycodone pills for around $10
\nper pill on the streets. Eight other defendants previously pleaded guilty to charges in connection
\nwith this scheme and were sentenced to a combined 29 years and 6 months in jail.
\nIn May 2015, the owner\/operator of Astramed, a chain of purported medical clinics with multiple
\nlocations in the Bronx, New York, was convicted of conspiracy to distribute and possess with
\nintent to distribute oxycodone and is awaiting his sentencing. The charge carries a maximum
\n32
\nsentence of 20 years in prison. Astramed doctors were paid cash in exchange for writing tens of
\nthousands of medically unnecessary prescriptions for large quantities of oxycodone; these
\nprescriptions were then filled at pharmacies by co-conspirators who, in turn, resold and
\ndistributed the drugs at vastly inflated rates. In total, Astramed issued approximately 31,500
\nmedically unnecessary prescriptions for oxycodone, comprising nearly 5.5 million tablets with a
\nstreet value of up to $164 million. More than 20 defendantsincluding doctors, clinic
\nemployees, and drug traffickershave previously pleaded guilty to their participation in the
\nscheme.
\nIn July 2015, the operator of an imaging center in Glendale, California, was sentenced to 15
\nyears in prison and ordered to pay $9.1 million in joint and several restitution after being
\nconvicted on charges relating to health care fraud, identity theft, and misbranding pharmaceutical
\ndrugs. As part of the scheme, patient recruiters brought beneficiaries to the clinic in exchange
\nfor cash or other inducements. The patients received prescriptions for anti-psychotic
\nmedications and other drugs, even though they were not evaluated by a physician or there was no
\nmedical need for the medications. The patients were then driven to a pharmacy where, under the
\nsupervision of the driver, they filled their prescriptions and then gave the drugs to the driver.
\nThe drugs were eventually sold on the black market or redistributed to pharmacies, where they
\ncould be rebilled to Medicare and Medi-Cal as new bottles of drugs. In addition to recruiting
\nbeneficiaries, the operator and his co-conspirators also stole the identities of beneficiaries and
\nused their information to generate fraudulent prescriptions. Ten of his co-conspirators were
\npreviously sentenced to a combined 28 years and 3 months in prison.
\nPsychiatric and Psychological Testing and Services
\nIn April 2015, Health Management Associates, Inc. (HMA) in Naples, Florida, and 14 hospitals
\nformerly owned and operated by HMA agreed to pay $15 million to resolve allegations that they
\nbilled Medicare for intensive outpatient psychotherapy (IOP) services that did not meet the
\nconditions for payment, including services provided to patients whose condition did not qualify
\nfor IOP.
\n(SF) In June 2015, two owners were indicted for their roles in a $25 million psychological
\ntesting scheme carried out through eight companies operating in multiple states. According to
\ncourt documents, the defendants owned and operated Nursing Home Psychological Service and
\nPsychological Care Services, each with locations in Louisiana, Mississippi, Alabama, and
\nFlorida. The indictment alleges that the defendants contracted with nursing homes in these states
\nto allow their companies to administer psychological tests to the nursing homes residents. The
\ndefendants then caused the submission of claims for purported psychological testing,
\npsychotherapy, and related services to the nursing home residents that were medically
\nunnecessary or not provided.
\nQuality of Care
\nIn May 2015, Country Villa Service Corp, d\/b\/a Country Villa Health Services, and the ARBA
\nGroup, Inc., CF Watsonville East, LLC and CF Watsonville West, LLC of California entered
\ninto separate settlement agreements worth a combined $3.8 million to resolve allegations of false
\nclaims for materially substandard or worthless services. The government alleged that employees
\n33
\nat Country Villa Watsonville East Nursing Center and Country Villa Watsonville West Nursing
\nCenter persistently overmedicated elderly and vulnerable residents of their facilities, causing
\ninfection, sepsis, malnutrition, dehydration, falls, fractures, pressure ulcers, and for some
\nbeneficiaries, premature death. In addition to the settlements, the CF Watsonville companies
\nentered into a 5-year CIA with HHS-OIG, under which they will retain a quality monitor chosen
\nby HHS-OIG to perform quarterly reviews of the facilities quality and compliance systems.
\nOther Medicare and Medicaid Matters
\n(SF) In October 2014, the owner\/manager of two health centers in Baton Rouge, Louisiana was
\nsentenced to 7 years and 6 months in prison and ordered to pay $43.5 million in joint and several
\nrestitution after being convicted by a jury on charges of conspiracy to commit health care fraud
\nand health care fraud. A second defendant was sentenced to 5 years in prison and ordered to pay
\n$3.2 million in joint and several restitution after being convicted by a jury of conspiracy to
\ncommit health care fraud and conspiracy to pay and receive health care kickbacks. The
\ninvestigation revealed that owner\/manager and co-conspirators recruited Medicare beneficiaries
\nto attend medically unnecessary or sham programs at the health centers. The second defendant
\nand others were paid cash kickbacks to recruit Medicare beneficiaries to receive partial
\nhospitalization program services at the centers. The health centers billed Medicare more than
\n$258 million for these fraudulent services. In addition to these two defendants, 15 defendants
\nhave been convicted in connection with this scheme.
\nIn January 2015, the Commonwealth of Pennsylvania agreed to pay $48.8 million to settle civil
\nFCA allegations that it provided benefits to ineligible aliens in violation of federal law. Under
\nthe Personal Responsibility Work Opportunity Act, only documented aliens who meet certain
\nlow-income requirements and who have been in the country for more than five years may receive
\nnon-emergency aid under Medicaid, Temporary Helpance for Needy Families (TANF) and the
\nSupplemental Nutrition Helpance Program (SNAP), formerly known as food stamps. The
\nUnited States alleged that, between 2004 and 2010, Pennsylvania provided Medicaid, TANF and
\nSNAP benefits to ineligible aliens in violation of these restrictions.
\nIn March 2015, heart monitoring company BioTelemetry, Inc., agreed to pay $6.4 million to
\nsettle civil FCA allegations that its subsidiary, CardioNet, billed Medicare for Mobile Cardiac
\nOutpatient Telemetry (MCOT) services that were not reasonable or medically necessary. An
\nMCOT monitor is a real-time, outpatient cardiac monitoring service. The settlement resolves
\nallegations that although CardioNet was aware that MCOT services were not eligible for
\nMedicare reimbursement when provided to patients who had experienced only mild or moderate
\nheart palpitations, CardioNet knowingly submitted claims to Medicare for more expensive
\nMCOT services by using an inaccurate diagnostic code that ensured that the claims would be
\nreimbursed by Medicare at a higher rate.
\nIn August 2015, two workers at a wholesale drug distribution operation were sentenced for
\ndistributing counterfeit and adulterated Botox to a medical clinic in Missouri. One worker
\nreceived 24 months imprisonment and another received three months imprisonment, and both
\nwere ordered to forfeit $1 million. Eight other individuals were previously convicted in the
\nEastern District of Missouris investigation, including two local doctors and a clinic owner, a
\n34<\/p>\n
citizen of the United Kingdom, and two Turkish nationals, with sentences ranging from 30
\nmonths to probation, and over $5 million recovered in forfeitures and fines. The USAO also
\nreached civil settlements with three local doctors who were purchasing unapproved drugs and
\nbilling them to Medicare and Medicaid, resulting in civil program recoveries in excess of
\n$1.6 million.
\n35<\/p>\n
DEPARTMENT OF HEALTH AND HUMAN SERVICES
\nOffice of Inspector General
\nA certain portion of the funds appropriated under HIPAA are, by law, set aside for Medicare and
\nMedicaid activities of HHS-OIG. In FY 2015, the Secretary and the Attorney General jointly
\nallotted $186.1 million to HHS-OIG after accounting for a sequester reduction of $14.7
\nmillion. Additionally, Congress appropriated $67 million in discretionary funding for HHS-OIG
\nHCFAC activities.
\nIn FY 2015, HHS-OIG investigations resulted in 800 criminal actions against individuals or
\nentities that engaged in crimes related to Medicare and Medicaid; and 667 civil actions, which
\ninclude false claims and unjust-enrichment lawsuits filed in Federal district court, civil monetary
\npenalties (CMP) settlements, and administrative recoveries related to provider self-disclosure
\nmatters. In addition, during FY 2015, HHS-OIG excluded a total of 4,112 individuals and
\nentities, the details of which are below.
\nIn FY 2015, HHS-OIG continued to staff and support Medicare Strike Force operations worked
\nin conjunction with DOJ Criminal Divisions Fraud Section, local USAOs, the FBI, and State
\nand local law enforcement agencies. HHS-OIG has assigned agents to Strike Forces in Miami,
\nNew York City, Houston, Tampa, Detroit, Los Angeles, Southern Louisiana, Dallas, and
\nChicago. HHS-OIG has supported Strike Force operations by providing investigative, analytic,
\nand forensic resources. These Strike Forces have effectively investigated and prosecuted
\nindividuals and entities that do not provide legitimate health care services, but exist solely for the
\npurpose of defrauding Medicare and other government health care programs. The continued
\nsupport of Medicare Strike Force operations is a top priority for HHS-OIG.
\nProgram Savings
\nInvestigations, audits, and Assessments frequently reveal vulnerabilities or incentives for
\nquestionable or fraudulent practices in agency programs or administrative processes. As
\nrequired by the Inspector General Act, HHS-OIG makes recommendations to agency managers
\nto address these vulnerabilities. In turn, agency managers recommend legislative proposals or
\nother corrective actions that, when enacted or implemented, close loopholes and reduce improper
\npayments or conduct. The savings from these joint efforts toward program improvements can be
\nsubstantial. For FY 2015, potential savings from legislative and administrative actions that were
\nsupported by HHS-OIG recommendations were estimated by third parties, such as the
\nCongressional Budget Office or actuaries within HHS, to be $20.5 billion$18.4 billion in
\nMedicare savings and $2.1 billion in savings to the Federal share of Medicaid.
\nSettlement with New York State based on HHS-OIG Audit Recommendations: Included in these
\nsavings figures is the $1.95 billion the State of New York agreed to pay to CMS pursuant to a
\nsettlement agreement based on HHS-OIG audit work. HHS-OIG had found that New Yorks
\nMedicaid daily rate for 15 selected State-operated intermediate care facilities (ICFs or
\ndevelopment centers) for individuals with intellectual and developmental disabilities did not
\nmeet Federal requirements. The daily rate for Medicaid beneficiaries to reside in the selected
\n36
\ndevelopmental centers grew by a factor of 21 between State fiscal year (SFY) 1985 and SFY
\n2009 because the States rate-setting methodology significantly inflated the Medicaid daily rate
\nfor the developmental centers. On March 20, 2015, New York and CMS entered into a
\nsettlement agreement in which New York agreed to pay a total of $1.95 billion to the Federal
\nGovernment to resolve the resulting overpayment determination. In addition, CMS approved a
\nplan amendment to New Yorks Medicaid program that changed the rate to better reflect the
\nactual costs of providing care, saving approximately $1.2 billion.
\nAdditional information about savings achieved through such policy and procedural changes may
\nbe found in the HHS-OIG fall Semiannual Report to Congress, on-line at http:\/\/oig.hhs.gov.
\nExclusions
\nOne important mechanism for safeguarding the care provided to program beneficiaries is through
\nexclusion of providers and suppliers who have engaged in the abuse or neglect of patients or
\nfraud from participation in Medicare, Medicaid, and other federal health care programs.
\nDuring FY 2015, HHS-OIG excluded a total of 4,112 individuals and entities. Among these
\nwere exclusions based on criminal convictions for crimes related to Medicare and Medicaid
\n(1,329) or to other health care programs (424); for patient abuse or neglect (302); or as a result of
\nlicensure revocations (1743). This list of conduct is not meant to be exhaustive, but identifies the
\nmost prevalent causes underlying HHS-OIGs exclusions of individuals or entities in FY 2015.
\nIn addition to those mentioned in the Program Accomplishments section above, exclusion
\nactions by HHS-OIG included:
\nMichiganIn July 2015 a pharmacist was excluded for a minimum period of 18 years based
\non his conviction for, among other charges, conspiracy to distribute and possess with intent
\nto distribute controlled substances. The pharmacist owned and operated a pharmacy in
\nDetroit, Michigan. He conspired with other individuals to bring him fraudulent prescriptions,
\nto which he dispensed controlled substances with no legitimate medical purpose. The
\npharmacist then received cash payments for illegally dispensing the controlled substances.
\nHe was sentenced in February 2015 to 6 years of incarceration.
\nIndianaIn June 2015 an employee of a group home was excluded for a minimum period of
\n20 years based on his conviction for criminal deviate conduct. While working in a group
\nhome, he instructed a mentally retarded patient to perform sex acts on him in the living room
\nof the group home. As a result of his conviction, he was sentenced in October 2014 to 10
\nyears of incarceration.
\nFloridaIn May 2015 an employee of a chiropractic clinic was excluded for a minimum
\nperiod of 15 years based on his conviction for conspiracy to commit mail fraud. The
\nemployee helped recruit individuals to participate in staged automobile accidents, instruct
\nthose recruited on how to participate in the accident and how to collect police reports, told
\nthem what clinics they should go to for treatment, and prepared fraudulent documentation to
\nsupport medically unnecessary treatment. As a result of his conviction, Sacerio was
\nsentenced in July 2015 to 4 years in prison and ordered to pay approximately $1.1 million in
\nrestitution.
\n37
\nNew YorkIn January 2015 a physician was excluded for a minimum period of 50 years on
\nthe basis of his conviction health care fraud, conspiracy to defraud the United States Railroad
\nRetirement Board (RRB), and other related charges. From approximately 1998 through
\n2008, the physician Helped employees from the Long Island Railroad (LIRR) in applying for
\ndisability benefits from the RRB, even though he knew they were not disabled. The LIRR
\nemployees generally paid the physician $800 to $1200, often in cash, to prepare medical
\nassessments and\/or illness narratives for submission to the RRB. He prescribed and billed
\npatients insurers for unnecessary medical tests and he ordered physical therapy and medical
\ntreatments in an effort to pad their medical files. The physician fabricated and fraudulent
\nassessments enabled 242 LIRR employees to supplement their pensions with a collective $70
\nmillion in RRB disability benefit payments to which they were not entitled. He was
\nsentenced to 8 years in prison and ordered to pay $70.6 million in restitution. The New York
\nState Board for Professional Medical Conduct revoked his medical license, and the New
\nYork State Office of the Medicaid Inspector General excluded him from participation in the
\nMedicaid program.
\nTexasIn December 2014 a pharmacist was excluded for a minimum period of 10 years on
\nthe basis of her conviction for conspiracy to unlawfully distribute controlled substances. The
\npharmacist owned and operated Urban Independent Pharmacy (UIP). The investigation
\nrevealed that she participated in a scheme whereby dealers recruited patients to obtain
\nunlawful prescriptions for controlled substances and drove the patients to UIP, where she
\nfilled their prescriptions. After the pharmacist filled the prescriptions, the patients provided
\nthe pills to the dealers, who then sold them on the street for a profit. She was sentenced to 5
\nyears in prison.
\nIowaIn November 2014 a pediatrician was excluded for a minimum of 30 years on the
\nbasis of his conviction of possession of child pornography. The investigation revealed that
\nthe pediatrician used a hidden camera to take pictures and videos of his minor patients
\nwithout the advice or knowledge of the patients, their parents, or guardians. The images and
\nvideos were taken during what were purported to be necessary medical exams. Investigators
\nsearched his computers and found files that included child pornography along with videos
\nand images of the minor patients. Jones was sentenced to 10 years and 1 month in prison.
\nThe Iowa Board of Medicine also accepted the surrender of his license to practice as a
\nmedical doctor.
\nCivil Monetary Penalties
\nHHS-OIG has the authority to impose civil monetary penalties (CMPs) against providers and
\nsuppliers who knowingly submit false claims to the Federal Government, who participate in
\nunlawful patient referral or kickback schemes, who fail to appropriately treat or refer patients at
\nhospital emergency rooms, or who engage in other activities prescribed in statute. HHS-OIG
\ncontinues to pursue its affirmative enforcement actions under these authorities. Examples
\ninclude:
\nNew JerseyIn March 2015 Sandoz, Inc. agreed to pay $12,640,000 to settle allegations that
\nit misrepresented drug pricing data to the Medicare program. Sandoz, a division of Novartis
\n38
\nPharmaceuticals and one of the worlds largest generic manufacturers, markets hundreds of
\ngeneric medications in the United States. Under federal law, drug makers must report both
\naccurate and timely Average Sales Price (ASP) information to CMS, which CMS uses to set
\npayment amounts for most drugs covered under Medicare Part B. OIG alleged that Sandoz
\nfailed to submit accurate ASP data to CMS for each quarter from January 2010 through
\nMarch 2012. OIG previously pursued CMPs against Sandoz for late reporting of drug
\npricing information to CMS. That case was settled in December 2011 with Sandoz agreeing
\nto a $230,000 settlement. The 2015 Sandoz settlement is the largest ever under OIGs drug
\nprice reporting CMP authority.
\nTexasIn October 2014 three Houston-area physicians collectively agreed to pay $200,266
\nfor allegedly violating the Civil Monetary Penalties Law (CMPL) provisions applicable to
\nkickbacks. OIG alleged that a family practitioner and two orthopedic surgeons received
\nillegal remuneration from another physician and his practice. This improper remuneration
\ntook the form of the physician paying the salary of one of the family practitioners employees
\nto serve as a referral coordinator and hiring the two surgeons as medical directors. OIG
\nalleged that these arrangements took into account the volume or value of referrals made to
\nthe physicians practice. To date, 11 physicians have agreed to pay a collective total of
\n$1,415,137 to resolve their CMPL liability for allegedly receiving kickbacks from the
\nphysicians practice. Yet another physician agreed to be excluded from participation in
\nfederal health care programs for 3 years.
\nNew YorkIn December 2014 a physician and his medical clinic entered into a $694,887
\nsettlement agreement with OIG. The settlement resolved allegations that, from May 2008 to
\nDecember 2013, the physician and the clinic knowingly submitted, or caused to be submitted,
\nfraudulent claims to Medicare for physical therapy services. Specifically, OIG alleged that
\nthese claims were fraudulent for one or more of the following reasons: (1) physical therapy
\nservices were not provided or supervised by the rendering provider, (2) group services were
\nbilled as one-on-one provider-patient physical therapy services, (3) services were performed
\nby unqualified individuals, and (4) claims for time-based physical therapy services did not
\naccurately reflect the actual time spent performing the services.
\nCaliforniaIn February 2015, Hyundai Drugs and its owner agreed to pay $1,342,295 to
\nresolve allegations under the CMPL. From January 1, 2009 through April 12, 2014, Hyundai
\nallegedly submitted claims to Medicare Part D for prescription drugs that it knew or should
\nhave known were not provided as claimed and were false or fraudulent. The case was
\ninvestigated as part of Operation Pharm Fury, a joint effort between OIGs Office of
\nInvestigations, Office of Assessment and Inspections, and Office of Counsel to the Inspector
\nGeneral. Operation Pharm Fury has exposed pharmacies across the country that have shown
\na pattern of questionably high billing practices when submitting claims to Medicare for
\nprescription drugs.
\nKansasIn March 2015 Newton Healthcare Corporation d\/b\/a Newton Medical Center
\n(NMC) agreed to pay $45,000 to resolve its liability under EMTALA. OIG alleged that
\nNMC failed to provide an adequate medical screening examination for a patient who arrived
\nat its emergency department 38 weeks pregnant and complaining of abdominal and lower
\nback pain. OIG contended that NMC did not record the patients medical history, take any
\n39
\nvitals, conduct fetal monitoring, test for fetal movement, or perform any exam on the patient.
\nInstead, OIG alleged that NMC instructed the patient to leave and see her personal physician.
\nThe patient left NMC by private vehicle and arrived at the emergency department of another
\nhospital, where she was admitted and delivered a stillborn baby.
\nAudits and Assessments
\nThe focus of HHS-OIGs audits and Assessments is determined through a dynamic process and
\nadjustments are made to HHS-OIGs work plan throughout the year to meet priorities and to
\nanticipate and respond to emerging issues with the resources available. HHS-OIG assesses
\nrelative risks in Medicare and Medicaid (as well as the many other programs for which HHSOIG
\nhas oversight authority) to identify the areas most in need of attention and, accordingly, to
\nset priorities for the sequence and proportion of resources to be allocated. In assessing this
\nrelative risk, HHS-OIG considers a number of factors, including:
\nMandatory requirements for OIG reviews, as set forth in laws, regulations, or other
\ndirectives;
\nRequests made or concerns raised by Congress, HHS management, or the Office of
\nManagement and Budget (OMB);
\nTop management and performance challenges facing HHS;
\nWork to be performed in collaboration with partner organizations;
\nManagements actions to implement our recommendations from previous reviews; and
\nTimeliness.
\nAs a consequence of this work planning process, HHS-OIG identified questionable or improper
\nconduct in Medicare and Medicaid, and recommended corrective actions that, when
\nimplemented, will return misspent funds and prevent future wasteful or improper payments.
\nAmong HHS-OIGs audit and Assessment findings in FY 2015 were the following:
\nMedicaid Orthodontic Services
\nTexas did not ensure that requests for prior authorization of Medicaid orthodontic services were
\napproved in accordance with State Medicaid guidelines. HHS-OIG estimated that Texas paid at
\nleast $133.4 million for unallowable orthodontic services. Of 106 sampled orthodontic priorauthorization
\nrequests, 89 were improperly approved: 78 did not qualify for orthodontic
\nservices, and 11 did not have sufficient documentation to determine whether they qualified.
\nMedicaid Pediatric Dental Services
\nHHS-OIG identified 329 general dentists and 6 orthodontists in California with questionable
\nbilling. Medicaid paid these providers $117.5 million for pediatric dental services in 2012.
\nThese 335 dental providersrepresenting 8 percent of the California general dentists and
\northodontists whom we reviewedprovided either a large number of services or provided
\ncertain services to an extremely large number of children, among other practices. Half of the
\ndental providers with questionable billing worked for dental chains.
\nMedicaid Drug Rebates
\nMissouri did not always comply with Federal Medicaid requirements for billing drug
\n40
\nmanufacturers for rebates for physician-administered drugs. Missouri did not collect the national
\ndrug codes (NDCs) that were required for it to invoice manufacturers for rebates associated with
\nabout $34.8 million in physician-administered drugs. In addition, Missouri did not capture the
\nutilization and coding data necessary to collect rebates for all physician-administered drugs.
\nWithout the NDCs, HHS-OIG was unable to determine whether Missouri improperly claimed
\nfederal reimbursement for an additional $13.2 million for other physician-administered drug
\nclaims.
\nMedicaid Home Health Services
\nCMS could not rely on New Yorks or New Jerseys qualification requirements to ensure quality
\nof care was provided to Medicaid beneficiaries receiving home health services. Some New York
\nand New Jersey home health agencies (HHAs) did not meet certain Federal and State
\nrequirements for employee health screenings and training, among other issues. HHS-OIG
\nestimated that $31.9 million in Federal Medicaid reimbursement was associated with HHA
\nworkers who did not meet Federal and State requirements ($27.9 million in New York and $4
\nmillion in New Jersey).
\nTerminated Medicaid Providers
\nThe Affordable Care Act (ACA) requires States to terminate providers who were already
\nterminated for cause in another State, yet States face challenges complying with this mandate.
\nHHS-OIG found continued participation from providers terminated in one State in other States
\nMedicaid program, and about one-third received payments for services provided to Medicaid
\nbeneficiaries after the providers terminations for cause. Continued participation of providers
\nafter their terminations for cause presents a vulnerability to Medicaid and raises concern that
\nthese providers could continue to treat Medicaid beneficiaries.
\nDevelopmental Disabilities Waiver Program
\nNew York improperly claimed an estimated $76.8 million in Federal Medicaid reimbursement
\nfor some Office for People With Developmental Disabilities (OPWDD) waiver program services
\nduring CYs 2006 through 2008. The OPWDD waiver program is intended to enable adults and
\nchildren with developmental disabilities to live in the community as an alternative to
\nintermediate care facilities for individuals with intellectual disabilities.
\nAccess to Medicaid Managed Care Services
\nSlightly more than half of providers reviewed could not offer appointments to enrollees.
\nNotably, 35 percent could not be found at the location listed by the plan, and another 8 percent
\nwere at the location but were not participating in the plan. Among the providers who offered
\nappointments, the median wait time was two weeks. However, over a quarter had wait times of
\nmore than one month. Finally, primary care providers were less likely to offer an appointment
\nthan specialists; however, specialists tended to have longer wait times.
\nNon-Emergency Medical Transportation Services
\nDuring FY 2011, Texas claimed at least $30.4 million for unallowable Medicaid payments for
\nnonemergency medical transportation (NEMT) services. Federal regulations require each State
\nto ensure that Medicaid beneficiaries have necessary transportation to and from medical
\nproviders. Prior OIG reviews have found that States claims for NEMT services were not always
\nin accordance with Federal and State requirements.
\n41
\nTargeted Case Management Services
\nMissouri claimed $11.5 million of unallowable Medicaid payments for Targeted Case
\nManagement (TCM) services provided to individuals with developmental disabilities during
\nState FYs 2011 through 2013. Missouri did not address OIGs recommendations to, among
\nother things, refund $11.5 million to the Federal Government.
\nAnti-Psychotic Drugs Prescribed to Children
\nIn the five States reviewed, medical reviewers identified quality-of-care concerns in the medical
\nrecords associated with 67 percent of claims for second-generation antipsychotic (SGA) drugs
\nprescribed to children. Quality-of-care concerns identified through medical record reviews
\ncorresponded to the following issues: dosage, duration, indications for use, monitoring,
\npolypharmacy (too many drugs), patient age, and side effects. The high percentage of claims for
\nwhich our reviewers identified quality-of-care concerns indicates that more needs to be done to
\nensure the quality of care provided to children receiving SGAs paid for by Medicaid.
\nPayments to Delinquent Providers
\nCMS made $10.7 million in Medicare and Medicaid payments associated with 23 of 82
\nindividual physicians with delinquent debts after CMS had referred their Medicare debts to the
\nU.S. Department of the Treasury (Treasury) for collection. In addition, 13 of the 23 individual
\nphysicians had ownership interest in and\/or managing control of 15 Medicare Part B entities that
\nreceived Medicare reimbursement from CMS after CMS referred the individual physicians
\ndebts to Treasury. CMS is required to seek recovery of all identified overpayments and can
\nrecoup or offset overpayments against a providers future Medicare and\/or Federal share of
\nMedicaid payments.
\nMedicare Outpatient Drugs
\nMedicare contractors in 13 jurisdictions overpaid providers $35.8 million for selected outpatient
\ndrugs from July 1, 2009, through June 30, 2012. For 88 percent of the overpayments, providers
\nbilled either incorrect units of service or, otherwise, a combination of incorrect units of service
\nand incorrect Healthcare Common Procedure Coding System codes. The Medicare claims
\nprocessing systems did not have sufficient prepayment edits in place to prevent all
\noverpayments.
\nFinancial Incentives to Provide Hospice Care
\nMedicare payments for hospice care provided in Helped living facilities (ALFs) more than
\ndoubled in 5 years, totaling $2.1 billion in 2012. Hospices provided care much longer and
\nreceived much higher Medicare payments for beneficiaries in ALFs than for beneficiaries in
\nother settings. Beneficiaries in ALFs often had diagnoses that usually require less complex care.
\nThis report raises concerns about hospices targeting beneficiaries in ALFs because they may
\noffer the hospices the greatest financial gain.
\nPotential Fraud in Medicare Part D
\nSpending for Part D drugs, especially commonly abused opioids, has grown substantially. HHSOIG
\nidentified questionable billing by 1,400 pharmacies that may indicate fraudulent activity.
\nEach of these pharmacies billed for extremely high amounts for one or more of our billing
\n42
\nmeasures. HHS-OIG also identified geographic hotspots for certain drugs that point to possible
\nfraud and abuse.
\nMedicare Part D Program Integrity
\nThis portfolio presents an overview of HHS-OIG investigations, audits, Assessments, and legal
\nguidance related to Part D. It synthesizes numerous HHS-OIG reports that have identified
\nweaknesses in Part D program integrity, and provides updates on Departmental efforts to address
\nthese weaknesses. In particular, HHS-OIG has identified weaknesses in the use of data to
\nidentify vulnerabilities, as well as in the oversight by all parties responsible for protecting Part D:
\nCMS, Part D plan sponsors, and the Medicare Drug Integrity Contractor. OIG has made
\nrecommendations to strengthen Part D program integrity, and progress has been made.
\nHowever, Part D remains vulnerable to fraud, as evidenced by ongoing investigations.
\nSwing-Bed Services at Critical Access Hospitals
\nMedicare spending for swing-bed services in critical access hospitals (CAHs) steadily increased
\nto, on average, almost four times the costs of similar services at alternative facilities from
\ncalendar years 2005 through 2010. Medicare reimburses CAHs at 101 percent of their
\nreasonable costs for providing services to beneficiaries rather than at rates set by Medicares
\nprospective payment system or Medicares fee schedules. Medicare could have saved $4.1
\nbillion over a 6-year period at CAHs if swing-bed services were reimbursed using the skilled
\nnursing facility prospective payment system rate.
\nSkilled Nursing Facilities
\nThe findings of this and prior HHS-OIG reports demonstrate the need for CMS to reevaluate the
\nskilled nursing facility (SNF) payment system. Medicare payments for therapy greatly exceeded
\nSNFs costs for therapy. Combined with the current method of paying for therapy, this large
\ndifference between therapy payments and costs creates a strong financial incentive for SNFs to
\nbill for higher levels of therapy than necessary. Increases in SNF billingparticularly for the
\nhighest level of therapyresulted in $1.1 billion in Medicare payments in FYs 2012 and 2013.
\nHospital Outlier Payments
\nMedicare contractors did not always refer Medicare cost reports whose outlier payments
\nqualified for reconciliation to CMS. In addition, the 13 contractors did not always reconcile the
\noutlier payments associated with cost reports whose outlier payments qualified for reconciliation.
\nThe financial impact to Medicare of the unreconciled outlier payments and cost reports for all the
\ncontractors was approximately $428.3 million. Medicare supplements basic prospective
\npayments for inpatient hospital services by making outlier payments for unusually high-cost
\ncases.
\nDeceased Beneficiaries
\nMedicare paid for HIV drugs for over 150 deceased beneficiaries in 2012. CMS has edits (i.e.,
\nsystems processes) in place that reject prescription drug event records for drugs with dates of
\nservice more than 32 days after death. This practice allows payment for drugs for deceased
\nbeneficiaries for dates of service within 32 days of death. A change in the edits would affect all
\nPart D drugs, not just HIV drugs.
\n43
\nAmbulance Transports
\nMedicare paid $24 million in the first half of 2012 for ambulance transports that did not meet
\ncertain program requirements justifying payments, and that about one in five ambulance
\nsuppliers had questionable billing. These findings indicate that inappropriate and questionable
\nbilling for ambulance transports pose vulnerabilities to Medicare program integrity.
\nOther OIG Fraud and Abuse Prevention Activities
\nHCFAC funding also supported HHS-OIGs continued enhancement of data analysis and mining
\ncapabilities for detecting health care fraud, including tools that allow for complex data
\nanalysis. OIG continues to use data mining, predictive analytics, trend Assessment, and modeling
\napproaches to better analyze and target the oversight of HHS programs. Analysis teams use
\nnear-time data to examine Medicare claims for known fraud patterns, identify suspected fraud
\ntrends, and to calculate ratios of allowed services as compared with national averages, as well as
\nother assessments. When united with the expertise of OIG agents, auditors, and evaluators, as
\nwell as our HEAT partners, HHS-OIGs data analysis fosters a highly effective combination of
\ntechnologies and traditional skills to the fight against fraud, waste, and abuse.
\nIndustry Outreach and Guidance
\nAdvisory Opinions
\nCentral to the HIPAA guidance initiatives is an advisory opinion process through which parties
\nmay obtain binding legal guidance as to whether their existing or proposed health care business
\ntransactions run afoul of the AKS, the CMP laws, or the exclusion provisions. During FY 2015,
\nthe HHS-OIG, in consultation with DOJ, issued 15 advisory opinions. A total of 329 advisory
\nopinions have been issued during the 19 years of the HCFAC program.
\nCorporate Integrity Agreements
\nMany health care providers elect to settle their cases before litigation. As part of the settlements,
\nproviders often agree to enter into Corporate Integrity Agreements (CIA) with OIG to avoid
\nexclusions from Medicare, Medicaid, and other federal health care programs. Under a CIA, a
\nprovider commits to establishing a program and taking other specified steps to ensure future
\ncompliance with Medicare and Medicaid rules. The compliance programs are designed, in part,
\nto prevent future fraud. OIG monitors providers compliance with these agreements. OIG may
\nimpose penalties on entities that fail to comply with the requirements of their CIAs, as shown in
\nthe example below:
\nIllinoisIn March 2015, LifeWatch Services, Inc., a durable medical equipment supplier,
\nagreed to pay $737,572 to settle allegations that it knowingly submitted false claims to
\nMedicare from February 21, 2013 through June 30, 2014 for cardiac monitoring services.
\nSpecifically, OIG alleged that LifeWatch submitted claims to Medicare for Ambulatory
\nCardiac Telemetry (ACT) services for which the medical record documentation did not
\nsupport that the physician had ordered ACT services. The settlement resolves a reportable
\nevent submitted by LifeWatch as required under its CIA. LifeWatch entered into the CIA in
\nMarch 2012 as part of an $18.5 million civil settlement with the United States, resolving
\nallegations that, among other things, it submitted claims to Medicare for cardiac monitoring
\n44<\/p>\n
services that were not medically necessary and encouraged the use of more expensive cardiac
\nmonitoring devices when a less expensive device was sufficient to meet the patients needs.
\nCenters for Medicare & Medicaid Services
\nIn FY 2015, CMS was allocated $13.5 million by HHS, and appropriated $544.3 million in
\ndiscretionary funds by Congress to support its comprehensive program integrity strategy for
\nMedicare, Medicaid, and the Childrens Health Insurance Program (CHIP). With these funds,
\nCMS is working to ensure that public funds are not diverted from their intended purpose: to
\nmake accurate payments to legitimate entities for allowable services or activities on behalf of
\neligible beneficiaries of federal health care programs. CMS also performs many program
\nintegrity activities that are beyond the scope of this report because they are not funded directly
\nby the HCFAC Account or discretionary HCFAC funding. Medicare Fee-for-Service and
\nMedicaid improper payment rate measurement and activities, the Fraud Prevention System,
\nRecovery Audit Program activities, and prior authorization initiatives are discussed in separate
\nreports, and CMS will submit a combined Medicare and Medicaid Integrity Program report to
\nCongress later this year.
\n1. Prevention
\nMoratoria
\nBuilding on strong anti-fraud efforts already underway in the home health provider and
\nambulance supplier arenas, CMS in July 2013 announced the first use of its temporary moratoria
\nauthority granted by the Affordable Care Act in certain counties in Florida, Illinois, and
\nTexas. The moratoria stops the enrollment of new home health and ambulance enrollments in
\nMedicare, Medicaid, and CHIP in fraud hot spot areas of the country with demonstrated
\noversupply of certain types of providers. In January 2014, CMS extended the original
\nenrollment moratoria for these locations and expanded the enrollment moratoria to include
\nHHAs in Broward county Florida; the Michigan counties of Wayne, Macomb, Monroe, Oakland,
\nand Washtenaw; and the Texas counties of Dallas, Collin, Denton, Ellis, Kaufman, Rockwall,
\nTarrant, Harris, Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller.
\nCMS also expanded the moratorium on ground ambulance suppliers in the Philadelphia area,
\nincluding several New Jersey counties, at the same time. All of these moratoria actions continue
\nto be extended an additional six months with the latest notice effective January 2016. The focus
\nof these efforts is to prevent and deter fraud, waste, and abuse in problematic services and areas
\nacross the country while ensuring beneficiary access to care.
\nUnder the moratoria, existing providers and suppliers can continue to deliver and bill for
\nservices, but no new provider and supplier applications will be approved in these areas, allowing
\nCMS and its law enforcement partners to remove bad actors from the program while blocking
\nprovider entry or re-entry into these already over-supplied markets. After reviewing the number
\nof providers in the moratoria areas and recent Medicare Payment Advisory Commission
\n(MedPAC) reports, CMS determined that the moratoria do not adversely impact beneficiary
\naccess to care. CMS is required to re-evaluate the need for such moratoria every six months.
\n45<\/p>\n
One Program Integrity
\nIn FY 2015, CMS continued making improvements and changes to One Program Integrity (One
\nPI), CMS centralized portal that provides CMS contractors and law enforcement with a single
\naccess point to Medicare data, as well as analytic tools to review the data. CMS continues to
\nenhance the existing analytic tools. One PI improves CMS ability to detect fraud, waste, and
\nabuse with consistent, reliable, and timely analytics.
\nOne PI users have access to the CMS Integrated Data Repository (IDR) to perform data
\nanalytics. The IDR contains a comprehensive and accurate set of Medicare provider, beneficiary,
\nand claims data from Medicare Parts A, B, C, and D back to January 2006. The IDR includes
\nclaims data at three distinct points in the claim life-cycle: at the time the claims are enumerated,
\nat the time claims are adjudicated, and at the time the claims have payment data posted. This
\naccess allows users to perform prepayment analytics on historical data and develop models that
\ncan be applied in CMS predictive analytics system, the Fraud Prevention System. With claims
\navailable from 2006, Zone Program Integrity Contractors (ZPICs) are also able to improve their
\nanalytics for post-payment detection of fraud, waste, and abuse.
\nIn order to streamline access for our law enforcement partners, in 2015, CMS released a reengineered
\nversion of the Services Tracking Analysis and Reporting System (STARS) that
\nimproves system access, enhances the end-user experience, and improves overall
\nperformance. STARS, a health care fraud, waste, and abuse analytics tool, is part of the One PI
\nsuite of tools. The One PI team enhanced the overall training process by including virtualized
\ntraining in combination with on-site instructor led training to reduce training costs and provide
\nbetter access for law enforcement. Additionally, STARS initiated a monthly end users group to
\nincrease collaboration.
\nCompromised Number Checklist
\nIn January 2010, CMS created the repository of compromised Medicare beneficiary and provider
\nID numbers called the Compromised Number Checklist (CNC). In March 2013, CMS deployed
\na Web-based application that allows direct update and real-time access of CNC information by
\nCNC users. This database is populated by submissions from CMS program integrity
\ncontractors. The purpose of the CNC is to share compromised ID numbers and any associated
\ncorrective actions that have been taken among CMS staff, program integrity contractors, and law
\nenforcement such as the FBI. CMS uses the national CNC database to enhance efforts to detect
\nand prevent fraud and abuse in Medicare.
\nThe Command Center
\nCMS opened its state-of-the-art Command Center on July 31, 2012 to facilitate improvements in
\nhealth care fraud detection and investigation, drive innovation, and help reduce fraud and
\nimproper payments in the Medicare and Medicaid programs. CMS is using the Command
\nCenter to collaborate in unprecedented ways with the private sector, law enforcement, and our
\nState partners. The Command Centers advanced technologies and collaborative environment
\nallow multi-disciplinary teams of experts and decision makers to more efficiently coordinate
\npolicies and case actions, reduce duplication of efforts, and streamline fraud investigations for
\nmore immediate administrative action. These collaborative activities enable CMS to take
\nadministrative actions, such as revocations of Medicare billing privileges and payment
\nsuspensions, more quickly and efficiently.
\n46<\/p>\n
In FY 2015, the Command Center conducted 41 missions that included participants from CMS
\nand our partners, including the HHS-OIG and FBI that are designed to lead to improvements in
\nthe fraud prevention and detection process. Missions are facilitated collaboration sessions that
\nbring together experts from various disciplines to improve the processes for fraud prevention in
\nMedicare and Medicaid. CMS is also working with the FBI, HHS-OIG, and other federal
\nagencies in the Command Center to pool resources to tackle cross-cutting issues surrounding
\nfraud prevention.
\nDME Initiatives
\nDME suppliers pose a high risk of fraud to the Medicare Program and CMS has undertaken an
\naggressive strategy to address this risk. Through the DME Stop Gap Project, initiated in 2009,
\nZPICs\/Program Safeguard Contractors (PSCs) have increased site visits and interviews of DME
\nsuppliers, providers, and beneficiaries receiving DME products in high billing areas for DME
\nsupplies and products. In FY 2015, these additional funds supported DME investigations, which
\nincluded site visits to, and interviews of, suppliers, doctors, and patients that were identified as
\npotentially suspicious or high risk.
\nNational Correct Coding Initiative (NCCI)
\nCMS developed the National Correct Coding Initiative (NCCI) to promote national correct
\ncoding methodologies and to control improper coding leading to inappropriate payment in
\nMedicare claims. The use of the NCCI edits saved the Medicare program $681.9 million in FY
\n2014.12 In FY 2015, CMS also continues to work with states to fully and correctly implement
\nthe NCCI methodologies in their Medicaid programs, to add new Medicare and Medicaid NCCI
\nedits to the quarterly Medicaid NCCI edit files that are compatible with claims filed with
\nMedicaid, and to update the technical guidance document for states.
\nMedicaid Enterprise System
\nTodays modern design of IT systems encompasses the use of current technologies that span
\nacross the entire Medicaid Enterprise. These systems work in concert with one another and must
\nadhere to certain regulations and guidance, including the Medicaid Information Technology
\nArchitecture (MITA) framework and the Seven Standards and Conditions. Adhering to these
\nmandates will promote the consistency of business and technical processes and IT platforms, as
\nwell as standards across the Medicaid Enterprise.
\nThe project ( help with nursing paper writing from experts with MSN & DNP degrees) includes independent technical Helpance for IT and policy requirements, including
\nmonitoring and oversight, in working with state-specific system requirements, IT system builds,
\nand associated interfaces for all states and the territories. All fifty states and the territories
\nreceived technical Helpance with moving through the Enterprise Life Cycle (ELC) Gate Review
\nProcess, including any associated consults. States received Helpance with project ( help with nursing paper writing from experts with MSN & DNP degrees) management,
\nimplementation, and operations. Technical artifacts required by statute were analyzed and
\ntracked to assess state progress. Gap analyses were done on a regular basis and risk registers
\nwere studied to identify opportunities for improvement.
\n12 NCCI savings are from Medicare Part B Medically Unlikely Edits (MUEs) and Part B Procedure-to-Procedure
\n(PTP) Edits.
\n47
\n2. Detection
\nStrengthened Program Integrity Activities in Medicare Advantage and Medicare Part D
\nMedicare Drug Integrity Contractors (MEDICS)
\nNational Benefit Integrity
\nIn FY 2015, the National Benefit Integrity (NBI) MEDIC received on average approximately
\n762 actionable complaints per month, processed an average of 54 requests for information from
\nlaw enforcement per month, and referred an average of 48 cases to law enforcement per month
\nthrough July. NBI MEDIC referrals have resulted in sentences ordering restitution of $41.4
\nmillion, forfeitures of $13.6 million, and civil settlements of $12.2 million according to FY 2015
\nnotifications from law enforcement. The NBI MEDIC was responsible for Helping the OIG and
\nthe Department of Justice (DOJ), through data analysis and investigative case development, in
\nachieving 68 convictions, 35 arrests, and 45 indictments from FY 2015 notifications. In one
\ncase, the NBI MEDIC investigated complaints concerning out-of-country beneficiary
\nenrollments in Nicaragua and the Dominican Republic alleging that a Medicare plan was
\nadvertising improper inducements for Medicare-eligible beneficiaries to sign up for the plan.
\nTen subjects involved were charged with multiple counts of health care fraud and have pled
\nguilty. As of July 2015, 6 of the 10 have been sentenced for their involvement in a transnational
\nhealth care fraud scheme and ordered to pay restitution of $14.5 million.
\nOutreach and Education
\nIn FY 2015, the Outreach and Education (O&E) MEDIC facilitated the CMS Parts C & D Fraud
\nWaste and Abuse (FWA) training sessions that offered Medicare Advantage organizations and
\nPrescription Drug plans an opportunity to collaborate and discuss techniques on how to prevent
\nand detect fraud, waste, and abuse in the Medicare Advantage and Part D programs. These FWA
\ntraining sessions are designed to educate Medicare Advantage organization and Prescription
\nDrug plan staff through enhanced collaboration, information sharing, data analytics and
\ncommunication. FWA training session stakeholders include plan sponsors, Pharmacy Benefit
\nManagers (PBMs), representatives from law enforcement agenciesincluding HHS-OIG, U.S.
\nDOJ, and other state and local law enforcement entities. These FWA training sessions provide a
\nforum for stakeholders to learn about the most recent fraud schemes and fraud prevention best
\npractices to Help in developing effective fraud prevention programs.
\nThe O&E MEDIC is also responsible for other outreach activities and has developed many
\ncourses and resources to train Medicare Advantage organizations and Prescription Drug plans on
\nbest practices to detect and investigate Medicare Advantage and Prescription Drug fraud, waste,
\nand abuse. In order to help Parts C and D Plan sponsors better educate their enrollees on fraud
\nwaste and abuse, the O&E MEDIC developed a video on Open Enrollment Fraud, as well as
\nseveral fraud alerts on identity theft, prescription drug abuse, telemarketing, and phishing
\nschemes. The O&E MEDIC also created a video tutorial for providers to explain how to enroll
\nin PECOS and comply with the CMS-4159-F requirements. In FY 2015, the O&E MEDIC also
\nupdated its most comprehensive fraud fighting tool, the Medicare Advantage and Part D Fraud
\nHandbook: Practical Techniques and Approaches on Detecting and Preventing Fraud, and an
\nOnline Training Module for Medicare Advantage organizations (MAOs) and Part D sponsors.
\nThe handbook is a modular online reference providing MAOs and Part D sponsors with industry
\nbest practices regarding processes, methods, and resources to support fraud prevention,
\n48<\/p>\n
detection, corrective action, preliminary investigation, and referral activities. The training is an
\nonline presentation covering each chapter of the Fraud Handbook in an on-demand webcast
\nformat.
\nMedicare Advantage (MA) Benefits Review Activities
\nEach year, MA organizations are required to submit bids detailing how their MA plans will
\nprovide coverage to beneficiaries for the following year. These 3,600 MA plans cover more than
\n17 million beneficiaries. Bid submissions are reviewed to ensure they do not discriminate
\nagainst beneficiaries and comply with all CMS regulations. Plan requirements are established
\nand communicated annually and the following reviews are performed:
\nLow Enrollment PlansEach year, CMS evaluates existing MA plans that have low
\ntotal enrollment to make sure these plans are sustainable over time and protect
\nbeneficiaries from selecting a potentially unsustainable plan.
\nTotal Beneficiary Cost (TBC)Evaluate increases in beneficiary cost sharing or
\ndecreases in plan benefits from one year to the next. This Assessment ensures
\nbeneficiaries receive value in their benefit package selection and do not experience large
\nincreases in out of pocket costs.
\nMaximum Out of Pocket Costs (MOOP)This review examines the maximum out-ofpocket
\ncosts that face beneficiaries who enroll in MA. These reviews protect
\nbeneficiaries from very high out of pocket medical costs.
\nMeaningful DifferenceThis review helps to reduce potential confusion for
\nbeneficiaries when they are choosing between multiple plan options. By conducting this
\nreview, CMS helps to protect meaningfully different choices between plans and prevent
\nMA organizations from offering similar plans in the same geographic area.
\nService Category Cost-Sharing StandardsEach year, CMS evaluates the costsharing
\nstandards plans include in their bids to make sure the plans do not exceed
\nestablished limits. There are currently 26 cost-sharing health care service categories that
\nhave established limits and this review enables CMS to protect beneficiaries from
\ndiscriminatory cost sharing levels.
\nActuarial EquivalenceCMS also reviews bids to make certain the actuarially
\nestimated cost sharing presented in the bid does not exceed the cost-sharing levels in
\nOriginal Medicare. CMS currently examines four categories for actuarial equivalence
\nand this examination helps guard against plans imposing discriminatory cost-sharing on
\nbeneficiaries.
\nSupplemental BenefitsThere are several reviews conducted in this area, including a
\nreview of supplemental benefits that help make sure that any optional supplemental
\nbenefits offered are of reasonable value, as well as a review to make certain the benefits
\nare offered in a non-discriminatory fashion.
\n49<\/p>\n
All of these reviews are conducted in careful coordination with the Office of the Actuary and the
\nMedicare Drug Benefit Group to make certain that plans make all necessary changes to their
\nbids. These reviews occur between early June and August and involve communications with
\nMA organizations to correct issues and resubmit their bids. Following bid approval, MA
\norganizations must complete the contracting process with CMS and may market to beneficiaries
\nbeginning October 1. MA benefits requirements and review processes are intended to protect
\nbeneficiaries from discrimination and to make sure that MA plans provide value to enrollees.
\nMedicare Advantage Encounter Data Processing System Contract
\nThe Medicare Advantage (MA) Encounter Data Processing System (EDPS) is currently being
\nmaintained and modified out of guidance published in the final FY 2009 inpatient prospective
\npayment system (IPPS) rule. In that rule, CMS revised regulations to clarify that CMS has the
\nauthority to require MA organizations to submit encounter data for each item and service
\nprovided to MA plan enrollees. Consistent with this authority, CMS is requiring MA
\norganizations to submit encounter data for dates of service January 3, 2012 and later. MA plans
\nare required to submit data for all institutional, professional, and DME services provided to MA
\nplan enrollees on or after that date. To date, CMS has collected over 1.7 billion encounter data
\n(ED) records.
\nThe encounter data detail each item and service provided to enrollees of Medicare Advantage
\norganizations. These records are comparable in format and detail to claims submitted to the
\nMACs by FFS providers. The encounter data collected by EDPS will allow CMS to recalibrate
\nthe risk adjustment payment model, so that MA payments more accurately reflect the patterns of
\ncare and the predicted costs of diseases for MA enrollees. Recalibrating the model on MA
\ndiagnoses and expenditures, rather than using the FFS experience, will result in payments that
\nare more accurate to MA organizations. CMS is also able to use the information to evaluate
\nservice utilization, assess quality of care, and assess the performance of MA plans.
\nBeginning with payment year 2015, CMS began to use encounter data as an additional source of
\ndiagnoses to risk adjust payments to Medicare Advantage Organizations. For payment year
\n2016, CMS continued that transition and will ultimately use encounter data as the sole source of
\nplan-submitted diagnosis information.
\nMedicaid\/CHIP Financial Management Project
\nUnder this project ( help with nursing paper writing from experts with MSN & DNP degrees), funding specialists, including accountants and financial analysts, worked to
\nimprove CMS financial oversight of the Medicaid Program and CHIP. In FY 2015 through the
\ncontinued efforts of these specialists, CMS removed an estimated $2.5 billion (with
\napproximately $1 billion recovered and $1.5 billion resolved) of approximately $9.4 billion
\nidentified in questionable Medicaid costs.
\nFurthermore, an estimated $1.028 billion in questionable reimbursement was actually averted
\ndue to the funding specialists preventive work with States to promote proper State Medicaid
\nfinancing. The funding specialists activities included reviews of proposed Medicaid state plan
\namendments that related to reimbursement; development of financial management reviews;
\nresearch regarding state Medicaid financing policy and practices; collaboration with states to
\nresolve the Medicaid and CHIP portions of the A-133 Single State audits; and identification of
\n50
\nsources of the non-Federal share of Medicaid program payments to ensure proper financing of
\nMedicaid program costs.
\nHHS-OIG Hotline Database
\nOIG Hotline Operations accepts tips and complaints from all sources about potential fraud,
\nwaste, abuse, and mismanagement in HHS programs. The CMS-OIG HOTLINE database is
\nused by CMS and its contractors to investigate and resolve those complaints that are sent from
\nthe HHS OIG.
\n3. Transparency and Accountability
\nHealthcare Fraud Prevention Partnership
\nOne of the Secretarys key health care fraud prevention initiatives is to establish an ongoing
\npartnership with the private sector to fight fraud across the health care system. Data collected
\nand shared across payers can Help payers in evaluating trends, recognizing patterns consistent
\nwith potential fraud, and potentially uncover schemes or bad actors they could not otherwise
\nidentify using only their own information. Such collaboration is the purpose of the Healthcare
\nFraud Prevention Partnership (HFPP), which brings together both public and private, federal and
\nstate-level individuals and organizations combatting health care fraud across all payers.
\nThe legal authority for the HFPP is 42 U.S.C. 1320a-7c. The delegated authority allows for the
\nHFPP to consult with, and arrange for the collection of data from, and sharing of data with
\nrepresentatives of health plans under the HCFAC program.
\nCMS added additional partners to the HFPP and is targeting further expansion of the HFPP to
\ninclude additional willing public and private payers once the technical and legal components of
\nthe program are in place. The increase in members providing data will increase the resources
\nnecessary for the trusted third party contractor to process and store the increased number of
\nclaims data from the new members.
\nThe HFPP has completed eight studies to date, listed below:
\nStudy 1, Iterations 1 & 2 (counted as two studies): Misused Codes and Fraud Schemes
\nTo share information on misused codes and potential fraud schemes to improve overall
\nawareness of fraud patterns and trends.
\nStudy 2, Iterations 1 & 2 (counted as two studies): Non-Operational ProvidersTo
\ncreate an aggregate list of non-operational provider entities for use in investigations.
\nStudy 3: Terminated\/Revoked ProvidersTo create an aggregate list of
\nterminated\/revoked provider entities for potential investigations.<\/p>\n
Study 4: Top Billing PharmaciesTo identify outlier pharmacies that are dispensing
\na high amount of controlled prescription drugs.
\nStudy 5: Urine Drug ScreensTo study how providers bill for qualitative and
\nquantitative urine drug screens.
\n51<\/p>\n
In-Person Study: High Risk ProceduresTo view summary data live and examine
\npotential trends in high-risk procedures.
\nThe HFPP also has received input from partners about which study topic (sample nursing essay examples by the best nursing assignment writing service)s would have the
\nhighest potential value and identified 15 study topic (sample nursing essay examples by the best nursing assignment writing service)s of common interest in addition to the
\neight studies previously mentioned.
\nAfter using the first study’s findings for analyses and corrective action determinations,
\nCMS reported $187.7 million in savings to the Medicare Trust Funds from system edits,
\nrevocations, and payment suspensions related to the first two studies listed above. This
\nestimate is based on CMS’ latest savings calculation methodologies, but the estimate is
\nsubject to change due to improvements in the methodological approach and data accuracy.
\nHowever, CMS does not expect any changes to be significant.
\nParticipating HFPP partners received results for studies 1-5. Partners have been assessing and
\ncontinue to assess the results and independently determine appropriate corrective actions.
\nPartner outcomes, savings, and cost avoidance data will be available in the future.
\nImproper Payment Rate Measurement and Increased Accountability in Medicaid and CHIP
\nPrograms
\nThe Improper Payments Information Act (IPIA) of 2002, as amended by the Improper Payments
\nElimination and Recovery Improvement Act of 2012 (IPERIA) requires each agency to
\nperiodically review programs it administers, identify programs that may be susceptible to
\nsignificant improper payments, estimate the amount of improper payments, submit those
\nestimates to Congress, and report on actions the agency is taking to reduce improper payments.
\nThe Medicaid Program and CHIP have been identified as at risk for significant improper
\npayments. CMS estimates improper payment rates in Medicaid and CHIP established through
\nthe Payment Error Rate Measurement (PERM) Program. The improper payment rates are based
\non reviews of the fee-for-service (FFS), managed care, and eligibility components of Medicaid
\nand CHIP in the fiscal year under review. CMS measures Medicaid and CHIP improper
\npayment rates using a 17-state rotation so that each state is reviewed once every three years.
\nIn light of changes to the way states adjudicate eligibility for Medicaid and CHIP under the
\nAffordable Care Act, CMS is currently updating the PERM eligibility component measurement
\nmethodology and related program regulations to reflect the required changes. During this time,
\nCMS will not conduct the eligibility measurement component of PERM and the national
\nMedicaid eligibility improper payment rate will be held constant at the FY 2014 reported rate as
\na proxy in the overall improper payment rate calculation. In place of PERM eligibility, all states
\nare required to conduct eligibility review pilots through FY 2018. The eligibility review pilots
\nprovide more targeted, detailed information on the accuracy of eligibility determinations and
\nprovide states and CMS with critical feedback during initial implementation.
\nCMS reported in the FY 2015 Agency Financial Report the national Medicaid improper payment
\nrate that is based on measurements that were conducted in FYs 2013, 2014, and 2015. The FY
\n2015 national Medicaid improper payment rate is 9.8 percent, representing $29.1 billion in
\n52<\/p>\n
estimated improper payments compared to the FY 2014 improper payment rate of 6.7 percent or
\n$17.5 billion in improper payments. The national component improper payment rates are as
\nfollows: Medicaid FFS10.59 percent, Medicaid managed care0.12 percent, and Medicaid
\neligibility3.11 percent. The Medicaid eligibility component improper payment rate is held
\nconstant at the FY 2014 reported rate of 3.1 percent. The major cause of error was state
\ndifficulties achieving compliance with new system requirements that were put in place to
\nstrengthen program integrity. The Affordable Care Act requires all referring\/ordering providers
\nto be enrolled in Medicaid and requires claims to contain the referring\/ordering provider
\nNational Provider Identifier (NPI). The Affordable Care Act also requires states to screen
\nproviders under a risk-based screening process prior to enrollment. Additionally, a new Health
\nInsurance Portability and Accountability Act of 1996 (HIPAA) standard requires the attending
\nproviders NPI be on all electronically-filed institutional claims. While these requirements will
\nultimately strengthen the integrity of the program, it takes time for states to make the necessary
\ncompliant systems changes.
\nCMS reported in the FY 2015 Agency Financial Report the national CHIP improper payment
\nrate that is based on measurements that were conducted in FYs 2013, 2014, and 2015. The FY
\n2015 national CHIP improper payment rate is 6.8 percent, representing $0.6 billion in estimated
\nimproper payments compared to the FY 2014 improper payment rate of 6.5 percent or $0.6
\nbillion in improper payments. The national component improper payment rates are as follows:
\nCHIP FFS7.33 percent and CHIP managed care0.37 percent. The CHIP eligibility
\ncomponent improper payment rate is held constant at the FY 2014 reported rate of 4.2 percent.
\nThe major cause of error in CHIP is the same cause described in Medicaid above.
\nCMS is currently measuring cycles that will be reported in FYs 2016 and 2017.
\nImproper Payment Rate Measurement and Increased Accountability in Medicare Advantage
\n(Part C) and Medicare Prescription Drug Benefit Program (Part D)
\nIn compliance with IPIA, as amended by IPERA and IPERIA, CMS has implemented a
\nsystematic plan regarding improper payments for Part C and D programs.
\nThe Part C payment error estimate reported for FY 2015 (based on calendar year CY 2013) is 9.5
\npercent. The Part C payment error is driven by errors in risk adjustment data (clinical diagnosis
\ndata) submitted by Part C plans to CMS for payment purposes. Specifically, the Part C payment
\nerror estimate reflects the extent to which diagnoses that plans report to CMS are not supported
\nby medical record documentation.
\nIn an effort to improve the Part C improper payment rate, CMS has implemented two key
\nspecific corrective actions described below: contract level audits and new regulatory provisions.
\nContract-Level Audits: CMS conducts Risk Adjustment Data Validation (RADV)
\ncontract-level audits to recover overpayments. RADV verifies, through medical record
\nreview, the accuracy of enrollee diagnoses submitted by MA organizations for risk
\nadjusted payment. RADV audits are HHSs primary corrective action to recoup
\noverpayments from MA organizations. CMS expects that payment recovery will have a
\nsentinel effect on the quality of risk adjustment data submitted by plans for payment.
\nRADV audits of payment year 2011, which began in FY 2014, will be the first CMS
\nreviews to recoup funds based on extrapolated estimates.
\n53<\/p>\n
New Regulatory Provisions: In CMS-4159-F, Policy and Technical Changes to the
\nMedicare Advantage and the Medicare Prescription Drug Benefit Program (79 FR 100),
\nHHS codified the Affordable Care Act requirement that MA organizations must report
\nand return overpayments that they identify. In CMS-1613-FC, CMS-Identified
\nOverpayments Associated with Submitted Payment Data (79 FR 66769), HHS also
\nestablished a payment recovery and appeal mechanism to be applied when HHS identifies
\nerroneous payment data submitted by an MA organization.
\nThe Part D payment error estimate reported for FY 2015 (based on CY 2012) is 3.6 percent. The
\nFY 2015 Part D error estimate represents the combined impact on Part D payments of four
\nsources of error: Payment error related to low income subsidy status; payment error related to
\nMedicaid status; payment error related to prescription drug event data validation; and payment
\nerror related to direct and indirect remuneration.
\nIn an effort to improve the Part D error rate, CMS has implemented two key specific corrective
\nactions described below: outreach to plan sponsors and new regulatory provisions.
\nOutreach: Formal outreach to plan sponsors will continue for invalid\/incomplete
\ndocumentation.
\nNew Regulatory Provisions: HHS codified the ACA requirement that Part D sponsors
\nmust report and return overpayments that they identify. CMS also proposed a payment
\nrecovery and appeal mechanism to be applied when CMS identifies erroneous payment
\ndata submitted by a Part D sponsor.
\nProbable Fraud Measurement Pilot
\nThere is no reliable estimate of the amount of fraud in the Medicare program. Documenting the
\nbaseline amount of fraud in Medicare is of critical importance, as it allows officials to better
\nevaluate the success of ongoing fraud prevention activities. In collaboration with the HHS
\nOffice of the Helpant Secretary for Planning and Assessment (ASPE), CMS developed the
\nmethodology for the first nationally representative estimate of the extent of probable fraud in the
\nMedicare FFS program in FY 2011. In FY 2012, CMS developed the measurement tools for the
\npilot, and collaborated with government partners, including ASPE, on the strategy for
\nimplementation. CMS received OMB approval in May 2013. CMS awarded a contract in
\nSeptember 2015 to conduct the pilot.
\nThis project ( help with nursing paper writing from experts with MSN & DNP degrees) will estimate probable fraud in the Home Health benefit to pilot test the
\nmeasurement approach and calculate a service-specific estimate. This pilot is measuring
\nprobable fraud rather than fraud because fraud is a legal determination that involves
\nestablishing intenta determination that is made through the judicial system. A review panel of
\nexperienced health care analysts, clinicians, policy experts, and fraud investigators will review
\nall collected data and determine if there is sufficient evidence to warrant a referral to law
\nenforcement. After the completion of this pilot, CMS will assess the value of expanding the
\nmeasurement to other areas of Medicare. CMS began collecting data on probable fraud to
\nestablish an estimate of probable fraud within HHAs in 2015.
\n54<\/p>\n
4. Recovery
\nSuspension
\nCMS in FY 2015 continued its use of the new Affordable Care Act authority to suspend
\npayments to providers during an investigation of a credible allegation of fraud. CMS also has
\nauthority to suspend payment if reliable information of an overpayment exists. During FY 2015,
\nthere were 420 payment suspensions that were active at some point during the fiscal year (data
\nreflected as of September 10, 2015). Of the 420 payment suspensions, 105 new payment
\nsuspensions were imposed during FY 2015.
\nField Offices
\nCMS has designated program integrity field offices located in or near the HEAT cities of Miami,
\nLos Angeles, and Brooklyn that provide a CMS presence in high risk fraud areas of the country.
\nAll three field offices have staff that are designated CMS Strike Force Liaisons, who coordinate
\nwith law enforcement, facilitate data analysis, and expedite suspension requests. The field
\noffices also work with CMS central office and the ZPICs to conduct data analysis to proactively
\nidentify targets and to coordinate efforts among various contractors and agencies to identify local
\nissues and vulnerabilities with national or regional impact.
\nCMS program integrity field offices develop solutions to the most challenging fraud issues in
\ntheir regions. For example, the Miami field office has implemented a comprehensive, multiagency
\napproach to address Medicare and Medicaid aspects of health care fraud in South Florida
\nand has served as a testing ground for efforts that have been expanded to a national level. To
\naddress emerging fraud schemes by ambulance providers, the Los Angeles staff is working with
\ncounty Emergency Medical Service licensing authorities and related health care providers; CMS
\ncontractors; and local, state, and federal law enforcement.
\nEnrollment Special Study
\nThis is a project ( help with nursing paper writing from experts with MSN & DNP degrees) designed to utilize and expand the existing programmatic infrastructures to take
\nadministrative actions under existing CMS authorities by conducting site verifications of
\npotentially high risk providers and suppliers. The information obtained during site verifications
\nis used to determine if provider enrollment requirements are met and to calculate a fraud level
\nindicator.
\nSince inception in July 2009, this project ( help with nursing paper writing from experts with MSN & DNP degrees) has produced significant results; including an increased
\nnumber of revocations, deactivations, and prepayment edit savings. The project ( help with nursing paper writing from experts with MSN & DNP degrees) has also
\nprovided valuable information that CMS has used to identify and implement programmatic
\nchanges that have proven successful to deter and prevent Medicare fraud.
\nAs of June 30, 2015, the Medicare Administrative Contractor covering Florida (First Coast
\nService Operations), had conducted 6,838 site verifications to verify providers and suppliers
\noperational status, deactivated 117 practice locations, and revoked or denied 773 providers.
\nCMS saved $8,919,228 from prepayment medical record review.
\n55
\nAdministration for Community Living
\nThe mission of the Senior Medicare Patrol (SMP) program is to empower and Help Medicare
\nbeneficiaries, their families, and caregivers to prevent, detect, and report health care fraud,
\nerrors, and abuse through outreach, counseling, and education. In FY 2015, the Administration
\nfor Community Living (ACL) was allocated $3.4 million in HCFAC funding by HHS to support
\ninfrastructure, technical Helpance, and other SMP program support. In addition to this funding,
\nACL was allocated $5.3 million for capacity-building activities designed to enhance the
\neffectiveness of state-wide SMP programs. During FY 2010 and FY 2011, CMS had provided
\nthis capacity funding to ACL for the SMP project ( help with nursing paper writing from experts with MSN & DNP degrees)s. Since FY 2012 HCFAC funding has been
\nallocated directly to ACL. The base SMP project ( help with nursing paper writing from experts with MSN & DNP degrees) grant is funded from a separate Congressional
\nappropriation.
\nSMP Project Activities and Outcomes
\nACL funds 54 SMP statewide project ( help with nursing paper writing from experts with MSN & DNP degrees)s (each state, Guam, Puerto Rico, U.S. Virgin Islands and
\nthe District of Columbia) with funds authorized in the Older American Act and the HCFAC
\nWedge. In addition to the project ( help with nursing paper writing from experts with MSN & DNP degrees)s base grants, funded from the Older American Act, the SMP
\nprogram offers HCFAC funds to each grantee so that they can expand their program. Prior to FY
\n2013, the additional funding was based largely on the known fraud prevalence within each state.
\nHowever, in FY 2013, the program moved to a formula-driven allocation taking into account the
\nnumber of Medicare beneficiaries living in each state and the ruralness of the state. The new
\nformula is intended to provide a more equitable allocation of funds and reflects the reality that
\nthe prevalence of fraud is much broader than a few selected states.
\nAccording to the most recent annual performance report from HHS-OIGs Deputy Inspector
\nGeneral for Assessment and Inspections, issued August 2015, a total of 5,249 active volunteers
\nserved SMP project ( help with nursing paper writing from experts with MSN & DNP degrees)s during 2014. These volunteers performed an essential function of this
\nprogram, contributing 117,300 hours and conducting over 202,862 one-on-one counseling
\nsessions in efforts to educate beneficiaries about how to prevent and detect Medicare fraud
\nwithin local communities.
\nOutreach to Medicare beneficiaries is a key element of the SMP program. During 2014, SMP
\nproject ( help with nursing paper writing from experts with MSN & DNP degrees)s held 12,417 community outreach education events reaching more than 1,118,982 people,
\nand were responsible for over 110,615 media airings to increase beneficiary awareness about
\nissues related to Medicare fraud. In addition, over 452,714 beneficiaries were educated through
\n14,692 group educational sessions conducted by SMP programs in local communities. SMP
\nproject ( help with nursing paper writing from experts with MSN & DNP degrees)s nationwide received 94,368 inquiries for information or Helpance in 2014 from or on
\nbehalf of beneficiaries. This included receipt of 1,614 complex issues, i.e., beneficiary
\ncomplaints requiring further research, Helpance, case development, and\/or referral. SMP
\nproject ( help with nursing paper writing from experts with MSN & DNP degrees)s reported that 1,369 complex issues were resolved for beneficiaries during 2014, while
\n660 complex issues with an estimated dollar value of over $994,603, were referred to law
\nenforcement, CMS integrity contractors, state Medicaid Fraud Control Units, or other entities for
\nfurther action. During this period, HHS-OIG documented that $200,598 in health care
\nexpenditures were avoided and nearly $741,562 in Medicare, Medicaid and other savings
\nresulted from actions taken by the SMP program.
\n56
\nWe continue to emphasize the project ( help with nursing paper writing from experts with MSN & DNP degrees)s may not be receiving full credit for savings
\nattributable to their work. It is not always possible to track referrals to Medicare
\ncontractors or law enforcement from beneficiaries who have learned to detect fraud,
\nwaste, and abuse from the project ( help with nursing paper writing from experts with MSN & DNP degrees)s. In addition, the project ( help with nursing paper writing from experts with MSN & DNP degrees)s are unable to track the
\nsubstantial savings derived from a sentinel effect whereby fraud and errors are reduced
\nby Medicare beneficiaries scrutiny of their bills.<\/p>\n
Since the programs inception, the program has educated over 6.6 million beneficiaries in group
\nor one-on-one counseling sessions and has reached more than 30 million people through
\ncommunity education outreach events. While SMPs make numerous referrals of potential fraud
\nto investigators, it is still difficult to measure the outcome of these cases without a tracking
\nmechanism. Therefore, we have no specific measure of these outcomes, though we anticipate
\nthat they would demonstrate an additional benefit of the SMP programs ability to detect and
\nprevent fraud and abuse in the Medicare program. In addition, the impact of the SMP programs
\nprimary activitieseducation of beneficiaries to prevent health care fraudis extremely difficult
\nto quantify in dollars and cents. As HHS-OIG indicated in the August 2015 report:
\nACL recognizes the importance of measuring the value of the SMP program impact to the fullest
\ndegree possible. Toward that end, in 2012, ACL contracted for the first-ever SMP program
\nAssessment that assessed the national design and implementation of the SMP program, the
\nadequacy of current SMP performance measures, and sought to determine the most appropriate
\nmeasures of SMP program value (benefits, results and impact). The contract concluded in
\nDecember 2013 and ACL is reviewing the Assessment recommendations for implementation in
\nFY 2015. In addition, in FY 2013, the SMP program issued a three-year research grant designed
\nto measure the value of prevention activities. As the SMP program is focused on education and
\nprevention, the true value of the program comes from beneficiaries avoiding fraud in the first
\nplace. This grant is intended to help the program identify a way to measure that effect.
\nDespite the factors that have limited ACLs ability to quantify the value of the SMP program in
\npreventing, identifying, and reporting health care fraud, HHS-OIG has documented in the annual
\nperformance report over $122 million in savings attributable to the program as a result of
\nbeneficiary complaints since its inception in 1997.
\nSMP Infrastructure and Program Support
\nSMP Resource Center
\nIn FY 2014, the SMP Resource Centers grant was up for competition and a new three-year grant
\nwas awarded. The SMP Resource Center, established October 1, 2003, provides technical
\nHelpance, support and training to the SMP project ( help with nursing paper writing from experts with MSN & DNP degrees)s, ensuring a fully consolidated national
\napproach to reaching Medicare and Medicaid beneficiaries. The goal of the Center is to provide
\nprofessional expertise and technical support, serve as an accessible and responsive central source
\nof information, and maximize the effectiveness of the SMP project ( help with nursing paper writing from experts with MSN & DNP degrees)s in health care integrity
\noutreach and education. The Center has been instrumental in supporting ACL efforts to forge
\nnational visibility for the SMP program.
\n57<\/p>\n
SMP Data System
\nThe SMP program issued a contract in FY 2014 for the development of a new data system
\ndesigned to support the evolving needs of the SMP program. The previous system, SMART
\nFACTS, has been in operation for seven years and is at the end of its functionality. The new
\nsystem will be operational in late FY 2015 and is expected to last at least 10 years.
\nIntegration Project Grants
\nThe goal of the SMP program is to provide education to all Medicare beneficiaries. However,
\nthere are specific populations that are historically hard to reach. Three of these populations
\nMedicare beneficiaries under age 65; Lesbian, Gay, Bisexual and Transgender (LGBT) Medicare
\nbeneficiaries; and American Indian\/Alaska Native (AI\/AN) Medicare beneficiarieswere
\nspecifically identified as target populations. In FY 2013, ACL awarded five grants to
\norganizations that initiated seventeen-month project ( help with nursing paper writing from experts with MSN & DNP degrees)s seeking to increase awareness,
\nempowerment, and actions to prevent health care fraud amongst these generally underserved
\npopulations. The goal of these grants is to develop new, efficient, and sustainable approaches for
\nensuring high-quality and culturally competent service delivery and help educate consumers to
\nprevent health care fraud. This work ended in FY 2015.
\nPrevention Research Grant
\nAs mentioned above in FY 2013, the SMP program issued a three-year research grant to identify a
\nway to measure the overall impact of the SMP program. Specifically, the grantee will develop and
\ntest an Assessment method to determine how to best measure the effects of the SMP programs
\ncommunity education techniques on health care fraud prevention. This work continued in FY 2014.
\nOffice of the General Counsel
\nIn FY 2015, the Office of the General Counsel (OGC) was allocated approximately $10 million
\nin HCFAC funding by HHS to supplement OGCs efforts to support program integrity activities.
\nMany of OGCs efforts in FY 2015 were focused heavily on program integrity review, in which
\nOGC reviews CMS programs and HCFAC activities in order to strengthen them against
\npotential fraud, waste, and abuse. OGC also continued its active litigation role in order to Help
\nin the recovery of program funds. During FY 2015, OGC was involved in a wide range of
\nHCFAC efforts that resulted in Government recoveries of over $2.4 billion in judgments,
\nsettlements, or other types of recoveries, savings, or receivables as described elsewhere in this
\nreport.
\nThe Affordable Care Act
\nThe Affordable Care Act (ACA) significantly amended existing anti-fraud statutes. These
\nprovisions established fundamental expectations for compliance, disclosure, transparency, and
\nquality of care, and are matched by corresponding enforcement provisions. Some specific
\nprovisions of the ACA that particularly support HCFAC priorities include amending Medicare
\nand Medicaid provider\/supplier enrollment requirements, strengthening overpayment provisions
\nto specifically invoke the False Claims Act (FCA), and creating a statutory disclosure protocol
\nfor violations of the physician self-referral prohibition known as the Stark law. During FY
\n2015, as new ACA programs continued to be implemented, OGC spent significant time and
\n58<\/p>\n
resources working with the relevant CMS client components to ensure that program integrity
\nissues were reviewed and resolved, and Helped the client in addressing program integrity and
\ncompliance problems as they occurred.
\nHEAT
\nDuring FY 2015, OGC was involved in Health Care Fraud Prevention and Enforcement Action
\nTeam (HEAT) initiatives and worked closely with other HEAT members to combat fraud, waste,
\nand abuse in the Medicare and Medicaid programs by providing advice on the myriad legal
\nissues presented as the Government works to initiate innovative anti-fraud programs in various
\nhotspots throughout the country. OGC Helped DOJ in pursuing both criminal and civil cases
\ninvolving individuals and entities seeking to defraud the Medicare and Medicaid programs and to
\ndefend any federal court challenges that are brought as a result of HEAT initiatives. OGCs
\ninvolvement in HEAT also included advising CMS on provider and supplier revocations,
\npayment suspensions, recoupments, and defending the administrative appeals that resulted.
\nFCA and Qui Tam Actions
\nOGC supported DOJ in assessing qui tam actions filed under the FCA by interpreting complex
\nMedicare and Medicaid rules and policies to Help DOJ in discerning which allegations were
\nprogram violations and should be pursued, and to help DOJ focus government resources on those
\nmatters which were most likely to result in a recovery of money for the Government. When DOJ
\nfiled or intervened in a FCA matter, OGC provided litigation support, including interviewing and
\npreparing witnesses and responding to often extensive requests for documents and information.
\nOGC also expended considerable resources in responding to requests for information and witness
\ntestimony in declined qui tams that were litigated by relators. In FY 2015, OGC participated in
\nFCA and related matters that recovered over $452 million for the Government. The types of
\nFCA cases that OGC worked collaboratively with DOJ on included: drug pricing manipulation,
\nillegal marketing activity by pharmaceutical manufacturers that resulted in Medicare and
\nMedicaid paying for drugs for indications not covered, physician self-referral violations, and
\nprovider upcoding cases.
\nProvider\/Supplier Suspensions and Enrollment Revocations or Denials
\nSuspensions play a critical role in protecting against the abuse of program funds. OGC advised
\nCMS on whether to suspend payments to Medicare providers and suppliers and defended the
\nsuspensions when challenged through the appeal process. In FY 2015, OGC attorneys were
\ninvolved in a myriad of suspension and recoupment actions, which involved suspected fraudulent
\nbillings by many different segments of the health care industry, including DME suppliers,
\nambulance companies, physicians, infusion clinics, therapists, home health agencies, and
\ndiagnostic testing facilities. OGC also represented CMS when a provider or supplier appealed a
\ndenial of enrollment or revocation. In FY 2015, OGC represented CMS in appeals before the
\nHHS Departmental Appeals Board (DAB) and worked to resolve these cases without formal
\nhearings. Further, OGC continued to advise CMS on the interpretation of enrollment regulations
\nand reviewed proposed enrollment rules and manual changes.
\nMedicare Prescription Drug Program (Part D) & Medicare Advantage (Part C) Compliance
\nDuring FY 2015, OGC continued to provide extensive advice to CMS on a variety of Part D and
\nMedicare Advantage (MA)-related contract compliance issues, including identifying
\nenforcement options against sponsors that are noncompliant or violate program rules, such as the
\n59<\/p>\n
Marketing Guidelines. OGC reviewed compliance-related correspondence that CMS issued to
\nPart D sponsors and MA plans in the form of warning letters, corrective action plan letters,
\nintermediate sanctions, Civil Monetary Penalty (CMP) notices, and non-renewal or termination
\nnotices.
\nCivil Monetary Penalties
\nCMS has the responsibility for administering numerous CMP provisions enacted by Congress to
\ncombat fraud, waste, and abuse by enforcing program compliance and payment integrity. In FY
\n2015, OGC provided legal advice to CMS regarding the development and imposition of CMPs
\nand defended CMS in many administrative appeals and judicial litigation resulting from these
\ncases.
\nPetitions for Remission
\nOGC collaborated with federal law enforcement, including the FBI, U.S. Attorneys Offices, the
\nSecret Service, U.S. Postal Service, and the U.S. Marshals Service in filing petitions for
\nremission directed to recover assets subject either to administrative forfeiture by federal law
\nenforcement or civil judicial forfeiture by DOJ. Each petition set forth the background of the
\nfraudulent scheme, the history of Medicares payments, and how the fraudulently induced
\npayments could be traced to the seized assets. During FY 2015, OGC petitioned these agencies
\nto recover funds in both criminal and civil litigation matters in which Medicare was a victim of
\nfraud.
\nRegulatory Review and Programmatic Advice
\nIn FY 2015, OGC advised CMS on a vast variety of regulatory and program issues, all to Help
\nCMS in strengthening its programs and activities against fraud and to prevent the wrongful
\ndisbursement of program funds in the first instance. Some highlights of OGC efforts include:
\nproviding counsel to the CMS Innovation Center regarding new payment and delivery models
\nto improve the quality of care and reduce costs to the Medicare and Medicaid programs, working
\nwith CMS to implement the agencys second notice related to provider and supplier enrollment
\nmoratoria, and providing counsel on the program integrity issues to CMS to Help in the
\ndevelopment of the Notice of Proposed Rulemaking for the Medicare Shared Savings Program
\npublished on December 8, 2014. Further, OGC worked on a final rule amending CMSs
\nenrollment regulations to establish new authority for CMS to deny or revoke billing privileges
\nfrom individuals and entities that pose a program integrity risk to the Medicare program. Among
\nmany other things, the regulation provides new authority to deny enrollment to individual or
\nentity affiliated with entities that have an existing Medicare debt and new authority to revoke
\nenrollment from providers and suppliers that have a pattern or practice of billing for services that
\ndo not meet Medicare requirements. In addition, OGC routinely works with CMS to review
\nlegislative proposals regarding program integrity matters.
\nMedicaid Program Integrity
\nContinuing recent trends, OGC saw continued increasing involvement in FY 2015 in Medicaid
\nprogram integrity issues as CMS devoted more resources to financial reviews and oversight and
\nas states continued to present innovative proposals to reconfigure their Medicaid programs. For
\nexample, in Detroit-Wayne Mental Health Authority, OGC obtained a fully favorable decision
\nfrom the DAB, sustaining the Division of Cost Allocations denial of the Authoritys request to
\nuse unspent Medicaid funds to reduce its pension obligations, and resulting in an affirmative
\n60
\nrecovery of $4.8 million as the State of Michigan recently refunded the unspent funds to CMS.
\nFurther, OGC Helped CMS with the Indiana Medicaid Programs pilot project ( help with nursing paper writing from experts with MSN & DNP degrees) to recover
\nMedicare overpayments through the offset of the FFP portion of Medicaid payments. To date,
\nthis pilot project ( help with nursing paper writing from experts with MSN & DNP degrees) has recovered nearly $1 million. OGC anticipates providing similar support to
\nCMS with a recently launched initiative with the State of Ohio Medicaid Program that has so far
\nrecovered over $100,000.
\nPhysician Self-Referral
\nOGC provided guidance to CMS and DOJ in navigating the complexities of the Stark physician
\nself-referral law. This consultation helps to build stronger cases and focus investigatory efforts,
\nleading to successful results for the Government. In FY 2015, OGC provided extensive counsel
\nto CMS in its ongoing implementation of the Medicare Physician Self-Referral Disclosure
\nProtocol (SRDP)created under the ACA to enable Medicare providers to self-disclose
\ntechnical violations of the Stark laws physician self-referral prohibition. OGC advised CMS
\nregarding numerous matters disclosed under this protocol, now numbering over 350.
\nMedicare Secondary Payer (MSP) Workload
\nOGCs efforts to recover conditional payments by Medicare that are the primary responsibility of
\nother payers directly supports the HCFAC statutory goal of facilitating the enforcement of all
\napplicable legal remedies for program fraud and abuse. During FY 2015, OGC has been
\nsuccessful in establishing the right to recover over $4.8 million for Medicare under the MSP
\nprogram. Further, statutory changes implementing mandatory insurance reporting requirements
\nto the MSP law have strengthened and expanded OGCs efforts in this areato the benefit of the
\nMedicare Trust Fundsincluding the authority for CMS to impose substantial CMPs for failure
\nto report.
\nBankruptcy Litigation
\nOGC protects Medicare funds from waste in bankruptcy cases by asserting CMS recoupment
\nrights to collect overpayments, arguing to continue suspension or termination actions against
\ndebtors, seeking adequate assurances from the bankruptcy court that CMS interests in the
\ndebtors estate will be protected, arguing for the assumption of the Medicare provider agreement
\nas an executory contract, and petitioning for administrative costs where appropriate. In FY 2015,
\nOGC asserted CMS interests in numerous bankruptcy and receivership actions involving
\nphysicians, hospitals, independent diagnostic test facilities, DME suppliers, nursing homes, and
\nnursing home chains, collecting or establishing the right to collect over $16 million in recoveries
\ninvolving bankrupt providers.
\nDenial of Claims and Payments
\nCMS and its contractors engaged in various activities and initiatives to detect and prevent
\nabusive and fraudulent billing practices. These measures included provider and beneficiary
\neducation, use of claim sampling techniques, and a more rigorous scrutiny of claims with
\nincreased medical review. In FY 2015, OGC played a major role in advising CMS regarding the
\ndevelopment and implementation of these types of program integrity measures and defended
\nCMS in litigation brought by providers and suppliers who challenged these efforts. OGC
\ncontinued to aggressively defend CMS and its contractors in cases seeking damages for the
\nalleged wrongful denial of claims, for being placed on payment suspension, and for not being
\ngranted extended repayment plans.
\n61<\/p>\n
In summary, OGCs FY 2015 work in support of CMS advances the specific goals of the
\nHCFAC program, including program integrity, fraud prevention, and fraud response. Most CMS
\noperations have a fraud\/abuse component, and OGCs work supporting all CMS substantive
\nprogram areas directly supports the HCFAC programs goals of fraud and abuse prevention in
\nthose operational program areas.
\nFood and Drug Administration Pharmaceutical Fraud Program
\nIn FY 2015, $3.4 million in HCFAC funding was made available for the FDA Pharmaceutical
\nFraud Program (PFP). The PFP was instituted to enhance the health care fraud-related
\nactivities of FDA’s Office of Criminal Investigations (OCI) and the Office of the General
\nCounsel (OGC) Food and Drug Division. OCI, with the support of OGC, investigates
\ncriminal violations of the Federal Food, Drug, and Cosmetic Act (FFDCA), the Federal AntiTampering
\nAct, and related Federal statutes.
\nThe PFP is designed to detect, prosecute, and prevent pharmaceutical, biologic, and medical
\ndevice fraud. The PFP gathers information from sources inside and outside FDA and focuses on
\nfraudulent marketing schemes, application fraud, clinical trial fraud, and flagrant manufacturingrelated
\nviolations concerning biologics, drugs, and medical devices. The goal of the program is
\nthe early detection and prosecution of such fraudulent conduct and furthers FDAs public health
\nmission by helping to reduce health care costs, in most cases before they are incurred, and deter
\nfuture violators. By initiating investigations of pharmaceutical fraud schemes earlier in their
\nlifecycle, FDA is able to preclude potential public harm by barring medical products, which
\nhave not followed the legal FDA approval processes and do not meet FDA standards, from
\nmaking it to market, thus saving valuable health care dollars from being spent.
\nThe PFP has identified multiple alleged medical product fraud schemes through various
\navenues. Since the inception of the PFP, OCI has opened a total of one hundred twenty criminal
\ninvestigations. In FY 2015, FDAs fifth full fiscal year of HCFAC Program activity, OCI,
\nthrough its PFP, opened twenty-nine criminal investigations, described below:
\nTwo investigations involving allegations of questionable manufacturing practices of
\nforeign-based drug firms. The investigations are focused on violations related to
\napplication fraud, data integrity, data manipulation, and adulteration.
\nTwo investigations involving allegations of questionable manufacturing practices of an
\ninjectable drug by a domestic firm causing the finished product to be sub-potent. The
\ninvestigation is focused on misbranding and\/or adulteration.
\nThree investigations involving allegations of questionable manufacturing practices of
\nmedical devices ultimately causing public safety risks. The investigations are
\nfocused on misbranding and\/or adulteration.
\nFive investigations involving marketing schemes by medical device and drug
\nmanufacturers. These investigations involve alleged misbranding of devices and drugs
\n62<\/p>\n
by offering them for sale to address conditions for which they are not FDA cleared or
\napproved.
\nSeventeen investigations involving allegations of clinical trial or application
\nfraud. These investigations are focused in part on individuals or companies suspected
\nof improperly commencing and conducting clinical trials, falsifying clinical trial data,
\nforging signatures of clinical investigators, and enrolling ineligible or non-existent
\nsubjects in clinical trials, as well as falsifying approval or clearance applications made
\nto the FDA.
\nIn regard to judicial action, the types of criminal investigations conducted through the PFP tend to
\nbe complex in nature requiring extensive document review and coordination with the affected FDA
\nCenter. It is not unusual for these complex fraud investigations to last five years or more from
\ninitiation to conclusion. For example, in February 2015, one of our PFP investigations opened in
\nFY 2011 concluded with a clinical trial coordinator being sentenced to 36 months in prison, 36
\nmonths of probation, and ordered to pay approximately $200,000 for making false statements in
\na matter within the jurisdiction of the FDA. Specifically, an FDA investigator found evidence to
\nshow a number of study subjects that had been reported as being enrolled in a clinical study of an
\nHIV drug did not actually participate in the study and that all the data regarding their
\nparticipation had been fabricated.
\nAdditionally, in March 2015, the first investigation opened at the inception of our PFP program
\nin mid-FY 2010, concluded with a large prescription and over-the-counter drug manufacturer
\nlocated in the Philadelphia area pleading guilty for introducing adulterated infants and
\nchildrens liquid medications into interstate commerce. The investigation netted a $25,000,000
\nrecovery.
\nFurthermore, FDA believes that various investigations already initiated under the PFP show
\npromise of future judicial action that may include criminal prosecution and monetary
\nrecoveries. These promising cases include several large foreign generic drug manufacturers
\nunder investigation for data integrity and other manufacturing violations which would deem
\ntheir products adulterated and could possibly pose a risk to the publics health and safety.
\nSixty percent of generic drugs in the United States come from foreign manufacturers.
\nIn addition to these investigative activities, FDA conducted a one day training session in early
\nMarch 2015 for criminal investigators covering PFP related topic (sample nursing essay examples by the best nursing assignment writing service)s. The training also provided
\nbackground on FDAs participation in the HCFAC Program and resources available to Help in
\ninvestigations being conducted under the PFP. Due to this training, FDA has seen a measurable
\nincrease in HCFAC Program awareness, interest, and level of skill in conducting the
\ninvestigations.
\n63
\nDEPARTMENT OF JUSTICE
\nUnited States Attorneys
\nIn FY 2015, the United States Attorneys Offices (USAOs) were allocated approximately
\n$51.9 million in HCFAC funding to support civil and criminal health care fraud and abuse
\nlitigation, as exemplified in the Program Accomplishments section. The USAOs dedicated
\nsubstantial district resources to combating health care fraud and abuse in 2015, and HCFAC
\nallocations have supplemented those resources by providing funding for attorneys, paralegals,
\nauditors and investigators, as well as funds for litigation of resource-intensive health care fraud
\ncases. USAOs work with CMS by reviewing and conferring with CMS about their imposing any
\npotential civil monetary penalties against a provider. Additionally, the Attorney General
\nAdvisory Committees (AGAC) Health Care Fraud Working Group has supported and is
\nworking on efforts to reduce the number of home health care fraud cases. The effort to reduce
\nthis type of fraud is in working on proposals to change the home health care documentation, and
\nproviding extended education to providers about their responsibilities to correctly certify service
\nfor these programs and the risks they face for not submitting correct information.
\nThe 93 United States Attorneys and their Helpants, or AUSAs, are the nations principal
\nprosecutors of federal crimes, including health care fraud. Each district has a designated
\nCriminal Health Care Fraud Coordinator and a Civil Health Care Fraud Coordinator. Civil and
\ncriminal health care fraud referrals are often made to USAOs through the law enforcement
\nnetwork described herein, and these cases are usually handled primarily by the USAOs, although
\nthe civil referrals are sometimes handled jointly with the Civil Divisions Commercial Litigation
\nBranch (Fraud Section). The other principal source of referrals of civil cases for USAOs is
\nthrough the filing of qui tam (or whistleblower) complaints. These cases are often handled
\njointly with trial attorneys in the Fraud Section. USAOs also handle most criminal and civil
\nappeals at the Federal appellate level.
\nUSAOs play a major role in health care fraud enforcement by bringing criminal and affirmative
\ncivil cases to recover funds wrongfully taken from the Medicare Trust Funds and other taxpayerfunded
\nhealth care systems as a result of fraud, waste, and abuse. Civil and criminal AUSAs
\nlitigate a wide variety of health care fraud matters, including false billings by physicians and
\nother providers of medical services, overcharges by hospitals, Medicaid fraud, and kickbacks to
\ninduce referrals of Medicare or Medicaid patients, fraud by pharmaceutical and medical device
\ncompanies, home health and hospice fraud, and failure of care allegations against nursing home
\nowners. Working closely with their partners in the Civil Division, several civil health care fraud
\nAUSAs have focused their efforts on pharmaceutical fraud, resulting in significant recoveries.
\nMost notably, health care giant Johnson & Johnson agreed to pay $2.2 billion to resolve criminal
\nand civil liability arising from allegations relating to the prescription drugs Risperdal, Invega and
\nNatrecor, including misbranding related to the promotion for intended uses not approved as safe
\nand effective by the Food and Drug Administration (FDA) and payment of kickbacks to
\nphysicians and to the nations largest long-term care pharmacy provider.
\nOther major pharmaceutical cases included: Endo Health Solutions Inc., which agreed to pay to
\n64<\/p>\n
pay $192.7 million to resolve criminal and civil liability arising from Endos marketing of the
\nprescription drug Lidoderm for intended uses not approved as safe and effective by the FDA,
\nwhich rendered the drug misbranded; and Teva Pharmaceuticals USA Inc., which agreed to pay
\nthe Government and the State of Illinois $27.6 million for allegedly violating the FCA by making
\npayments to induce prescriptions of an anti-psychotic drug for Medicare and Medicaid
\nbeneficiaries. Most of the major civil settlements were part of a global resolution, which also
\naddressed the criminal liabilities, resulting in criminal pleas, as well as significant fines and
\nforfeitures. The criminal portion of these investigations and resolutions was handled by criminal
\nhealth care fraud AUSAs, often working with their counterparts at the Consumer Protection
\nBranch of the Civil Division. These global settlements resolved allegations including reporting
\nof false and inflated drug prices, manufacturing and distributing adulterated drugs, distribution of
\ndrugs for uses not approved by FDA, and kickbacks.
\nThe USAOs also partner with the Criminal Division in the Medicare Fraud Strike Forces
\ncurrently operating in nine areas across the country. Each USAO has dedicated several AUSAs
\nand support personnel to work with Criminal Division attorneys in this important initiative.
\nAdditionally, USAOs in Strike Force and non-Strike Force cities work on other substantial cases
\nwhich result in high monetary recovery or have a substantial impact on the law and the
\ncommunity. Examples of successful cases that were not initiated or concluded in districts as part
\nof a Strike Force team during FY 2015 are detailed earlier in this report.
\nIn addition to the positions funded by HCFAC, the Executive Office for United States Attorneys
\nOffice of Legal Education (OLE) uses HCFAC funds to train AUSAs and other DOJ attorneys,
\nas well as paralegals, investigators, and auditors in the investigation and prosecution of health
\ncare fraud. In April 2015, OLE offered a Health Care Fraud Seminar which was attended by
\nover 85 AUSAs and DOJ trial attorneys. In November 2015, OLE offered training for USAO
\nauditors, investigators, and paralegals which included a focus on health care fraud investigations.
\nMany USAO attorneys, investigators, auditors, and paralegals served as faculty at these OLE
\ntrainings, and also participate in other federal, state, and private health care fraud seminars.
\nCriminal Prosecutions13
\nIn FY 2015, the United States Attorneys Offices (USAO) opened 983 new criminal health care
\nfraud investigations. Helpant United States Attorneys (AUSA) filed criminal charges in 463
\ncases involving 888 defendants. A total of 613 defendants were convicted of health care fraudrelated
\ncrimes during the year.
\nCivil Matters and Cases14
\nIn FY 2015, USAOs opened 808 new civil health care fraud investigations and had 1,048 civil
\nhealth care fraud matters pending at the end of the fiscal year.
\n13 FY 2015 numbers are actual data through the end of September 2015. This data includes records classified either<\/p>\n
with the primary or tertiary 03G Health Care Fraud program code. 14 FY 2015 numbers are actual data through the end of September 2015. This data includes those records classified<\/p>\n
under with the FRHC Health Care Fraud civil code.
\n65
\nCivil Division
\nIn FY 2015, the Civil Division received approximately $31.6 million in FY 2015 HCFAC
\nfunding to support the health care fraud activities of the Commercial Litigation Branchs Fraud
\nSection and the Consumer Protection Branch. This amount also included funding to support the
\nDepartment of Justices Elder Justice Initiative.
\nThe Commercial Litigation Branchs Fraud Section
\nThe Civil Divisions Commercial Litigation Branch (Fraud Section) investigates complex health
\ncare fraud allegations and files suit under the FCA to recover money on behalf of defrauded
\nfederal health care programs including Medicare, Medicaid, TRICARE, and the FEHBP. The
\nFraud Section works closely with the United States Attorneys Offices and often team with the
\nConsumer Protection Branch, HHS-OIG, state Medicaid Fraud Control Units and other law
\nenforcement agencies to pursue allegations of healthcare fraud. As a result of these efforts, the
\nFraud Section has obtained settlements and judgments in health care cases of over $1 billion
\nalmost every year since 2000 and over $1.9 billion in FY 2015 alone.
\nThe Fraud Section investigates and resolves matters against a wide array of health care providers
\nand suppliers. In FY 2015, some of the most significant matters pursued by the Fraud Section
\ninvolved hospitals and physicians. In some of these cases, the hospitals allegedly improperly
\nadmitted patients who could have been treated on a less costly outpatient basis (such as the
\nDignity Health, MCCG, and CHS matters discussed above). Other cases against hospitals and
\nphysicians involved alleged violations of the Stark Law, which prohibits physicians from
\nreferring their patients to other entities for services payable by Medicare when the physician or
\nan immediate family member of the physician has a direct or indirect financial relationship with
\nthe entity (such as the North Broward Hospital District, Robinson Health System, Citizens
\nMedical Center, Columbus Regional, and Adventist Health Care System matters discussed
\nabove). The Fraud Section continues to look closely at these types of arrangements to make sure
\nthat Medicare and Medicaid, as well as the beneficiaries of these programs, are protected from
\nthe distorted medical decision-making that these improper financial deals can cause.
\nThe Fraud Section has been called upon to litigate an increasing number of FCA cases that in the
\npast may have been settled. For example, while it has settled allegations against for profit
\nhospice providers relating to the admission of beneficiaries not eligible for the hospice benefit
\n(such as the Good Shepherd Hospice and Covenant Hospice matters discussed above), the
\nSection has filed complaints and committed significant resources to litigating claims against a
\nnumber of other hospice providers, including Vitas Hospice Services, AseraCare Hospice,
\nCreekside Hospice, and Evercare Hospice and Palliative Care (now known as Optum Palliative
\nCare and Hospice). Similarly, while the Section has settled allegations against nursing homes
\nand healthcare providers relating to medically unnecessary and inappropriate levels of
\nrehabilitation therapy administered to elderly residents (such as the Extendicare Health Services
\nand RehabCare matters discussed above), it has filed complaints against other providers,
\nincluding Life Care Centers of America, Inc. and HCR Manorcare.
\n66
\nMatters involving pharmaceutical and device manufacturers were historically some of the most
\ncomplex and resource intensive cases handled by the Fraud Section, and the Sections historic
\nrecoveries in these areas have had a significant deterrent effect on industry. The Section
\ncontinues to investigate allegations that drug and device manufacturers caused the submission of
\nfalse claims to federal healthcare programs by promoting drugs for uses not approved by the
\nFDA and not covered by federal health care programs (as alleged in the Inspire Pharmaceuticals
\nmatter discussed above), by distributing unapproved and non-reimbursable medical devices (as
\nalleged in the OtisMed and NuVasive matters discussed above), and by paying kickbacks to
\nhealthcare providers to recommend or prescribe particular products (as alleged in the Daiichi
\nSankyo and Medco Health\/AstraZeneca matters discussed above).
\nBecause the Fraud Section receives every FCA complaint filed across the country by
\nwhistleblowers (otherwise known as relators), it has a unique vantage point over health care
\nfraud trends and developments nationwide and therefore regularly handles some of the most
\ncomplex matters and takes the lead on coordinating national investigations with its law
\nenforcement partners. Likewise, given the diversity of health care fraud cases pursued by the
\nFraud Section, it frequently provides training and guidance to AUSAs and agents on the FCA
\nand health care fraud issues. The Section works closely with HHS-OIG, Office of General
\nCounsel, in all settlements of health care fraud allegations in order to ensure that the
\nadministrative remedies possessed by HHS are appropriately considered and to enable the
\nnegotiation of compliance terms that diminish the risk that the offending conduct will be
\nrepeated. The Section also collaborates with and counsels CMS and HHS-OIG on interagency
\ninitiatives and proposed rules and regulations.
\nThe Elder Justice Initiative, which is housed in the Civil Division, coordinates and supports law
\nenforcement efforts to combat elder abuse, neglect, and financial exploitation. The Initiative
\nsupports law enforcement efforts by maintaining an information bank of Elder Justice related
\nmaterials (including briefs, opinions, indictments, plea agreements, subpoena templates); funding
\nmedical reviewers, auditors, and other consultants to Help DOJ attorneys and AUSAs in their
\nnursing home and\/or long term care facility cases; hosting quarterly teleconferences with DOJ
\nattorneys and AUSAs across the country to discuss issues or developments in connection with
\nour nursing home and failure of care cases; and coordinating nationwide investigations of skilled
\nnursing facilities. In addition to supporting law enforcement efforts, the Initiative continues to
\nfund research project ( help with nursing paper writing from experts with MSN & DNP degrees)s awarded by the Office of Justice Programs, National Institute of Justice, to
\nstudy the abuse, neglect, and exploitation of elderly individuals and residents of residential care
\nfacilities. Elder Justice Initiative members represent the Justice Department on Interagency
\nWorking Groups such as the Elder Justice Coordinating Councils Working Group. The Civil
\nDivision maintains the Elder Justice Website (www.justice.gov\/elderjustice), a valuable resource
\nfor elder abuse victims and their families, state and local prosecutors, elder abuse researchers, as
\nwell as practitioners.
\nThe Consumer Protection Branch
\nThe Consumer Protection Branch (CPB) litigates consumer fraud actions to end dangerous
\npractices that harm Americas most vulnerable populations, like the sick and elderly. Among its
\ntop priorities are pursuing cases against those who market unsafe or fraudulent products and
\nservices that endanger the health and safety of patients. CPB works closely with United States
\n67<\/p>\n
Attorneys Offices, the Commercial Litigation Branchs Fraud Section, the Food and Drug
\nAdministration (FDA), and other law enforcement partners on a wide range of health care fraud
\ncases, including those involving the promotion and distribution of unapproved and adulterated
\ndrugs and medical devices. CPB has made significant headway in fighting fraud schemes that
\nendanger the public health, having successfully prosecuted dozens of cases resulting in
\nsignificant jail terms, fines, and forfeitures. This litigation serves to deter companies and
\nindividuals from marketing and selling unsafe pharmaceuticals and medical products to the
\nAmerican public.
\nIn partnership with key agencies, in FY 2015, CPB prosecuted medical device maker OtisMed
\nCorporation and its former president and CEO for distributing an unapproved medical device
\nused in knee replacement surgery. OtisMed marketed the OtisKnee cutting guide as a tool to
\nHelp surgeons in making accurate bone cuts during knee replacement surgery. After FDA
\nnotified OtisMed and its CEO that the OtisKnee had failed to demonstrate that it was as safe and
\neffective as other legally marketed devices and therefore that distribution of the device was
\nprohibited, the CEO ordered the shipment of approximately 218 devices to surgeons
\nnationwide. The corporation pled guilty to violating the Federal Food, Drug, and Cosmetic Act
\nand paid a criminal fine and forfeiture totaling $39.6 million. It also entered into a civil
\nsettlement with the federal government and the states of more than $40 million. The CEO was
\nsentenced to 24 months in prison followed by one year of supervised release, and ordered to pay
\na $75,000 fine.
\nIn another medical device matter, CPB, in collaboration with the U.S. Attorneys Office for the
\nMiddle District of Florida, entered into a deferred prosecution agreement with Genzyme
\nCorporation, a wholly-owned biotechnology subsidiary of French pharmaceutical company
\nSanofi, to resolve criminal charges that it violated the Federal Food, Drug, and Cosmetic Act
\nwith regard to Seprafilm, a surgical device it markets and promotes. A two-count criminal
\ninformation charged that, between 2005 and 2010, Genzyme caused Seprafilm to become
\nadulterated and misbranded while held for sale. For instance, some Genzyme sales
\nrepresentatives taught surgeons how to mix Seprafilm sheets into a slurry that could be squirted
\nthrough the narrow tubes used during laparoscopic surgery, even though Seprafilm was never
\nFDA-approved for use in such procedures. In addition, during the course of the governments
\ninvestigation, Genzyme voluntarily disclosed that it had distributed promotional material that
\nimplied that Seprafilm had been proven safe and effective for use in gynecologic cancer
\nsurgeries, even though Seprafilms FDA-approved label cautioned against such use. Genzyme
\npaid a monetary penalty of more than $32 million and agreed to undertake several measures to
\nenhance its internal compliance program. In 2013, the government entered into a separate
\n$22.3 million civil agreement to resolve allegations under the False Claims Act related to
\nSeprafilm.
\nCPB has also increased its attention to dietary supplement manufacturers that sell misbranded
\nand adulterated products, which pose a danger to the public and scam consumers out of money
\nfor misrepresented products. For example, last fiscal year, CPB along with the FDA, and the
\nU.S. Attorneys Office in New Jersey, teamed together to prosecute the owner and president of
\nthe dietary supplement company, Raw Deal Inc. The president instructed employees to add
\nfillers like maltodextrin, rice flour, and cocoa replacer to dietary ingredients in supplements sold
\n68
\nto customers. The company president was sentenced to prison and ordered to forfeit $1 million
\nin profits from his fraudulent scheme.
\nCPB brought actions in FY 2015 to ensure the safety and integrity of the nations drug supply.
\nMcNeil-PPC, Inc., a wholly-owned subsidiary of Johnson & Johnson, pled guilty in U.S. District
\nCourt for the Eastern District of Pennsylvania to delivering for introduction into interstate
\ncommerce adulterated infants and childrens over-the-counter (OTC) liquid medicines from in
\nor around May 2009 to in or around April 2010. The drugs were adulterated because McNeil did
\nnot manufacture them in compliance with current Good Manufacturing Practices (cGMP), which
\nis required under the Federal Food, Drug, and Cosmetic Act. Among other things, McNeil
\nreceived a consumer complaint regarding black specks in its Childrens Tylenol (later
\nidentified as nickel\/chromium-rich inclusions, which were not intended ingredients in the OTC
\nliquid drug). In addition to this consumer complaint, McNeil discovered other OTC batches with
\nparticulates. However, McNeil did not initiate or complete a Corrective Action Preventive
\nAction plan as required by its standard operating procedures. Consequently, McNeil was not in
\ncompliance with cGMP regarding the manufacturing of certain OTC liquid drugs. As part of the
\nplea, McNeil agreed to pay a $20 million fine and forfeit $5 million in substitute assets.
\nCPB also made inroads in the area of drug diversion, successfully prosecuting multiple
\nindividuals engaged in a massive drug diversion scheme involving more than $390 million worth
\nof prescription drugs. In FY 2015, these individuals were charged with conspiracy and related
\noffenses as part of this scheme relating to sale of prescription drugs from illegal, unlicensed
\nsources to wholesalers and pharmacies throughout the United States. To hide the true, illegal
\nsources of their prescription drugs, the defendants falsified pedigree documents required by law
\nthat show the source of drugs. In FY 2015, five defendants pled guilty to crimes relating to their
\npart in the scheme.
\nCriminal Division
\nIn FY 2015, the Criminal Division was allocated $14.7 million in FY 2015 HCFAC funding to
\nsupport criminal health care fraud litigation and interagency coordination, which is carried out
\nprimarily by the Fraud Section and, to a lesser extent, the Organized Crime and Gang Section.
\nThe Fraud Section
\nThe Fraud Section initiates and coordinates complex health care fraud prosecutions and supports
\nthe USAOs with legal and investigative guidance and training and trial attorneys to prosecute
\nhealth care fraud cases. Beginning in March 2007, the Fraud Section, working with the local
\nUSAOs, the FBI and law enforcement partners in HHS-OIG, and state and local law enforcement
\nagencies, launched the Medicare Fraud Strike Force in Miami-Dade County, Florida, to
\nprosecute individuals and entities that do not provide legitimate health care services but exist
\nsolely for the purpose of defrauding Medicare and other government health care programs.
\nSince 2007, DOJ and HHS have expanded the Strike Force to nine regions. In FY 2015, the
\nFraud Section continued to provide attorney staffing, litigation support, and leadership and
\nmanagement oversight for numerous Strike Force prosecutions in eight of the nine regions. The
\nFraud Sections key litigation accomplishments in FY 2015 can be summarized as follows:
\n69
\nFiled 200 indictments, informations and complaints involving charges filed against
\n391 defendants who allegedly collectively billed the Medicare program approximately
\n$1.4 billion;
\nObtained 314 guilty pleas and litigated 28 jury trials, with guilty verdicts against
\n48 defendants; and<\/p>\n
Secured imprisonment for 263 defendants sentenced during the fiscal year, averaging
\nmore than 56 months of incarceration.
\nThe Fraud Section attorneys staffed and coordinated the Divisions health care fraud litigation
\nthrough the existing Medicare Fraud Strike Force teams in Miami, Los Angeles, Detroit,
\nSouthern Texas, Brooklyn, Southern Louisiana, Tampa, Dallas, and Chicago.
\nIn FY 2015, the Criminal Division organized the largest national health care fraud takedown in
\nhistory, both in terms of individuals charged and the loss amount. On June 18, 2015, Attorney
\nGeneral Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary
\nSylvia Mathews Burwell announced a nationwide sweep led by the Medicare Fraud Strike Force
\nin 17 U.S. Attorneys Offices, resulting in charges against 243 individuals, including 46 doctors,
\nnurses and other licensed medical professionals, for their alleged participation in Medicare fraud
\nschemes involving approximately $712 million in false billings. In addition, the Centers for
\nMedicare & Medicaid Services (CMS) also suspended a number of providers using its
\nsuspension authority as provided in the Affordable Care Act.
\nIn addition to Medicare Fraud Strike Force cases, the Fraud Section handles corporate criminal
\nhealth care fraud investigations. Often, such cases are handled in a parallel manner by the Fraud
\nSections prosecutors along with DOJ Civil Division attorneys and\/or AUSAs from USAOs
\nacross the country. In FY 2015, the Criminal Division opened several new corporate health care
\nfraud matters and had over a dozen active investigations into large, nationwide medical
\nproviders.
\nIn addition to health care fraud litigation, the Fraud Section also provided legal guidance to FBI
\nand HHS-OIG agents, health program agency staff, AUSAs, and other Criminal Division
\nattorneys on criminal, civil, and administrative tools to combat health care fraud. Throughout
\nFY 2015, the Fraud Sections prosecutors met with federal prosecutors and agents across the
\nUnited States to provide training, investigative leads based on data analysis, and related support.
\nThe Fraud Section also provided advice and written materials on patient medical record
\nconfidentiality and disclosure issues, and coordinated referrals of possible criminal HIPAA
\nprivacy violations from the HHS Office for Civil Rights; monitored and coordinated DOJ
\nresponses to legislative proposals, major regulatory initiatives, and enforcement policy matters;
\nreviewed and commented on health care provider requests to the HHS-OIG for advisory
\nopinions, and consulted with the HHS-OIG on draft advisory opinions; worked with CMS to
\nimprove Medicare contractors fraud detection, referrals to law enforcement for investigation, and
\ncase development work; and prepared and distributed to all USAOs and FBI field offices
\nperiodic summaries of recent and significant health care fraud cases. Finally, the Fraud Section
\n70
\nalso held a National Health Care Fraud Training Conference in September 2015 that was
\nattended by 280 criminal and civil prosecutors (representing over 50 U.S. Attorneys Offices)
\nand law enforcement personnel.
\nThe Organized Crime and Gang Section (OCGS)
\nThe Criminal Divisions Organized Crime and Gang Section (OCGS) supports and conducts
\ninvestigations and prosecutions of fraud and abuse targeting private sector health plans as well as
\nhealth care fraud and abuse perpetrated by domestic and international organized crime groups.
\nWith respect to private sector health care fraud, OCGS supports and conducts enforcement
\nefforts combatting fraud and abuse directed at the 2.5 million private sector health plans
\nsponsored by employers and\/or labor organizations which cover some 137 million Americans.
\nOCGS also works to improve strategic coordination in the identification and prosecution of
\ndomestic and international organized crime groups engaged in sophisticated frauds posing a
\nthreat to the health care industry.
\nIn FY 2015, six OCGS attorneys were assigned to health care fraud prosecutions and
\ninvestigations. Two OCGS attorneys worked with the Organized Crime Strike Force in the
\nPhiladelphia United States Attorneys Office on prosecutions involving Medicare fraud in the
\noperation of a hospice. A third OCGS attorney conducted the prosecution of an employer in the
\nDistrict of Maryland who created false documents to conceal the companys underpayment of
\nrequired contributions for employee benefits. Additional OCGS attorneys were engaged in
\nhealth care fraud investigations involving fraudulent billings by an ambulance service provider,
\nembezzlement and fraud targeting large collectively bargained health plans, fraud in the
\noperation of a pharmacy, and theft of personally protected health care information from a health
\nclinic.
\nThe Philadelphia case involved the prosecution of a registered nurse in connection with a scheme
\nto defraud Medicare in the operation of a hospice. The nurse, who served as the Director of
\nProfessional Services and supervised the nursing staff at the hospice, is alleged to have
\nauthorized the submission of more than $9.5 million in fraudulent medical claims for hospice
\nservices provided to patients who did not receive services or were ineligible for the benefits
\nclaimed. The hospice founder, a co-owner, the medical director, and four staff nurses have
\npreviously been convicted and sentenced in connection with this false billing scheme. The
\nmassive fraud was alleged to be successful due to participation by nurses and other staff in the
\naltering of patient records to make patients appear eligible for hospice services when, in reality,
\nthey were not. Trial for the remaining defendant is scheduled for FY 2016.
\nThe District of Maryland prosecution involved the victimization of a union health care plan by
\nan employer who underpaid contributions to the plan which were required by a collective
\nbargaining agreement and concealed the underpayment in plan records and reports for three
\nyears. In October 2014, the company owner was sentenced to probation and ordered to make
\nrestitution for making false statements in documents required by the Employee Retirement
\nIncome Security Act.
\n71<\/p>\n
In addition to conducting health care fraud investigations and prosecutions, OCGS attorneys
\nroutinely provide litigation support and advice to AUSAs and criminal investigative agencies in
\nthe investigation and prosecution of corruption and abuse of private employment-based group
\nhealth plans covered by the Employee Retirement Income Security Act (ERISA). Litigation
\nsupport is provided as requested at any stage of the prosecution from indictment through trial and
\non appeal. Private sector employment-based group health plans are the leading source of health
\ncare coverage for individuals not covered by Medicare or Medicaid. OCGS attorneys also
\nprovide support to investigations and prosecutions of fraud schemes by corrupt entities that sell
\nunlicensed health insurance products as well as fraud schemes by corrupt employers that cheat
\nworkers out of health benefits required by the prevailing wage laws and regulations.
\nOCGS attorneys regularly provide health care fraud and abuse training and legal guidance to
\nAUSAs and to criminal investigators and agents of the Department of Labors Employee
\nBenefits Security Administration and Office of Inspector General. Such training and guidance
\ncovers prosecutions involving abuse of private sector employee health plans subject to ERISA
\nand health plans sponsored by labor organizations as well as fraud and abuse committed in
\nconnection with the operation of multiple employer welfare arrangements. OCGS is also
\nresponsible for drafting and reviewing criminal legislative proposals affecting employee health
\nbenefit plans. Finally, OCGS provides legal guidance to prosecutors and required approvals in
\nthe use of the Racketeer Influenced and Corrupt Organizations (RICO) statute in prosecutions of
\nMedicare and Medicaid frauds as well as private sector health care frauds.
\nCivil Rights Division
\nIn FY 2015 the Civil Rights Division was allocated approximately $7.8 million in FY 2015
\nHCFAC funding to support Civil Rights Division litigation activities related to health care fraud
\nand abuse. The Civil Rights Division pursues relief affecting public, residential and
\nnonresidential health care facilities and service systems, as well as conducts investigations to
\neliminate abuse and grossly substandard care in public, Medicare and Medicaid funded longterm
\ncare facilities. Consistent with the Supreme Courts decision in Olmstead v. L.C., 527 U.S.
\n581 (1999), the Division has also undertaken initiatives to eliminate the needless
\ninstitutionalization of individuals who require health care supports and services.
\nThe Division plays a critical role in the HCFAC Program. The Special Litigation Section of the
\nCivil Rights Division is the sole DOJ component responsible for the Civil Rights of Institutionalized
\nPersons Act, 42 U.S.C.1997 (CRIPA). CRIPA authorizes the investigation of conditions
\nof confinement at state and local residential institutions (including facilities for persons with
\ndevelopmental disabilities or mental illness, and nursing homes) and initiation of civil action for
\ninjunctive relief to remedy a pattern or practice of violations of the Constitution or Federal
\nstatutory rights. The program includes review of conditions in facilities for persons who have
\nmental illness, facilities for persons with developmental disabilities, and nursing homes.
\nThe Disability Rights Section of the Civil Rights Division has primary enforcement authority
\nfor the Americans with Disabilities Act (ADA). Title II of the ADA authorizes investigation of
\nallegations of discrimination by public entities against individuals with disabilities, including
\n72
\ndiscrimination in the form of needless institutionalization of persons who require health care
\nsupports and services. See Olmstead, 527 U.S. 581. Title II also authorizes the initiation of
\ncivil action to remedy discrimination in violation of the ADA. In addition to violating the civil
\nrights of individuals with disabilities, such unnecessary institutionalization often results in
\nunnecessarily increased Medicaid costs inconsistent with the Medicaid requirements for home
\nand community-based services. Both the Special Litigation Section and the Disability Rights
\nSection have undertaken initiatives to combat the use of Medicaid funding for the unjustified
\ninstitutionalization of persons with disabilities.
\nThe Educational Opportunities Section of the Civil Rights Division also participates in the
\nHCFAC Program to address the use of Medicaid funding for unnecessary institutionalization of
\nyouth with disabilities in segregated education placements in violation of the ADA.
\nThe Special Litigation, Educational Opportunities, and Disability Rights Sections work
\ncollaboratively with the USAOs and with HHS.
\nFiscal Year 2015 Accomplishments
\nKey litigation and enforcement accomplishments in FY 2015 by the Civil Rights Division can be
\nsummarized as follows:
\nNumber of matters in active enforcement: 19;
\nCumulative estimate of individuals with disabilities affected: 33,322; and
\nNumber of institutional facilities affected: 2,172.
\nSpecial Litigation Section
\nIn Fiscal Year 2015, the Special Litigation Section resolved two major systemic reform cases
\nafter the jurisdictions complied with settlement agreements; issued findings that a state
\nunnecessarily institutionalizes children with mental illness; opened one statewide investigation
\nregarding the unnecessary institutionalization of people with mental health disabilities in nursing
\nfacilities; monitored compliance of 10 statewide settlement agreements and four facility-focused
\nagreements impacting thousands of people; monitored an agreement with an urban police
\ndepartment requiring them to connect individuals with mental illness to community-based
\nservices instead of costly institutional services and to avoid unnecessary criminal justice
\ninvolvement; and filed one statement of interest in litigation regarding a Protection and
\nAdvocacy organizations ability to access investigatory records needed to ensure individuals at a
\nhealth care facility were not subjected to abuse and neglect. In FY 2015, the Sections work
\nincluding its formal investigations, monitoring of remedial agreements, and active litigation
\naffected more than 1,700 health care facilities in 17 states as well as the District of Columbia.
\nThe large number of health care facilities reflects the Sections expanded focus on whether states
\nare ensuring that nursing facilities and other institutional settings do not inappropriately admit
\npersons who should be served in more integrated settings.
\nAn important aspect of the Divisions work is the active enforcement of its agreements (i.e.,
\nongoing monitoring to ensure agreements are successfully implemented and pursuit of remedial
\nmeasures where expected compliance is not occurring). Because of these agreements scope and
\n73<\/p>\n
complexity, this work typically spans several years. In FY 2015, the Special Litigation Section
\nbrought to a successful close two such agreements after years-long enforcement efforts. In
\nNebraska, the Section concluded a seven-year enforcement effort to improve conditions at the
\nStates largest institution for people with intellectual and developmental disabilities, the Beatrice
\nState Developmental Center, and enact system reforms to improve community services
\nthroughout the state. The court-ordered agreement required the State to remedy health, safety,
\nand welfare issues at the institution, and more importantly, required the State to significantly
\nexpand and enhance community capacity and to establish robust quality assurance mechanisms
\nin the community. It impacted the lives of hundreds of people who have received services at the
\ninstitution and thousands of people who benefited from the system-wide reforms called for by
\nthe settlement. In Connecticut, the Section concluded a six-year enforcement effort to improve
\nconditions at the Connecticut Valley Hospital. The agreement there required the State to remedy
\nhealth, safety, and welfare issues for people with mental health disabilities at the institution,
\nimprove treatment and planning, and more appropriately consider community-based services for
\npeople residing at the facility.
\nThe Section continued monitoring implementation of large-scale, systemic reform agreements in
\nnumerous jurisdictions across the country. These ongoing enforcement efforts include:
\nA statewide agreement in Amanda D. v. Hassan \/ United States v. New Hampshire
\n(D.N.H. 2012) requiring the creation of robust community alternativesincluding highintensity
\nservices for at least 1,500 people, integrated housing for hundreds of people,
\nand employment supports for hundreds of peoplethat will reduce the risk that people
\nneeding only community-based services will be psychiatrically hospitalized
\nunnecessarily;
\nAn agreement with the City of Portland in United States v. City of Portland (D. Or.
\n2012) requiring the Portland Police Department to train officers in mental health crisis
\nintervention and connect individuals with mental illness to community-based mental
\nhealth services to avoid unnecessary criminal justice involvement and
\ninstitutionalization;
\nA statewide settlement agreement in United States v. Virginia (E.D. Va. 2012) requiring
\nthe development of approximately 4,200 home and community-based waivers for people
\nwith intellectual and developmental disabilities who are on waitlists for community
\nservices and individuals transitioning from four State-run institutions;
\nA statewide agreement in United States v. Delaware (D. Del. 2011) requiring the
\ndevelopment of comprehensive community mental health supportsincluding highintensity
\nservices for more than 1,000 people, integrated housing for 650 people, and
\nemployment supports for 1,100 peoplefor people with mental health disabilities in, or
\nat risk of being placed in, the Delaware Psychiatric Center; and
\nA statewide agreement in United States v. Georgia (N.D. Ga. 2010) requiring the
\ndevelopment of community resources to serve thousands of people with serious mental
\nillness or intellectual disabilities who reside in Georgias State Hospitals or are at risk of
\nbeing institutionalized there.
\n74
\nIn FY 2015, the Section also issued findings in its investigation into West Virginias childrens
\nmental health system. The United States concluded that West Virginia fails to serve children
\nwith mental health conditions in the most integrated setting appropriate to their needs in violation
\nof the Americans with Disabilities Act (ADA) and Olmstead v. L.C. More than 1,000 children in
\nthe state reside in segregated, expensive residential facilities, often for long periods unrelated to
\ntheir disability, because of a lack of less expensive, community-based service options.
\nNegotiations began this fiscal year to resolve these issues in a comprehensive agreement.
\nAlso in FY 2015, the Section opened an investigation into Louisianas use of nursing facilities to
\nserve people with mental illness and continued its investigation into South Dakotas use of
\nnursing facilities to serve older adults and people with disabilities.
\nThe Section filed one statement of interest in Idaho regarding a Protection and Advocacy
\norganizations ability to access investigatory records needed to ensure individuals at a health care
\nfacility were not subjected to abuse and neglect.
\nDisability Rights Section
\nIn FY 2015, the Disability Rights Section resolved one major, statewide litigation; continued to
\nactively litigate another systemic, statewide case; monitored compliance of three statewide
\nsettlement agreements, under which more than 15,700 people collectively will obtain relief; and
\nfiled two statements of interest in litigation raising issues of needless segregation.
\nThe Section entered into a proposed statewide settlement agreement with the State of Oregon in
\nLane v. Brown (D. Or.), a class action in which the United States intervened and which addresses
\nthe unnecessary segregation of individuals with disabilities in sheltered workshop and facilitybased
\nday programs in violation of Title II of the ADA. Under the agreement, the State has
\npledged a sustained commitment to transform its service system, impacting approximately 7,000
\npeople. The State will provide supported employment services so that 1,115 working-age
\nindividuals will obtain competitive, integrated employment. The State will also reduce the
\nnumber of individuals receiving services in segregated settings, and will ensure that at least
\n4,900 youth ages 14 to 24 are provided the employment services necessary for them to prepare
\nfor, choose, and maintain integrated employment.
\nThe Section continued to litigate United States v. Florida (S.D. Fla. 2013), a case in which the
\nUnited States alleges, among other things, that the State of Florida administers its Medicaid
\nservice system for children with significant medical needs in violation of the ADA and Olmstead
\nby unnecessarily segregating them in nursing facilities, when they could, and want to, be served
\nat home or in other community-based settings.
\nThe Section also continued to monitor the implementation of its eight-year settlement agreement
\nwith the State of North Carolina, pursuant to which the State is providing opportunities to
\nindividuals with mental illness in adult care homes to transition to less costly, integrated service
\nsettings. To date, more than 400 individuals have moved from institutions to community-based
\nsettings, and more than 4,000 people receive community-based mental health services.
\n75<\/p>\n
It also continued to monitor its settlement agreements with the State of Rhode Island and the City
\nof Providence, addressing the unnecessary segregation of individuals with disabilities in
\nsheltered workshop and facility-based day programs. Under the agreements, the State will
\nprovide supported employment placements to roughly 2,000 individuals with intellectual and
\ndevelopmental disabilities.
\nThe Section also monitored its settlement agreement with the State of New York and private
\nplaintiffs regarding New Yorks mental health service system, in United States v. New York
\n(E.D.N.Y. 2013). The agreement benefits at least 2,500 people and remedies discrimination by
\nthe State in the administration of its mental health service system and ensures that individuals
\nwith mental illness who reside in 23 large adult homes in New York City receive services in the
\nmost integrated setting appropriate to their needs consistent with the ADA and Olmstead. Under
\nthe agreement, such individuals will have the opportunity to live and receive services in the
\ncommunity such that they are able to live, work, and participate fully in community life.
\nThe Section filed two statements of interest in litigation raising issues of needless segregation in
\nFlorida and Indiana. These briefs have addressed issues relating to the unnecessary
\ninstitutionalization of individuals in state-run and private institutions.
\nEducational Opportunities Section
\nThe Educational Opportunities Section (EOS) has participated in the HCFAC Program for the
\npast two years. The Section has carefully analyzed the legal issues related to unnecessary
\nsegregation in the context of K-12 schools.
\nIn FY 2015, the Section completed its investigation of the Georgia Network of Educational and
\nTherapeutic Services (GNETS) program, which provides segregated educational services for
\napproximately 5,000 Georgia students with emotional and behavioral disabilities. On July 15,
\n2015, the Division issued a letter of findings to the State identifying the ways in which the State
\nunnecessarily segregates children with disabilities in its operation and administration of the
\nprogram. GNETS is funded and operated by the State and provides services to most of the
\nstudents in the program in segregated GNETS Centers throughout the State rather than providing
\ncommunity-based behavioral health services for these children.
\nThe Section filed five statements of interest or amicus briefs in litigation raising issues of
\nneedless segregation of children in Pennsylvania, Mississippi, and the U.S. Court of Appeals for
\nthe Third and Eleventh Circuits. These briefs have addressed issues relating to the unnecessary
\ninstitutionalization of children in state-run and private, state-funded institutions.
\n76
\nAPPENDIX
\nFederal Bureau of Investigation
\nIn FY 2015, the FBI was allocated $129.2 million in funding from HIPAA to support the
\nfacilitation, coordination and accomplishment of the goals of the HCFAC Program. This yearly
\nappropriation was used to support 797 positions (476 Agent, 321 Support).
\nIn FY 2015, the FBI initiated 642 new Health Care Fraud (HCF) investigations and had 2,744
\npending investigations. Investigative efforts produced 718 criminal HCF convictions and 1,038
\nindictments and informations. In addition, investigative efforts resulted in over 625 operational
\ndisruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of
\nmore than 144 HCF criminal enterprises.
\nThe FBI is the primary investigative agency involved in the fight against HCF that has
\njurisdiction over both federal and private insurance programs. HCF investigations are
\nconsidered a high priority within the FBIs Complex Financial Crime Program. Each of the 56
\nFBI field offices had personnel assigned specifically to investigate HCF matters.
\nThe FBI seeks to approach the HCF crime problem in a threat-based and intelligence-driven
\nmanner. The approach employs the prioritization of enforcement efforts, at both the national and
\nfield office levels, to ensure limited resources are focused on the most significant entities
\ncommitting health care fraud and abuse. As part of the process, the FBI gathers relevant data
\nand information to understand the impact of the crime problem and to identify intelligence
\ngaps, or areas which require additional research and analysis. The need and availability of
\nresources to support mitigation efforts, including enforcement and intelligence related activities,
\nare also factored into the analysis. The process is constantly on-going and requires collaboration
\nnot only between FBI components, but also with our public and private partners.
\nAs part of our collaboration efforts, the FBI maintains investigative and intelligence sharing
\npartnerships with government agencies such as other DOJ components, HHS-OIG, state
\nMedicaid Fraud Control Units, and other enforcement and regulatory agencies. On the private
\nside, the FBI conducts significant information sharing and coordination efforts with private
\ninsurance partners, such as the National Health Care Anti-Fraud Association, the National
\nInsurance Crime Bureau, and private insurance investigative units. The FBI is also actively
\ninvolved in the Healthcare Fraud Prevention Partnership, an effort to exchange facts and
\ninformation between the public and private sectors in order to reduce the prevalence of HCF.
\nAs a result of the collaboration and review process, the FBI has designated criminal enterprises
\nand other crime groups, corporate-level fraud and abuse, and public safety issues as the priority
\nHCF threat areas of focus. Each field office conducts a similar analysis to determine their areas
\nof focus and the actions they will take to mitigate the associated threat.
\nFBI field offices throughout the U.S. proactively address the HCF threat through joint
\ninvestigative efforts; intelligence collection, sharing, and analysis; and the utilization of
\nadvanced and sophisticated investigative techniques. Each FBI field office is involved in a HCF
\n77
\nTask Force and\/or working group. Members of the groups include US Attorneys Office and
\nHHS-OIG personnel, and in many cases also include other federal, state, local, and private
\ninsurance personnel. Based on information sharing and coordination, additional cases are vetted
\nand identified for investigation. These activities seek to identify and pursue investigations
\nagainst the most egregious offenders involved in health care fraud and abuse.
\nThe FBIs Health Care Fraud Unit (HCFU) oversees program efforts, including providing
\nguidance to field offices, to ensure the threat is mitigated in an effective and efficient manner. In
\nsupport of joint agency activities and general threat mitigation efforts the HCFU has
\npromulgated three initiatives, including the Health Care Fraud Prevention and Enforcement
\nAction Team (HEAT), Large Scale Conspiracies, and Major Provider Fraud Initiatives.
\nHEAT is DOJs and HHS Cabinet-level commitment to prevent and prosecute HCF. HEAT,
\nwhich is jointly led by the Deputy Attorney General and HHS Deputy Secretary, is comprised of
\ntop level law enforcement agents, prosecutors, attorneys, auditors, evaluators, and other staff
\nfrom DOJ and HHS and their operating divisions, and is dedicated to joint efforts across
\ngovernment to both prevent fraud and enforce current anti-fraud laws around the country. The
\nMedicare Fraud Strike Force (Strike Force) teams are a key component of HEAT. As part of the
\nHEAT Initiative, the FBI coordinates with the DOJ and HHS-OIG on all HEAT aspects
\nincluding funding, resource allocation, Strike Force expansion, target identification, training, and
\noperations. The FBI has 62 agents assigned to the nine Strike Forces in Miami, New York City,
\nSouthern Texas, Tampa, Detroit, Los Angeles, Southern Louisiana, Dallas, and Chicago. In
\naddition to funding agent resources, the FBI funded undercover operation expenses, financial and
\ninvestigative analysis support, offsite and evidence storage locations, and other investigative
\ncosts. The Strike Forces have effectively investigated and prosecuted individuals and entities
\nthat do not provide legitimate health care services, but exist solely for the purpose of defrauding
\nMedicare and other federal health care programs. The continued support of Medicare Strike
\nForce operations is a top priority for the FBI. In addition, the FBI completes coordination and
\nintelligence sharing with HHS and DOJ components on other prevention and enforcement
\nactivities, including efforts associated with the Large Scale Conspiracies and Major Provider
\nFraud Initiatives.
\nThe Large Scale Conspiracies Initiative seeks to identify and target criminal enterprises and
\nother groups whose schemes result in significant losses to health care benefit programs.
\nIntelligence efforts for this initiative include information sharing and analysis of billing data with
\nHCF enforcement partners. As the FBI continued to focus efforts on these groups, statistical
\naccomplishments associated with the operational disruptions of criminal fraud organizations and
\nthe dismantlement of the criminal hierarchy of criminal enterprises have consistently increased,
\nwith an over fifty percent increase from FY 2012 to FY 2015. Investigative Helpance provided
\nto field offices as part of the initiative can include support for undercover operations, source
\nidentification and support, and funding of investigative costs. An example of these types of
\ncases was the conviction of the former medical director of, and three therapists employed by, a
\nnow-defunct mental health provider for conspiracy to commit HCF and related charges for their
\nroles in a scheme to fraudulently bill Medicare and Florida Medicaid more than $63 million.
\nAccording to the evidence presented at trial, from approximately 2004 through 2011, the
\nprovider billed Medicare and Medicaid for mental health services that were not medically
\nnecessary or never provided, and paid kickbacks to Helped living facility owners and operators
\n78<\/p>\n
who in exchange referred beneficiaries to provider. The FBI is committed to addressing this type
\nof crime problem through the disruption, dismantlement and prosecution of those involved in
\ncriminal enterprises and other organized criminal activities.
\nThe Major Provider Fraud Initiative seeks to identify and target corporate-level groups involved
\nin fraud and abuse schemes with significant billing to health care benefit programs. The related
\nschemes are frequently complex, challenging to identify, and can involve conduct that is
\nnationwide in scope. Extensive resources and coordination are frequently required due to the
\ncomplexity and scope of the schemes. Qui tams are a significant intelligence source for these
\ntypes of cases. These investigations frequently involve pharmaceutical manufacturers, hospital
\ncorporations, and regional or national medical provider agencies. In addition to the work
\ncompleted at the field office level, and in response to this substantial threat, the FBI has
\nestablished a centralized support team to provide investigative Helpance on these cases
\nnationwide. An example of these types of cases would include the investigation of Health
\nDiagnostics Laboratory Inc. (HDL), of Richmond, Virginia, which resulted in HDL agreeing to
\npay $47 million to resolve allegations they violated the False Claims Act. The FBI coordinates
\nefforts in these types of cases with our law enforcement partners, such as DOJ components,
\nHHS-OIG, and other federal agencies.
\nThe FBI actively provides training and guidance on HCF matters. The FBI has teamed with the
\nDOJ, HHS, and private insurance organizations to provide training in the priority threat areas of
\nHCF. Funded training has included innovative methods of employing advanced investigative
\ntechniques; basic HCF training for FBI special agent and professional staff newly assigned to
\ninvestigate HCF; and sessions on new and current HCF trends and issues. FBI personnel training
\nopportunities included sessions offered by the FBI, other government agencies and the private
\nsector. In FY 2015, more than 223 FBI HCF investigators and analysts received training. FBI
\npersonnel also conducted a wide range of training for external audiences, including private
\ninsurance and regulatory personnel.
\nFunding received by the FBI is used to pay direct and indirect personnel-related costs associated
\nwith the 797 funded positions. Funds not used directly for personnel matters, are used to provide
\noperational support for HCF investigations, national initiatives, training, specialized equipment,
\nexpert witness testimony, and Strike Force operations.
\n79
\nReturn on Investment Calculation
\nThe return on investment (ROI) for the HCFAC program is calculated by dividing the total
\nmonetary results to the Federal government (not including relator payments) by the annual
\nappropriation for the HCFAC Account in a given year (not including portions of CMS
\nfunding dedicated to the Medicare Integrity Program listed in the table on page 81).
\nThe monetary results include deposits and transfers to the Medicare Part A Trust Fund and
\nthe Treasury, as well as restitution and compensatory damages to Federal agencies.
\nThe HCFAC Account is made up of three funding sources: mandatory funding for HHS and
\nDOJ, including HHS-OIG, appropriated through Section 1817(k)(3)(A) of the Social Security
\nAct; mandatory funding for FBI activities appropriated through Section 1817(k)(3)(B) of the
\nSocial Security Act; and discretionary funding for the HCFAC Account appropriated through
\nthe annual Labor-HHS-Education appropriation.
\nFBI mandatory HIPAA funding is included in the HCFAC ROI calculations given the
\nimportant role the FBI plays in achieving the monetary results reflected in the HCFAC
\nannual report and because that statute states that the funds are for the same purposes as the
\nfunds provided for HHS and DOJ under the Social Security Act. However, FBI spending
\nand monetary results are not required to be reported per the statute. Therefore, even though
\nthe FBI mandatory HIPAA funding is included in the HCFAC ROI calculation, it is not
\nreflected in the table on page 7 of this report.
\nOnly certain portions of discretionary HCFAC Account funding are included in the ROI
\ncalculation. All discretionary HCFAC funding for HHS-OIG and DOJ are included in the
\nHCFAC report ROI since they spend their discretionary funding on the same types of
\nactivities that they support with mandatory funding. Only the portion of CMS Medicare
\ndiscretionary HCFAC funding that supports law enforcement is included in the HCFAC
\nreport ROI. The remainder of CMSs HCFAC Medicare discretionary funding supports
\nactivities in the Medicare Integrity Program (MIP) that are included in the MIP ROI, which
\ncalculates the impact of the prevention activities supported by the MIP mandatory and
\ndiscretionary funds is calculated separately from the HCFAC ROI and is reported outside of
\nthe HCFAC report. Impacts for both the CMS Medicaid and Medicare program integrity
\nfunding are included in a separate report.
\n80<\/p>\n
Total Health Care Fraud and Abuse Control Resources
\nThe table below sets forth HCFAC funding, by agency, for health care fraud and abuse control
\nactivities in FY 2015, including sequester reductions. The FBI also receives a stipulated amount
\nof HIPAA funding for use in support of the Fraud and Abuse Control Program, which is shown
\nbelow. Separately, CMS receives additional Mandatory Resources under the Medicare Integrity
\nProgram (section 1817(k)(4) of the Social Security Act). The inclusion of the activities
\nsupported with these funds is not required in this report, and this information is included for
\ninformational purposes.
\nSince 2009, Congress has also appropriated annual amounts to help carry out health care fraud
\nand abuse control activities within DOJ and HHS. Those amounts are set forth as Discretionary
\nResources in the table below and the results of the efforts supported with these funds are
\ncontained within this report.
\nMandatory Resources1 Fiscal Year 2015
\nOffice of Inspector General $186,066,026
\nHealth and Human Services Wedge2
\n35,587,356
\nMedicare Integrity Program3
\n863,773,251
\nMIP\/Medicare (non-add) 797,329,155
\nMedi-Medi (non-add) 66,444,096
\nDepartment of Justice Wedge2
\n58,094,935
\nFederal Bureau of Investigation4
\n129,216,580
\nSubtotal, Mandatory HCFAC $1,272,738,148
\nDiscretionary Resources
\nOffice of Inspector General $67,200,000
\nCMS Program Integrity 544,320,000
\nMedicare Program Integrity (Non-Add) 477,120,000
\nMedicaid Program Integrity (Non-Add)5
\n67,200,000
\nDepartment of Justice 60,480,000
\nSubtotal, Discretionary HCFAC 672,000,000
\nGrand Total, HCFAC $1,944,738,148
\n1
\nAll mandatory resources are post-sequester.
\n2
\nThe HHS and DOJ Wedge funds are divided among multiple agencies within HHS and DOJ. Page 7 of this report<\/p>\n
includes the allocations of the HHS and DOJ Wedge by agency or activity.
\n3
\nMedicare Integrity Program (MIP) and Medi-Medi fund fraud prevention and detection activities within Medicare
\nand Medicaid, which are not included in this report to Congress. There is another mandatory report due to Congress
\nregarding MIP activities.
\n4
\nThe FBI receives funding annually to conduct anti-fraud activities authorized by HIPAA. This funding is included
\nin the HCFAC ROI calculation for this report.
\n5
\nThis does not include the Medicaid Integrity Program authorized in the Deficit Reduction Act of 2005, which
\nreceives funding separately from the HCFAC account.
\n81
\nGlossary of Terms
\nThe AccountThe Health Care Fraud and Abuse Control Account
\nACA Affordable Care Act
\nAKS Anti-Kickback Statute
\nAoADepartment of Health and Human Services, Administration on Aging
\nACLDepartment of Health and Human Services, Administration for Community Living
\nASPA Helpant Secretary for Public Affairs (HHS)
\nAUSAHelpant United States Attorney
\nCHIPChildrens Health Insurance Program
\nCIACorporate Integrity Agreement
\nCMP Civil Monetary Penalty
\nCMPLCivil Monetary Penalties Law
\nCMSDepartment of Health and Human Services, Centers for Medicare & Medicaid Services
\nCNCCompromised Number Contractors
\nCPICenter for Program Integrity
\nCRIPACivil Rights of Institutionalized Persons Act
\nCYCalendar Year
\nD.XX or X.D.XxFederal judicial district of a state, which may include north, south, east, west
\nDMEDurable Medical Equipment
\nDOJThe Department of Justice
\nFEHBPFederal Employee Health Benefits Program
\nFBIFederal Bureau of Investigation
\nFCAFalse Claims Act
\n82
\nFDAFood and Drug Administration
\nFDCAFood, Drug, and Cosmetic Act
\nFYFiscal Year
\nHCFACHealth Care Fraud and Abuse Control Program or the Program
\nHEATHealth Care Fraud Prevention & Enforcement Action Team
\nHFPPHealth care Fraud Prevention Partnership
\nHHAHome Health Agency
\nHHSThe Department of Health and Human Services
\nHHS-OIGThe Department of Health and Human Services – Office of the Inspector General
\nHIHospital Insurance Trust Fund
\nHIPAA The Health Insurance Portability and Accountability Act of 1996, P.L. 104-191
\nHIVHuman Immunodeficiency Virus
\nMEDICMedicare Drug Integrity Contractors
\nMFCUMedicaid Fraud Control Unit
\nOCGSOrganized Crime and Gang Section
\nOGCOffice of the General Counsel, Department of Health and Human Services
\nPERMProgram Error Rate Measurement
\nPFPPharmaceutical Fraud Pilot Program
\nThe ProgramThe Health Care Fraud and Abuse Control Program
\nSecretaryThe Secretary of the Department of Health and Human Services
\nSMPSenior Medicare Patrol
\nUSAOUnited States Attorneys Office
\nZPICZone Program Integrity Contractor
\n83<\/p>\n
– assignment 2-
\nOff label and unlicensed drugs prescription for hospitalized children: reasons and justification<\/p>\n
Paper details:<\/p>\n
off label and unlicensed drugs prescription for hospitalized children: reasons and justification Abstract \u2014 Introduction \u2014 Literature data discussion\u2014Conclusion \u2014 References \u2013 Definition of unlicensed and off-label drug use and Benefits of licensing \u2013 Epidemiology on off-label and unlicensed drug use \u2013 Basic problems for use unlicensed and off-label drug, and describe the safety related issues on off-label drug use here \u2013 Common reasons for use off label and unlicensed prescription, and Justification for the use of these drugs \u2013 Recommendations of international health organizations to avoid this use \u2013 What is changed and happened these days about uses unlicensed and off-label drug \u2013 Reasons for insufficient research to license drugs and research justification: Note: for Literature data discussion All research from 2015 to 2019: (setting, methodology, duration, number of patient and prescriptions, rate of used) And for references not less than 2010<\/p>\n","protected":false},"excerpt":{"rendered":"
In this assignment you will have an opportunity to review an annual report produced by the Department of Justice. The report summarizes compliance activities conducted\u2026<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8827,10099,10540,10536,10892,10538,10539,10537,10891],"tags":[10549,10616,10615,7687,10627,8857,10552,10295,10548,10622,8907],"class_list":["post-130055","post","type-post","status-publish","format-standard","hentry","category-australia-essays","category-buy-essay","category-cheap-essay-writers","category-get-assignments-done","category-page-paper","category-phd-essay-writers","category-research-paper-writing-service-for-any-topic","category-study-bay-essay","category-write-my-assignment-ireland","tag-ai-plagiarism-free-essay-writing-tool","tag-australian-best-tutors","tag-best-trans-tutors","tag-buy-essay-uk","tag-cheap-dissertation-writer","tag-help-with-writing-an-essay","tag-help-write-my-paper-ai-free","tag-homework-for-you","tag-online-essay-writers","tag-phd-essays","tag-write-my-essay-for-me"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/130055","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=130055"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/130055\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=130055"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=130055"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=130055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}