June 16, 2020

Amid Pandemic, Vigilance Against Health Care Fraud Still Continues

Prosecutions related to Medicare kickback schemes and genetic testing continues despite the pandemic with several new cases.  In the fall of 2019, the Department of Justice (“DOJ”) arrested 35 different individuals amidst allegations of targeting senior citizens for genetic testing.   Now, several medical company operators and physicians have recently been accused of health care fraud as a result of participating in Medicare kickback schemes related to genetic testing.             

Many of the cases allege violations of the Anti-Kickback Statute or the False Claims Act. The Anti-Kickback Statute prohibits the payment or receipt or cash (or in kind payment) in return for referring an individual for items or services that may be paid for, in whole or in part, by a Federal health care program. Additionally, the False Claims Act imposes liability on individuals who, among other things, present false or fraudulent claims in return for payment or knowingly makes or uses a false record or statement relevant to a false or fraudulent claim.

The first recent case occurred on May 1, 2020, when the U.S. Department of Justice for the Eastern District of Wisconsin announced a settlement with the Center for Pain Management, S.C. (“CPM”) and its owner, Dr. Nosheen Hasan, following allegations that they ordered urine drug tests to be performed in return for illegal kickbacks. Further, it was alleged that CPM and Dr. Hasan ordered the tests even though they knew that the tests were not medically necessary. CPM and Dr. Hasan were charged with violating the Anti-Kickback Statute and the False Claims Act. A Special Agent in Charge from the Federal Bureau of Investigation’s (“FBI”) Milwaukee Field Office announced in this press release that the FBI has made ending health care fraud a priority and “will continue to hold accountable physicians who misuse Medicare and Medicaid dollars.”

In Georgia, another health care company operator was accused of conspiring to pay illegal kickbacks, according to a May 13, 2020 press release issued by the U.S. Department of Justice for the District of Georgia. Patrick Wolfe, the operator of a durable medical equipment company, was alleged to have participated in a kickback scheme which involved telemedicine fraud. Wolfe allegedly conspired to pay kickbacks in return for signed orders from physicians and nurse practitioners, which he would then bill to Medicare Part B and C. The Department of Justice warns that as the utilization of telemedicine increases, especially during the COVID-19 pandemic, “vigilance in ensuring that fraud and kickbacks do not usurp the legitimate practice of medicine by electronic means is more important than ever.”                                                                                   

Additionally, on May 14, 2020 the owner of Encore Health Enrollment, Inc., a marketing company for genetic testing services in Georgia, was charged with committing health care fraud and was alleged to have paid and received illegal kickbacks. Ashley Hoobler Parris (“Hoobler”) worked with marketers to target elderly people in order to convince them to have genetic testing done, despite whether it was medically necessary according to Medicare rules. Hoobler is alleged to have paid illegal kickbacks to telemedicine companies in order to obtain doctors’ orders (“D.O.s”). Further, Hoobler allegedly sent completed tests and the D.O.s to laboratories and received kickbacks in return.                                                                            

In the midst of the current COVID-19 pandemic, which has undoubtedly increased the use of telemedicine and electronic billing, it is more important than ever to ensure that sufficient oversight functions are in place and proper safeguards are being utilized in order to ensure proper compliance with state and federal laws.

For more information, please contact Danielle Holley Tangorre at dhtangorre@oalaw.com.  Colleen Pierson, Law Clerk, contributed to this article.