Fraud charges dog corporate healthcare execs

From upcoding to kickbacks to sales scam accusations, recent news clusters around a theme of executive involvement in proven and alleged healthcare fraud.

Case in point: Daniel K. Lane Jr. was vice president and CFO of Compass Healthcare Inc., a medical equipment company headquartered in St. Louis. After pleading guilty to one count of conspiracy to commit healthcare fraud, Lane was sentenced to one year and six months in federal prison, the FBI announced.

Lane set up Compass Healthcare's billing system to charge insurers automatically in most cases for top-of-the-line compression stockings regardless of what kind of stockings customers received, the FBI noted. Further, Lane conspired with an office manager to hide the inflated billing and applied blanket diagnostic codes to claims to justify payment. Lane and others altered documentation to make it appear that high-cost compression stockings were prescribed, the FBI added.

And in Florida, the former chief operating officer of a state-licensed psychiatric hospital pleaded guilty to one count of conspiracy to commit healthcare fraud and one count of conspiracy to defraud the United States and pay and receive healthcare kickbacks, according to a Department of Justice announcement.

Christopher Gabel took part in the filing of more than $67 million in fraudulent Medicare claims by Hollywood Pavilion LLC.

The hospital claimed payment for services that were not medically necessary or never provided. Gabel admitted rounding up patients nationwide by paying bribes and kickbacks to brokers, the Justice Department announced.

Finally, Minneapolis-based Vascular Solutions Inc. and its CEO, Howard Root, have been charged with selling medical devices without U.S. Food and Drug Administration approval and conspiring to defraud the United States by concealing illegal sales practices, the FDA announced.

The FDA approved Vari-Lase products only for treatment of superficial veins; but Root and the company marketed them for the riskier removal of "perforator" veins, which connect the body's superficial and deep vein systems, according to the indictment.

Root stands accused of leading a seven-year illegal sales campaign and conspiring to hide it from the FDA. 

VSI, however, plans to contest the charges and called the government's case "fundamentally wrong and profoundly unjust" in a prepared statement.   

For more:
- read the FBI announcement
- here's the Justice Department announcement
- see the FDA Office of Criminal Investigations announcement
- view the VSI statement in response to the indictment

Suggested Articles

The HHS OIG is asking for an additional $23.7 million to support fraud oversight that has benefited from an emphasis on data analytics.

A New York surgeon was sentenced to 13 years in prison for fraud and more physician practice news from around the web.

A federal judge has ruled that the U.S. government’s remaining fraud case against UnitedHealth can move forward.