United States: Doctors Corralled For Kickbacks

Last Updated: November 11 2013
Article by Robert M. Wolin

The U.S. Department of Health and Human Services Office of Inspector General's (OIG) chief counsel indicated in 2007 that the government's fraud enforcement focus on large organizations was an "ineffective strategy" and that the government was going to begin doing a better job holding the physician gatekeepers accountable for their role in kickback cases. See the December 13, 2007 issue of the Health Law Update. At the same time, the OIG indicated that it also was focusing attention on other individuals responsible for steering organizations into illegal kickback schemes and inadequate quality-of-care circumstances to help address repeat offenders, particularly among pharmaceutical manufacturers and long-term care providers. Five years later, October 2013 could well be dubbed the physician convictions and indictments month.

One case that highlights this trend involves Orange MRI LLC. From early 2009 through 2011, Orange MRI paid physicians for each MRI and CT scan they referred. One physician reported that Orange MRI gave him $100 cash for each Medicare or Medicaid patient he referred for an MRI and $50 for each CT scan referral. As a result of these relatively small payments, twelve physicians and nurse practitioners either have been convicted or have pleaded guilty to receiving kickbacks. Most of those pleading guilty or convicted have been required to forfeit funds and have received prison sentences, although the larger impact of the convictions will be on their ability to continue practicing their profession. This case follows on the heels of the Biodiagnostic Laboratory Services LLC case in September in which two New Jersey doctors pleaded guilty for their roles in a long-running bribes-for-laboratory test referrals scheme in which six physicians already have pleaded guilty.

Physicians were recently indicted in connection with kickbacks paid by Sacred Heart Hospital in Chicago in exchange for the referral of hospital patients covered by Medicare and Medicaid. According to the indictment, Sacred Heart paid physicians bribes concealed as consulting, employment and personal services compensation, rent and instructional stipends from 2004 through 2013.

Another physician employed as the Medical Director at Home Care Hospice Inc. (HCH) was sentenced to 51 months of prison time for receiving kickbacks for patient referrals. The physician entered into a written contract that attempted to camouflage kickbacks as payments for services rendered in the physician's capacity as medical director. The large majority of payments, according to the government, were illegal payments for the referral of Medicare and/or Medicaid patients to HCH.

Following the death of a patient, another physician was convicted of healthcare fraud for lying about his qualifications to practice medicine in New York. He was sentenced to 24 months in prison. The physician in this case submitted a medical staff application that stated (1) he had earned a medical degree, (2) he had never voluntarily withdrawn or resigned any employment or privileges at any healthcare facility in order to avoid the imposition of disciplinary measures, and (3) he had never been denied or suspended from any healthcare facility. In fact, the defendant did not have a degree, had been suspended from his duties as a resident, dismissed from the residency program due to academic incompetence and had resigned from the medical staff of a hospital after being told he would be terminated for poor performance. The New York State Board of Professional Medical Conduct concluded that the defendant obtained his medical license by fraud, and while practicing medicine, engaged in gross negligence and gross incompetence with at least five patients.

A Texas physician recently was sentenced to prison following his conviction of conspiracy to commit healthcare fraud relating to medically unnecessary diagnostic testing and physical therapy. These unnecessary services were billed to Medicare and Medicaid for payment under the physician's billing number. The physician worked in conjunction with the owners and operators of medical clinics and diagnostic testing centers in the Houston area. As part of the scheme, Medicare patients were paid to show up at the clinics for testing. Patient recruiters also were paid for recruiting and bringing patients to the clinics for the unneeded testing. Another Texas physician was sentenced to 48 months in prison for healthcare fraud. The physician and his physician assistant, who previously pleaded guilty, falsely represented that office visits and diagnostics were medically necessary. The physician traded controlled substances for patients agreeing to submit to unnecessary diagnostic tests. In many cases, the physician did not even read the test results and, in any event, did not have the proper training to read them.

A Garland, Texas, physician pleaded guilty to conspiracy to commit healthcare fraud in connection with a physician house call company's billing Medicare for care plan oversight for numerous beneficiaries when the physician was out of town, including dates when he was out of the country and on a cruise. The company submitted claims to Medicare using Dr. Padron's unique Medicare number, with Dr. Padron's permission, regardless of the claim's merit. Dr. Padron also entered a guilty plea to one count of conspiracy to unlawfully distribute a controlled substance stemming from his operation of a "pill-mill."

Not to be outdone, a Kenner, Louisiana, physician pleaded guilty to 35 counts of Medicaid fraud for billing Medicaid for services, such as tests, procedures and treatments not rendered, and knowingly falsifying documents to support the fraudulent billing of those services. To complete the fraud, the physician also recorded bogus diagnoses and symptoms to justify his billing.
A Connecticut physician recently entered into a civil settlement to pay $300,000 to resolve allegations that the physician violated the False Claims Act by submitting to Medicare claims for physical therapy services that were medically unnecessary and/or not performed in accordance with Medicare requirements. Specifically, the government alleges that Dr. Xu billed Medicare for one-on-one physical therapy services when the physical therapist was, in fact, providing group therapy, and that he submitted claims to Medicare for therapy services that were rendered by massage therapists. Similarly, a former Rhode Island physician agreed to pay the government $1.2 million dollars for fraudulent claims submitted to the Medicare and Medicaid programs for services not performed or not performed as described. For the trifecta, a Corpus Christi physician was recently charged in a 14-count indictment for a scheme to defraud Medicare and Medicaid by charging for services never received, including, in some cases, services that would have required him to have personally worked more than 24 hours in a single day. He also is alleged to have billed for services to patients posthumously. While we are in Connecticut, let's look at a podiatrist who recently was incarcerated for 30 months for billing Medicare for nail avulsion surgical procedures when he only provided nonreimbursable "routine foot care" services, such as simply trimming or clipping toenails.

A Wichita chiropractor was indicted in a scheme in which he was charged with healthcare fraud, aggravated identity theft, illegally obtaining controlled drugs, money laundering and tax evasion. The indictment alleges that the chiropractor submitted false claims for healthcare services, including: (1) services that were not performed, (2) services that were not performed by properly certified personnel, (3) services performed by physicians when they were not present at the clinic, and (4) services that were medically unnecessary. The chiropractor developed what he called an "integrated practice," hiring physicians, advanced registered nurse practitioners and physical therapists, and ostensibly having them perform procedures he was not qualified to perform. He misrepresented to the Kansas Board of Healing Arts that medical doctors had an ownership in his clinic. He used the names of physicians he employed to submit false claims for services.

While the number of physicians indicted, convicted and sentenced in October was significant, it is not an aberration. The government is actively working to identify and prosecute physicians who participate in or devise illegal kickback schemes.

Careful selection and review of your physician employees/medical staff members, business associates and contractors is an important step in minimizing exposure to wrongdoing and investigations. As Mom said, "be careful who you play with." Employers and contracting parties should consider adding a provision requiring physicians to notify them within a specified number of days after they become aware of an investigation of their practices by Medicare, Medicaid and/or other third party payer that alleges fraud or material violations of law or program requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions