Healthcare fraud

Former Chicago hospital CEO hit with more federal charges

Fri, 30 May 2008 06:59:55 -0400

Ah, you've gotta love the guys who just won't give up. After years of being knee-deep in an operation riddled with bad behavior, the war still goes on for former administrator and co-owner Peter Rogan, the former owner Edgewater Medical Center. Edgewater, a bankrupt Chicago hospital, collapsed in 2002 after years of his management, with a vice president and four doctors heading to jail for various civil and criminal violations.

The latest news is that Rogan has been hit with federal perjury and obstruction of justice charges, part of a long-running battle with the government over $64 million in civil penalties he owes related to a healthcare fraud scheme that brought down the hospital. He was detained this week in Canada this week, reported while returning from China, U.S. officials are seeking to get Rogan back into the U.S. to hold a trial on the new criminal charges.

Two management firms that helped to run Edgewater Medical Center agreed in 2003 to pay $2.9 million to resolve related criminal and civil healthcare fraud cases, involving a colorful string of allegations including hundreds of unnecessary angioplasties and unnecessary hospitalizations and millions in kickbacks.

To learn more about the charges:
- read this Chicago Tribune article

New HHS program targets Medicare fraud

Mon, 02 Jul 2007 20:01:37 -0400

HHS has launched a new pilot program hoping to catch dishonest medical equipment suppliers in the Los Angeles area and South Florida. If the pilot is successful, CMS plans to role out the program across the United States. The two-year effort, designed to ferret out Medicare fraud, will search for falsified bills and overcharges from suppliers of prosthetics, orthotics, diabetic supplies and DME.

CMS has targeted the two regions not only because they're rich with equipment suppliers, but also because they have a long history of Medicare fraud. Known scams include setting up fake companies who bill Medicare for non-existent services and products that never get delivered to anyone. Nationally, Medicare estimates such fraudsters are stealing several billion dollars a year.

To find out more about the program:
- read this Los Angeles Times article

Related Articles:
NJ hospital to pay $7.5 million Medicare fraud settlement. Report
Siemens execs convinced of $49M hospital fraud. Report
LA doctors named in $12M Medicare scam. Report

St. Barnabas racketeering suit dismissed

Wed, 27 Jun 2007 20:01:37 -0400

Despite its having engaged in a massive Medicare scam costing the federal government at least $630 million, St. Barnabas Health Care System did not prevent other hospitals from getting fair reimbursement.

That's the conclusion of a federal judge, who ruled that despite the fraud, St. Barnabas had not engaged in racketeering. Two small hospitals in Maine and Colorado filed the suit, alleging St. Barnabas' over billing was so extreme it distorted CMS's Medicare reimbursement formulas nationwide. (St. Barnabas had been involved in a scheme to inflate reported costs for its most expensive procedures and thereby increase billings.) The hospitals contended St. Barnabas' actions led to thousands of facilities losing more than $500 million in federal money. The judge, however, ruled the government was the only victim of the health system's actions. When St. Barnabas agreed to repay $265 million, even that damage was mitigated.

To find out more about the case:
- read this article in The New York Times (reg. req.)

Related Articles:
NY hospitals sue UnitedHealth, claim racketeering. Report
UConn Health Center settles Medicare charges. Report
Pediatrix settles over-billing claim for $25M. Report
Medicare fraud costs CMS billions. Report

Doctors sue HealthSouth over surgery centers sale

Sun, 17 Jun 2007 20:01:37 -0400

A group of Tuscaloosa, AL-based physicians are suing HealthSouth to stop the pending sale of one of its outpatient surgery centers. The physician group, Surgery Center Partners, contends that when it agreed to sell its outpatient surgical facilities, HealthSouth didn't honor the terms of the partnership contract with their regional surgery center, HealthSouth Surgical Center of Tuscaloosa. HealthSouth has agreed to sell its 139 surgery centers and three surgical hospitals to Texas Pacific Group for $945 million.

The physician group says that it wasn't given the opportunity, required by their contract, to either accept the terms of the sale or purchase the outstanding interest in the facility themselves. Surgery Center Partners also claims that HealthSouth artificially inflated the value of its 30 percent interest in the center. HealthSouth is asserting that its interest is worth $24.8 million, even though partners paid only $2 million in 2006 when it picked up 20 percent.

To get more background on the dispute:
- read this Birmingham Business Journal piece

Another exec leaves scandal-ridden NJ med school

Tue, 12 Jun 2007 20:01:37 -0400

The University of Medicine and Dentistry of New Jersey (UMDNJ) has seen another top administrator leave in the wake of ongoing questions over alleged financial fraud. A week before he was due to retire, associate dean for academic and student affairs Paul Mehne has been relieved of his duties and placed on paid administrative leave amidst yet another investigation into the school's purported financial misdealings. Early last year, New Jersey Governor Jon Corzine dismissed the school's then-president, Dr. John Petillo, following reports that the school had routinely double-billed Medicare and Medicaid for over a decade. The school has also faced challenges over its too-cozy ties to local politicians and business interests. UMDNJ is now overseen by a federal monitor.

To get more background on UMDNJ's problems:
- read this article from The Star-Ledger

Related Articles:
UMDNJ faces corruption fallout. Report
UMDNJ rocked by fraud charges. Report
UMDNJ adopts rules on no-bid contracts. Report

AZ ambulance firm settles with US DOJ

Mon, 11 Jun 2007 20:01:38 -0400

Scottsdale, AZ-based ambulance firm Rural/Metro has settled with the U.S. Department of Justice over a pair of whistleblower suits alleging that it had offered kickbacks in exchange for Medicare and Medicaid business. Rural/Metro has agreed to pay $2.5 million to settle the 2000 and 2001 suits, which asserted that the company had offered discounts to Texas hospitals in return for contracts to provide services billable to the state and federal entities. (Competitor American Medical Response previously paid $9 million to the DOJ to settle similar allegations.) As part of the settlement, whistleblowers Daniel Block and Adam Wightman will receive $450,000. Rural/Metro serves 365 communities and has more than 8,000 employees. It reported annual revenues of $450.9 million for fiscal 2006.

To get more background on the settlement:
- read this Modern Healthcare article (sub. req.)

Related Articles:
Execs indicted on $79M bid-rigging charges. Report
Siemens execs convicted of a $49 million hospital fraud. Report

Execs indicted on $79M bid-rigging charges

Sun, 20 May 2007 20:01:35 -0400

A group of six men have been indicted on federal charges that they rigged bids for a $79 million IT project. The group, which includes contractors, a military officer, the officer's son and a prominent healthcare consultant, is accused of steering IT contracts for roughly 20 Army hospitals to companies with which they were affiliated or companies they controlled. In some cases, the contracts were designed such that only a specific company could get them, and in others, the bidding process was rigged to make it appear competitive when it wasn't. The federal authorities say the men laundered the money by channeling it through investments in real estate and nightclubs.

To get more detail on the indictment:
- read this Modern Healthcare item (sub. req.)

Related Articles:
Siemens execs convicted of a $49 million hospital fraud. Report

IL doctors accused of fraudulent MRI deals

Thu, 10 May 2007 20:01:38 -0400

A group of Chicago-area MRI centers have been named in a broad-based state investigation, which concluded that they'd agreed to pay doctors over $130,000 a year to refer patients. The state attorney general's office contends that the MRI centers, largely operated by Virginia's MIDI, trained salespeople to lure physicians into bogus lease deals by dangling kickbacks, as much as $277 per MRI scan. Phantom lease deals made it look like doctors were managing the MRI equipment and providing services, but the MRIs were actually performed at radiology centers.

To find out more about the case:
- read this Chicago Tribune piece

Related Articles:
Siemens execs convicted of $49 million hospital fraud. Report
LA doctors named in $12 million Medicare scam. Report

FL DME companies named in $142M fraud

Thu, 10 May 2007 20:01:37 -0400

Federal officials have arrested 38 individuals in South Florida--a world capital of DME fraud--accusing them of defrauding the Medicare program of more than $142 million. Working with state and local authorities, the feds investigated the individuals for two months, relying in part on real-time computer data to track the progress of their activities. The officials concluded that the defendants paid Medicare enrollees to use the enrollees' card numbers. Prosecutors say that the accused used the card numbers to submit fraudulent claims for power wheelchairs, walkers and blood sugar test kits. HHS secretary Mike Leavitt has said that the government could potentially save as much as $2.5 billion per year by slashing Medicare fraud.

To find out more about the problem:
- read this Kaiser Daily Health Policy Report item

Related Articles:
Medicare fraud costs CMS billions. Report
Fraud riddles FL medical device firms. Report
NJ hospital to pay $7.5 million Medicare fraud settlement. Report
Siemens execs convinced of $49M hospital fraud. Report

DOJ joins lawsuit against HealthEssentials

Thu, 26 Apr 2007 20:01:35 -0400

The U.S. Department of Justice has joined a group of suits filed against HealthEssentials Solutions, a provider of geriatric services to nursing homes, assisted living facilities and home-based patients, has been charged with making false Medicare claims. The suits accuse HealthEssentials of upcoding Medicare billings and charging Medicare for needless services. Specifically, the charges say that HES not only upcoded care charges, but also billed for assisted living care for services actually provided in patients' homes.

These suits were initiated by former staffers from the Louisville, KY firm under whistleblower provisions of the False Claims Act. The False Claims Act allows whistleblowers to get a portion of any funds recovered by suits they file. The U.S. can charge HealthEssentials up to three times the amount of any payments which were fraudulently billed.

To find out more about the suits:
- read this United Press International piece
- read the DOJ press release

Related Articles:
Gov't: Pharmaco bilked CMS out of $500M. Report
DOJ wants data on device payments. Report