Home Health Care Employees Plead Guilty in Multi-Million Dollar Medicaid Fraud Scheme

DOJ News

Home Health Care Employees Plead Guilty in Multi-Million Dollar Medicaid Fraud Scheme

Two individuals pled guilty in Pennsylvania federal court to conspiracy to defraud the Pennsylvania Medicaid program and commit health care fraud, for their role in an ongoing scheme to submit false claims for home health care services.

The defendants admitted that, between 2011 and 2017, they were employed by Moriarty Consultants, Inc., a home health care company that was approved by the Pennsylvania Medicaid program to offer certain services to Medicaid beneficiaries. MCI is one of four related entities accused of collectively receiving more than $87 million from the Medicaid program from their submission of false claims, largely for patient assistance services (PAS). Fourteen other defendants have been charged in connection with this investigation.

Specifically, the defendants admitted that they participated in a scheme to submit fraudulent claims to Medicaid for services that they did not provide, or did not have sufficient documentation to support. This scheme required the defendants to fabricate timesheets to reflect that PAS care was provided when it was not, and also to submit claims for those services by “ghost” employees. The defendants also admitted to paying kickbacks to consumers for their cooperation. The defendants are set to be sentenced on May 19, 2020, and face up to ten years in prison, in addition to fines.

Read the DOJ press release here.

New York Otolaryngologist Settles $1.1 Million Fraudulent Billing Allegations

A New York-based otolaryngologist agreed to pay $1,109,000 to resolve allegations that he and his medical practice – New York Otolaryngology & Aesthetic Surgery, P.C.– violated the False Claims Act by paying kickbacks and submitting false claims for adult homes services to federal healthcare programs.

Following an FBI investigation, the government alleged that the doctor paid cash tips, excessive rent, and other remuneration to medical management companies in exchange for exclusive access to their adult home patients for allergy testing and other medical services, for which the doctor then billed Medicare and the Federal Employees’ Health Benefits Program.  Moreover, the services were provided by a nurse practitioner, not the doctor, and the government alleged that some services were medically unnecessary.

As part of the settlement, the doctor and his medical practice entered into an Integrity Agreement with HHS-OIG, which requires Anti-Kickback Statute compliance training and a quarterly claims review by an Independent Review Organization.

Read the DOJ press release here.

Training School Owner to Pay $700,000 to Settle False Claims Act Allegations

The owner of two training schools that received VA educational funding, Louisiana Shooters Unlimited and Arete Training Group, agreed to pay $700,000 to resolve allegations that he submitted false claims to the US Department of Veterans Affairs (VA) and the Louisiana Department of Veteran’s Affairs for educational funding to provide classes to eligible veterans.

The government alleged that, from March 2013 through September 2017, the school owner falsely represented to the VA that the schools were in compliance with the “18-15 Rule,” see 38 C.F.R. § 21.4201, 38 U.S.C. § 3680A, under which the VA may not approve an eligible veteran’s enrollment in a program where at least 85% of students receive funding from the educational institution or the VA.

The school owner also allegedly falsified enrollment records for VA students to appear that they had enrolled in courses they did not. He also allegedly did not notify the VA when students failed to attend or dropped a course and failed to repay the attendant overpayments.

Read the DOJ press release here.

Our Analysis

Health Care Industry Remains in DOJ Fraud and Abuse Crosshairs

The federal government revealed in a recent report that of the $3 billion it recovered last year from companies charged with fraud and abuse, more than $2.6 billion involved the health care industry, marking the tenth consecutive year that the Department of Justice recovered more than $2 billion from that sector.

The new numbers – published in DOJ’s annual False Claims Act recoveries statistics for Fiscal Year 2019 – brings FCA recoveries since FY 1987 (the year after Congress amended the FCA to incentivize whistleblowers further to file suit) to more than $62 billion. FCA recoveries since 2009 total more than $40 billion. The FCA is the federal government’s primary tool for combatting fraud involving government funds. The $2.6 billion recovered in FY 2019 from health care companies is a slight uptick from 2018.

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