Friday Enforcement Wrap: Federal Jury Convicts Patient Recruiter in $1.1 Million Kickback Scheme

DOJ News

Federal Jury Convicts Patient Recruiter in $1.1 Million Kickback Scheme

The Justice Department secured a conviction last week of a Michigan-based patient recruiter for her participation in a conspiracy to commit healthcare fraud. From 2009 to 2012, the recruiter and her co-conspirators developed a scheme to defraud Medicare through the filing of false home health claims. The recruiter solicited and received kickbacks in exchange for referring Medicare beneficiaries to a home health agency owned by her co-conspirators. That agency then submitted claims to Medicare for services allegedly provided to those beneficiaries. The claims at issue totaled approximately $1.1 million.

The DOJ press release is here.

Ophthalmology Practice and Owner Settle Healthcare Fraud Claims for Over $2 Million

The US Attorney’s Office in the Southern District of New York reached a $2 million settlement in a civil fraud lawsuit against a doctor and his practice called Metropolitan Retina Associates, Inc.

The settlement resolved False Claim Act allegations that the doctor and his practice billed Medicare and Medicaid for tests of such poor quality that they provided no diagnostic value and billed for other tests that lacked supporting documentation or were not performed at all.  The doctor and the practice were required to issue an admission and accept responsibility for the conduct in addition to making the $2 million payment.  

The US Attorney’s Office press release is here.

Kickback Scheme Results in Jail Sentence for Owner of Houston Healthcare Clinics

On November 7, 2018, a federal judge sentenced the owner of three Houston, Texas area clinics to 36 months in prison followed by three years of supervised release as part of a plea agreement under which the owner admitted to causing others to submit false and fraudulent claims to Medicare for services not actually provided and/or not actually authorized by a physician.

The owner admitted to directing others to add tests and procedures that were not performed and to create false patient records to support claims for those tests and procedures. In addition to a prison sentence, the court ordered the owner to pay $2.7 million in restitution to Medicare.

The US Attorney’s Office press release is here.

Litigation Developments

Deion Sanders’s Charity at Risk for Default Judgment in Alleged Scheme to Defraud the U.S. Government

A whistleblower suing former NFL star Deion Sanders’s charity, Prime Time Association, for allegedly violating the False Claims Act, asked a federal magistrate judge to enter a default judgment against Sanders and the charity for failing to appear at hearings or otherwise respond to the court.

The whistleblower alleges that Sanders asked him to consider an investment opportunity with his association.  While looking into Sanders and his businesses in considering the opportunity, the whistleblower claims he learned that Prime Time Association filed $200,000 of fraudulent claims under the National School Lunch Program and the Summer Food Service Program.  The case is ongoing and a motion for default is now pending before the court.  The case is Smith et al. v. Sanders et al., No. 3:12-cv-04377 (N.D. Tex. 2012).

Four Co-Conspirators Convicted of Defrauding Medicare and Medicaid of $3.7 Million

A federal jury in Dallas, Texas recently convicted two operators of a home health company, and two of its employees, of conspiracy to commit healthcare fraud. The scheme involved a conspiracy to overbill Medicare for services that were unnecessary; the value of the scheme was over $3.7 million in fraud against the Medicare and Medicaid programs.

In addition to the conspiracy counts, the two facility operators ran the company despite being previously barred from participating in Medicare and Medicaid. As part of this scheme, they created and signed fraudulent documents to conceal the true ownership of the facility. Because of that deception, the two operators were convicted of additional counts for making false statements in connection with the health care program. The case is USA v. Okwilagwe et al., No. 3:16-cr-00240 (N.D. Tex. 2016).

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Court Rules FCA Anti-Retaliation Provision Does Not Cover Post-Employment Retaliation

Earlier this week, in Potts v. Center for Excellence in Higher Education, the Tenth Circuit held “that the False Claims Act’s anti-retaliation provision unambiguously excludes relief for retaliatory acts occurring after the employee has left employment.” 

The court’s decision provides an important defense to companies sued for retaliation by purported whistleblowers based on post-employment allegations.

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