When A Doctor Needs a Lawyer: Fraud Investigations – Avoid Becoming the Next Headline

1066058_patrol_hat_too1Healthcare fraud attributable to nurses, hospitals, pharmacists, equipment providers and doctors, contributes to the high cost of medical care. For this and other reasons, fraud continues to be a hot topic in the healthcare industry. Recently, there have been numerous headlines regarding Medicare, Medicaid, and private insurance company investigations of providers for improper billing practices. Accusations stem from both whistleblowers and audits, making it difficult for providers to hide behind fraudulent billing practices. With numerous investigations in the spotlight in recent months, providers should be alert and act to ensure that they are compliant with the law.

Billing schemes of healthcare providers are making news headlines

Last month, a Sanford neurosurgeon was fired after being investigated for performing unnecessary spine surgeries. After the FDA approved a device that was created by his own company, the number and complexity of spine infusion surgeries that the surgeon performed increased rapidly. A whistleblower lawsuit claims that Dr. Asforda was incentivized to perform unnecessary surgeries, stating that he defrauded the U.S. government for millions of dollars. Dr. Asforda’s story is not unique.  Numerous lawsuits regarding alleged fraud are shaking up the healthcare industry. The following additional examples are matters of fraud that have surfaced within the last month:

  • In Oklahoma, a pharmacy owner pled guilty to health insurance fraud after submitting claims to Medicare and the state’s Medicaid program. The pharmacy owner is responsible for paying more than $1 million for two counts of healthcare fraud.
  • In Alabama, Ms. Waltz, a psychologist who operates Capstone Medical Resources, was charged with Conspiracy to Defraud Medicaid of $1.5 million. She is responsible for paying restitution fees to Medicaid.
  • Louis pharmacy owner Rehan Rena was sentenced to prison for filing false tax returns and paying illegal kickbacks to physicians.
  • Baylor Scott and White Health faced a $61.8 million fraud case involving an alleged Medicare overbilling-scheme reported by a whistleblower. The lawsuit was dismissed on August 8th, 2019.
  • Recently, Cigna filed a complaint in the United States District Court of Connecticut claiming that California-based company New Method Wellness engaged in a fraudulent scheme. According to Cigna, New Method Wellness provided services to patients that were not medically necessary and submitted excessive reimbursement claims.

Federal Penalties For Healthcare Fraud Can Include Imprisonment and Severe Fines

Physicians are not limited to civil liabilities for committing healthcare fraud.  The federal criminal health fraud statute 18 U.S.C. § 1347 includes penalties for providers who intentionally defraud any healthcare or benefit program or use false statements to obtain funds from a federal health program of up to 10 years in prison. If found guilty under the statute, providers can also face up to $500,000 in monetary fines.

Georgia Law Penalties for Healthcare Fraud Can Include Prison Time and Significant Money Penalties

In Georgia, fraud investigations have resulted in monetary recovery for Medicaid and Medicare. In March of 2019, both the former CEO and former owner of Primera were found guilty of aggravated identity theft and conspiracy to commit healthcare fraud. Their scheme included falsified lab reports and billings to Medicaid for services not rendered. In May, a Savannah-based CEO of a medical equipment company was sentenced to 40 months in prison and $1.9 million in restitution to Medicare after operating “Operation Brace Yourself,” an alleged kickback scheme. “Operation Brace Yourself” reportedly used fraudulent telemedicine companies that worked with providers to obtain patient referrals for medically-unnecessary back, shoulder, and knee braces. The investigation is still ongoing. Both instances reveal the state’s lack of tolerance for illegal billing and show its intention to hold violators accountable.

In our Georgia and South Carolina based healthcare and business law firm, we represent physicians who face accusations of healthcare fraud, and advise healthcare providers, healthcare systems, hospitals and medical practices seeking to comply with the law. Our team understands that the volume of patients, transitions to electronic health records from paper records, complex billing codes, and personnel issues can contribute to faulty billing practices. Despite the internal inconsistencies that could factor in to improper billing, providers nevertheless are held liable for what occurs within their practices. To help mitigate billing and coding issues and avoid allegations of fraud ahead of time, providers and practice managers may benefit from the advice of healthcare counsel about their internal billing and coding practices.

If you have questions about this blog post or any other health care legal issue, contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@hamillittle.com.


** Disclaimer: Thoughts shared here do not constitute legal advice. Please consult with an attorney to discuss your legal issue.

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