Doctor Sentenced To One Year In Prison For Accepting Thousands Of Dollars In Cash Bribes For Referrals

CAMDEN, N.J. – A doctor with offices in Toms River, New Jersey, was sentenced today to 12 months and one day in prison for accepting thousands of dollars in exchange for patient referrals to two lab companies that performed blood and DNA testing, U.S. Attorney Paul J. Fishman announced.

Vincent Destasio, 55, of Toms River, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an indictment charging him with one count of conspiracy to accept cash bribes. Judge Rodriguez imposed the sentence today in Camden federal court.

According to documents filed in this case and statements made in court:

Destasio, a doctor of osteopathic medicine, was paid cash kickbacks by two sales representatives – Daniel Gilman, 63, of Ocean Grove, New Jersey, and Kenneth Robberson, 47, of Wall, New Jersey – who were partners operating PROMED, a marketing and sales company specializing in blood testing laboratories and DNA laboratory testing companies.

From March 2014 through May 2015, Gilman and Robberson solicited Destasio by paying him cash bribes for referring patient lab work to two separate laboratories for which Gilman and Robberson provided marketing and sales. One company (Company 1) was a blood testing laboratory company and the other was a DNA laboratory testing company (Company 2). Neither Company 1 nor Company 2 had any knowledge of or involvement in the kickback scheme.

Gilman and Robberson received monthly commission checks from the two companies for referrals. After receiving the commission checks from the two companies, Gilman and Robberson would identify the number of patients Destasio had referred and pay him a cash kickback based on those patients. Destasio was paid thousands of dollars in cash bribes for his referrals.

In addition to the prison term, Judge Rodriguez sentenced Destasio to two years of supervised release, fined him $1,000 and entered a forfeiture judgment of $25,000.

Gilman and Robberson have both pleaded guilty to an information charging them with conspiracy to bribe a physician. Gilman was sentenced Sept. 28, 2016, to 12 months and one day in prison. Robberson is scheduled to be sentenced Oct. 5, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Camden.

U.S. Attorney Fishman reorganized the health care fraud practice shortly after taking office, creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

California Made Incorrect Medicaid Electronic Health Record Incentive Payments to Hospitals

Although the California Department of Health Care Services (State agency) made Medicaid electronic health record (EHR) incentive program payments to eligible hospitals, it did not always make these payments in accordance with Federal requirements. Specifically, from October 1, 2011, through December 31, 2015, the State agency made incorrect Medicaid EHR incentive payments to 61 of the 64 hospitals reviewed, totaling $23.2 million. These incorrect payments included both overpayments and underpayments, resulting in a net overpayment of $22 million. Because the incentive payment is calculated once and then paid out over 4 years, payments made after December 31, 2015, will also be incorrect. The adjustments to these payments total $6.3 million.

The Health Information Technology for Economic and Clinical Health Act, enacted as part of the American Recovery and Reinvestment Act of 2009, established Medicare and Medicaid EHR incentive programs to promote the adoption of EHRs. As an incentive for using EHRs, the Federal Government is making payments to providers that attest to the “meaningful use” of EHRs. The State agency made approximately $971 million in Medicaid EHR incentive program payments from October 1, 2011, through December 31, 2014. Of this amount, $601 million was paid to 263 hospitals.

We recommended that the State agency (1) refund to the Federal Government $22 million in net overpayments made to the 61 hospitals, (2) adjust the 61 hospitals’ remaining incentive payments to account for the incorrect calculations (which will result in cost savings of $6.3 million after December 31, 2015), (3) review the calculations for the hospitals not included in the 64 we reviewed to determine whether payment adjustments are needed and refund to the Federal Government any overpayments identified, and (4) review supporting documentation from all hospitals to help identify any errors in incentive payment calculations.

In written comments on our draft report, the State agency disagreed with our first recommendation and agreed with our remaining recommendations.

United States Settles Health Care Fraud Action Involving Doctor Who Prescribed Unnecessary Opioid Prescriptions

A doctor who practiced in Warren, Michigan, agreed to pay $200,000 to resolve allegations that he violated the False Claims Act by writing prescriptions for oxycodone and other controlled medications without medical justification, and for billing for medical services without medical justification, announced U.S. Attorney Barbara L. McQuade.

From 2010 through early 2012, Hussein Awada, 46, conspired with patient “marketers” to write prescriptions for tens of thousands of dosages of oxycodone and other controlled medications for no medical purpose. Awada then used the patient data for the patients brought to him by the marketers to submit bills to Medicare for services that were either never performed or were medically unjustified. Awada caused these same patients to receive medically unnecessary monthly x-rays, and other invasive tests, to help conceal his fraud.

In a related criminal action, Awada previously pled guilty to prescribing 80,000 dosages of oxycodone and Roxicodone for no legitimate medical reason, and he admitted to defrauding Medicare, Medicaid, and Blue Cross Blue Shield of about $2.3 million. Awada was sentenced to 84 months in prison and was ordered to pay $2.3 million in restitution. To help pay the restitution, Awada was ordered to forfeit assets. To settle his civil liability under the False Claims Act, Awada agreed to pay an additional $200,000.

The allegations in the civil False Claims Act suit were brought to the government by a whistleblower, known as a relator, under the qui tam provisions of the False Claims Act. The relator, Heather Henson, worked as a receptionist for Awada at his medical practice Midwest Family Practice, PLC during a six-month period from 2010 to 2011. Henson will receive $36,000 out of the $200,000 settlement, as well as a portion of the assets Awada forfeits, for her role in filing the qui tam action.

“Prescription pain pills like oxycodone are controlled substances because their abuse can lead to addiction, illness and death,” McQuade said. “This settlement demonstrates that doctors pay a substantial price when they seek to profit by prescribing medically unnecessary prescription drugs and services that may harm their patients.”

This case was investigated jointly by the U.S. Attorney’s Office for the Eastern District of Michigan and the Department of Health and Human Services, Office of Inspector General.

The case is captioned as United States ex rel. Henson v. Midwest Family Practice, PLC et al., Case No. 2:13-cv-14579 (E.D. Mich.). The related criminal action is captioned as United States v. Awada, Case No. 2:12-cr-20595 (E.D. Mich.).

Washington State Made Incorrect Medicaid Electronic Health Record Incentive Payments to Hospitals

Although the Washington State Health Care Authority (State agency) made Medicaid electronic health record (EHR) incentive program payments to eligible hospitals, it did not always make these payments in accordance with Federal requirements. Specifically, from October 1, 2011, through December 31, 2015, the State agency made incorrect Medicaid EHR incentive payments to 19 of the 20 hospitals reviewed, totaling $11.3 million. These incorrect payments included both overpayments and underpayments, resulting in a net overpayment of $9.2 million. Because the incentive payment is calculated once and then paid out over 4 years, payments made after December 31, 2015, will also be incorrect. The adjustments to these payments total $2.5 million.

The Health Information Technology for Economic and Clinical Health Act, enacted as part of the American Recovery and Reinvestment Act of 2009, established Medicare and Medicaid EHR incentive programs to promote the adoption of EHRs. As an incentive for using EHRs, the Federal Government is making payments to providers that attest to the “meaningful use” of EHRs. The State agency made approximately $250 million in Medicaid EHR incentive program payments from October 1, 2011, through December 31, 2014. Of this amount, $120 million was paid to 87 hospitals.

We recommended that the State agency (1) refund to the Federal Government $9.2 million in net overpayments made to the 19 hospitals, (2) adjust the 19 hospitals’ remaining incentive payments to account for the incorrect calculations (which will result in cost savings of $2.5 million after December 31, 2015), (3) review the calculations for the hospitals not included in the 20 we reviewed to determine whether payment adjustments are needed and refund to the Federal Government any overpayments identified, and (4) review supporting documentation from all hospitals to help identify any errors in incentive payment calculations.

In written comments on our draft report, the State agency partially concurred with our recommendations and provided information on actions that it planned to take to address our recommendations.

09-19-2016 New Jersey Medical Biller Settles False and Fraudulent Claims Case and Agrees to 5-Year Exclusion

On September 19, 2016, Susan Toy, entered into a $100,000 settlement agreement with OIG and agreed to be excluded from participating in Federal health care programs for a minimum of five years. On July 1, 2016, OIG issued a letter to Toy, proposing to impose a civil money penalty and program exclusion on her, pursuant to the Civil Monetary Penalties Law. The settlement agreement resolves OIG’s allegations that Toy prepared and submitted claims for services that were never performed. Toy, through her health care billing company, prepared and submitted claims for an obstetrics and gynecology physician practice located in New Jersey. Toy was responsible for preparing and submitting claims based, in part, on superbills identifying the services purportedly performed during a patient encounter. OIG contended that Toy prepared and submitted claims for Current Procedural Terminology code 91122 (anorectal manometry) for patient encounters where the procedure was neither performed nor identified as performed on the superbill. Senior Counsels David Blank and Tamara Forys represented OIG with the assistance of Paralegal Specialist Mariel Filtz.

HHS’s Office of Inspector General Levies Largest Penalty Under a Corporate Integrity Agreement Against Nation’s Biggest Provider of Post-Acute Care

September 20, 2016

For More Information Contact:
Don White
415/437-7982

Kindred Health Care, Inc., the nation’s largest provider of post-acute care, including hospice and home health services, has paid a penalty of more than $3 million for failing to comply with a corporate integrity agreement (CIA) with the Federal Government, Department of Health and Human Services’ Inspector General Daniel R. Levinson announced today.

It is the largest penalty for violations of a CIA to date, the Office of Inspector General (OIG) said.

The record penalty resulted from Kindred’s failure to correct improper billing practices in the fourth year of the five-year agreement. OIG made several unannounced site visits to Kindred facilities and found ongoing violations.

“This penalty should send a signal to providers that failure to implement these requirements will have serious consequences,” Mr. Levinson said. “We will continue to closely monitor Kindred’s compliance with the CIA.”

OIG negotiates CIAs with Medicare providers who have settled allegations of violating the False Claims Act. Providers agree to a number of corrective actions, including outside scrutiny of billing practices. In exchange, OIG agrees not to seek to exclude providers from participating in Medicare, Medicaid, or other Federal health care programs. CIAs typically last five years.

In this case, CIA-required audits performed by Kindred’s internal auditors in 2013, 2014, and 2015 found that the company and its predecessors had failed to implement policies and procedures required by the CIA and that poor claims submission practices had led to significant error rates and overpayments by Medicare.

Kindred was billing Medicare for hospice care for patients who were ineligible for hospice services or who were not eligible for the highest level and most highly paid category of service, OIG said.

The Medicare hospice benefit covers services for beneficiaries with terminal illnesses who have life expectancies of six months or less. When patients elect hospice, they agree to stop receiving curative treatment and in its place receive palliative care. Benefits are largely for pain relief, respite care and grief and loss counseling for the patient and the family. Benefits can be provided in a person’s home or an inpatient hospice facility.

As a result of the findings of CIA-required audits of its claims, Kindred decided to close 18 sites that it characterized as “underperforming” since March 2015. The company has paid a penalty of $3,073,961.98.

OIG also found that in 2016 the company took significant corrective actions, including upgrading internal audits and investigations and tracking resolutions of identified issues.

Owner of Illinois Home Health Company Admits Paying Illegal Kickbacks to 20 Medical Directors for Referrals of Medicare Patients

CHICAGO — The owner of a home health care company headquartered in Lemont admitted in federal court today that he paid illegal kickbacks to procure referrals of elderly patients on Medicare.

ROMY MACASAET JR. paid kickbacks to medical directors to obtain referrals of Medicare beneficiaries to his company, Home Bound Healthcare Inc., which was one of the largest home health care and hospice companies in Illinois. Macasaet acknowledged in a plea agreement that he retained and paid Medical Directors a monthly fee solely for the purpose of obtaining patient referrals, and not for medical services. Macasaet also acknowledged that he used Medical Director agreements as a way to conceal the payment of kickbacks.

Between approximately December 2006 and September 2014, Macasaet paid $789,327 in bribe payments to approximately 20 medical directors, according to the plea agreement. As a result of the payments, Home Bound improperly sought and received Medicare reimbursements totaling several million dollars.

Macasaet, 47, of Homewood, pleaded guilty to one count of violating the Anti-Kickback Statute. The conviction is punishable by up to five years in prison. U.S. District Judge Samuel Der-Yeghiayan set sentencing for Feb. 15, 2017, at 10:30 a.m.

Macasaet and Home Bound also agreed to pay the United States $6.8 million to resolve civil false claim and anti-kickback allegations, per the terms of a settlement agreement announced today. The agreement settles claims that Home Bound and its subsidiaries violated the federal False Claims Act and Anti-Kickback Statute by obtaining referrals through illegal kickbacks that served as financial inducements for false certifications of eligibility for home health services, and by improperly submitting those false claims to Medicare for reimbursement.

As part of the civil settlement, Macasaet agreed to immediately resign his employment with Home Bound and refrain from seeking future employment with the company. Macasaet further agreed to divest his ownership interest in Home Bound within 120 days of formal entry of the agreement. The settlement was reached by the Justice Department on behalf of the Office of the Inspector General of the U.S. Department of Health and Human Services.

Contemporaneous to the settlement agreement, Home Bound and the HHS Inspector General’s Office entered into a corporate integrity agreement to promote compliance with the directives of Medicare, Medicaid and other federal health care programs. As part of the integrity agreement, Home Bound must establish a compliance program to develop and implement policies, procedures and practices designed to ensure compliance with the requirements of federal health care programs.

The plea agreement and civil settlement were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. Substantial investigative assistance was provided by the U.S. Department of Labor Office of Inspector General, and the Chicago Field Office of the U.S. Department of State Diplomatic Security Service.

The government is represented in the criminal case by Assistant U.S. Attorney Sunil Harjani, and in the civil case by Assistant U.S. Attorney David R. Lidow.

Plea Agreement

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness

WHY WE DID THIS STUDY

Medicare hospice care is intended to help terminally ill beneficiaries continue life with minimal disruptions and to support beneficiaries’ families and other caregivers. Two key requirements of the Medicare hospice benefit are for the beneficiary to sign an election statement and for a physician to certify the beneficiary as terminally ill. Together, the election statement and certification of terminal illness provide critical safeguards to ensure that the beneficiary understands the hospice benefit and that the physician is involved in determining whether the beneficiary is appropriate for hospice care. However, previous OIG work has raised concerns that some election statements used by hospices are misleading and that physicians are sometimes not involved in care planning and may rarely see beneficiaries. Also, OIG has investigated numerous cases in which hospices submitted fraudulent claims for patients who were not appropriate for hospice care. This report assesses both hospice election statements and certifications of terminal illness.

HOW WE DID THIS STUDY

We based this study on a review of hospice election statements and certifications of terminal illness from a stratified random sample of hospice general inpatient (GIP) stays in 2012. Although the election statements and certifications of terminal illness were collected for a previous OIG study that focused on GIP, these documents are for the hospice benefit as a whole and are not specific to any one level of care.

WHAT WE FOUND

We found that hospice election statements lacked required information or had other vulnerabilities in more than one-third of GIP stays. Notably, they did not always mention-as required-that the beneficiary was waiving coverage of certain Medicare services by electing hospice care or that hospice care is palliative rather than curative. Further, in 14 percent of GIP stays, the physician did not meet requirements-such as composing a narrative-when certifying, and appeared to have limited involvement in determining that the beneficiary was appropriate for hospice care.

WHAT WE RECOMMEND

The findings in this report make clear that hospices should improve their election statements and ensure that physicians meet requirements when certifying beneficiaries for hospice care. We recommend that CMS (1) develop and disseminate model text for election statements, (2) instruct surveyors to strengthen their review of election statements and certifications of terminal illness, (3) educate hospices about election statements and certifications of terminal illness, and (4) provide guidance to hospices regarding the effects on beneficiaries when they revoke their election and when they are discharged from hospice care. CMS agreed with three of our recommendations and neither concurred nor nonconcurred with our fourth recommendation.

Copies can also be obtained by contacting the Office of Public Affairs at Public.Affairs@oig.hhs.gov.

Pennsylvania Audiology Practice Agrees to Voluntary Exclusion

On August 19, 2016, in connection with the resolution of False Claims Act liability, John Balko & Associates, Inc. d/b/a Senior Healthcare Associates (SHA), agreed to be excluded from participation in all Federal health care programs for a period of ten years under 42 U.S.C. § 1320a-7(b)(7). OIG alleged that SHA knowingly and intentionally submitted or caused to be submitted claims for payment to Medicare for cerumen removal procedures, nail debridement procedures, and evaluation and management services using modifier-25, which were not medically necessary, were not authorized or requested by patients, were not supported by patient medical records, lacked required medical documentation, and/or were provided in reliance upon improper standing orders.