1. Delaware’s Christiana Care settles kickback suit for $3.3 million. This month, Christiana Care Health System in Wilmington, Del., agreed to pay $3.3 million to settle claims made by a whistleblower that the health system allegedly paid kickbacks to neurologists for referring patients to its Wilmington hospital. According to the allegations, Christiana Care overpaid physicians at Neurology Associates for in-hospital readings of EEGs allegedly as a “reward” for referring patients to the hospital. The court documents note the payments were part of a contract dating to 1989, prior to the enactment of the current Stark Act and Delaware Anti-kickback Statute. Officials from Christiana Care said they put the contract out for rebid in 2003, when it terminated Neurology Associates’ contract under the Stark Act, but the practice won the contract back in 2003. The whistleblowers in the lawsuit were a group of physicians from a competing neurology group. Christiana Care did not admit wrongdoing in the settlement and said the decision to settle was made to avoid costly litigation.
2. New Jersey’s Trinitas Regional settles allegations of inflated charges for $3.02 million. Trinitas Regional Medical Center in Elizabeth, N.J., agreed in Nov. 2009 to pay the United States $3.02 million to settle allegations it defrauded Medicare by fraudulently inflating charges for Medicare patients. The federal government intervened in the case following a whistleblower suit filed in 2005 in New Jersey by hospital consultant Tony Kite. At this time, Mr. Kite alleged that more than 15 hospitals on the East Coast similarly inflated their charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid.
Medicare provides supplemental reimbursement, in addition to its standard payment system, called “outlier payments,” to hospitals and other healthcare providers in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payments system to ensure that hospitals are incentivized to treat inpatients whose care requires unusually high costs. In this case, Trinitas was accused of submitting fraudulent claims in order to receive these outlier payments.
3. New Jersey’s Our Lady of Lourdes Medical Center settles allegations of inflated charges for $7. 95 million. In Dec. 2009, Our Lady of Lourdes Medical Center in Camden, N.J, agreed to pay the United States $7.95 million to settle allegations of Medicare fraud by inflating charges to receive outlier payments, similar to Trinitas.
Here, again, the lawsuit alleged the hospital claimed outlier payments for cases that did not qualify for this higher-cost category of payment. The federal government’s intervention in the case stemmed again from filings in 2005 by Mr. Kite.
4. New York’s Brookhaven Memorial Hospital Medical Center settles allegations of inflated charges for $2.92 million. Brookhaven Memorial Hospital Medical Center, on Long Island, N.Y., agreed in February to pay the United States $2.92 million plus interest to settle allegations the hospital inflated charges to obtain supplemental outlier payments from Medicare when the supplemental payments were not warranted. Here, again, the settlement followed the government’s intervention of Mr. Kite’s 2005 allegations.
Trinitas Regional, Brookhaven and Our Lady of Lourdes are the most recent hospitals to settle allegations of fraud brought forth by Mr. Kite. However, several other hospitals previously settled suits originally brought forth by Mr. Kite, including, but not limited to, St. Vincent Health System in Erie, Pa (agreed to pay $1.9 million in Nov. 2008); St. Joseph Healthcare System in Paterson, N.J (agreed to pay $1.75 million in Oct. 2008); and Cooper University Hospital in Camden, N.J. (agreed to pay $3.85 million in Sept. 2008).
5. Missouri otolaryngologist indicted on Medicare and Medicaid fraud. Wallace Berkowitz, MD, an otolaryngologist based in St. Louis with offices in Missouri and Illinois, was indicted in February on one count of healthcare fraud and 19 counts of making false statements for his role in a scheme between 2003 and 2008 to bill Medicare and Medicaid for services he did not provide. According to the indictment, Dr. Berkowitz allegedly billed Medicare and Medicaid for 25-40 minutes of office time with enrolled patients when, in reality, he only spent around five minutes with each patient. He is also accused of billing for surgical procedures he did not perform. In these instances, Dr. Berkowitz billed for a more costly procedure than the one he actually performed. He faces, if convicted, up to 10 years in prison a fine up to $250,000 for healthcare fraud. Each count of making false statements carries a penalty of up to five years in prison and fines up to $250,000.
6. Southern New Hampshire Medical Center settles false claims allegations for $33,400. Southern New Hampshire Medical Center in Nashua, N.H., agreed in February to pay the federal government $33,400 to resolve allegations it submitted claims to federal healthcare programs for services rendered by a nursing assistant who was excluded from participating in the programs. The hospital contracted with various staffing agencies to employ the individual. SNHMC agreed to cooperate in the government’s investigation as well as follow procedures to ensure excluded individuals are not employed there in the future. Premier Medical Staffing, a temporary staffing firm in New Hampshire, agreed to pay $90,000 to resolve similar allegations related to the same individual.
7. Missouri orthopedic group settles Medicare and Medicaid fraud charges for $200,000. In January, South St. Louis (Mo.) Orthopedic Group agreed to pay $200,000 to settle Medicaid and Medicare fraud charges related to services provided by a Denise Hardy, a podiatrist at the clinic. Dr. Hardy was charged with, and eventually pleaded guilty to, falsifying treatment notes in order to have claims for non-covered services covered by the federal and state health insurers between 1998 and 2005. The group’s civil settlement resolves allegations that South St. Louis Orthopedic caused the false claims submitted to the insurers and that the group received a portion of the profits received by the podiatrist in submitting these claims. The orthopedic group was previously ordered to pay, jointly with the podiatrist, $89,000 in restitution to Medicare and Missouri Medicaid. Dr. Hardy was sentenced to three months in prison.
8. Georgia radiologist accused of billing for reports prepared by assistants. Rajashaker Reddy, MD, owner of Reddy Solutions in Atlanta, was arraigned in Dec. 2009 on several charges, including healthcare fraud, for allegedly signing and submitting for payment approximately 40,000 radiology reports between May 2007 and Jan. 2008 that he did not prepare. Instead, the reports were allegedly prepared by radiology practice assistants and were allegedly not reviewed by Dr. Reddy before he signed them. He faces up to 20 years in prison and a fine of up to $250,000 for each of 16 counts. Dr. Reddy was previously fined $85,000 in 2007 when he admitted he had radiology assistants perform medical procedures while he was practicing in Alabama.
9. Virginia oncologist convicted of defrauding Medicare, Tricare. Ronald Poulin, MD, a hematology and oncology specialist in Virginia Beach, Va., was found guilty in Nov. 2009 of 28 counts, which included healthcare fraud, altering records and making false statements, for his role in a $1.2 million scheme to defraud Medicare and Tricare.
Dr. Poulin was accused of billing for patient visits that never occurred, charging for greater quantities of chemotherapy drugs than were administered to patients and splitting vials of an anemia drug between two patients and then billing as if both patients had received their own vial, according to the report. The prosecution additionally argued Dr. Poulin altered patient records to obstruct an investigation against him. He will be sentenced this month.
10. Michigan physician convicted of conspiracy to commit healthcare fraud in scheme to provide and bill for unnecessary infusions. Toe Myint, MD, a physician based in Troy, Mich., was convicted in January by a Detroit jury of conspiracy to commit healthcare fraud in a $4.2 million Medicare fraud scheme between Sept. 2006 and March 2007. According to trial evidence, Dr. Myint was the physician at Sacred Hope Center, a Southfield, Mich., clinic that purported to specialize in providing infusion therapy to Medicare beneficiaries. Dr. Myint signed patient files ordering infusions and injections of corticosteroids and other medications, despite being aware the patients did not need the drugs and Medicare was being billed for the drugs. Trial evidence also suggested that patients were not referred to Sacred Hope Center or Dr. Myint by their real physicians for any legitimate purpose, but rather were recruited to come to the clinic through the payment of kickbacks.
