New Jersey Hospital Pays $7.5 Million for Medicare Fraud

Warren Hospital of  Phillipsburg, New Jersey, agreed to pay $7.5 million to the government for Medicare fraud. DOJ alleged that “Warren purposefully inflated charges for inpatient and outpatient care to make these cases appear more costly than they actually were, and thereby obtained outlier payments from Medicare that it was not entitled to receive.” Warren also was accused of violating the Stark laws “by submitting claims for Medicare patients referred by physicians with whom it had a unlawful financial relationship.” http://www.usdoj.gov/usao/nj/press/press/files/pdffiles/warr1210rel.pdf  

Two whistleblowers shared $1.2 million, or 16% of the recovery.

Arizona Hospital pays $5.8 million to settle Medicare Fraud claims

Source: http://www.surgicenteronline.com/hotnews/7ch10155123.html

CHARLOTTE, N.C. — MedCath Corporation (Nasdaq: MDTH) announced today that ArizonaHeartHospital, one of the 11 hospitals in which MedCath owns an interest, has entered into a settlement with the United States Department of Justice (the DOJ) and the United States Attorneys’ Office in Phoenix under the federal Civil False Claims Act.

The settlement concerns Medicare claims submitted between June 1998 and October 2002 for physician services involving the implantation of certain endoluminal graft devices (utilized to treat aneurysms) that had not received final marketing approval from the Food and Drug Administration, and allegedly were either implanted without an approved investigational device exception (IDE) or were implanted outside of the approved IDE protocol. The DOJ’s allegations related solely to whether the procedures were properly reimbursable by Medicare; quality of patient care was not an issue.

The parties reached a settlement of the allegations to avoid the delay, uncertainty, inconvenience, and expense of protracted litigation. Further, the hospital denies engagement in any wrongdoing or illegal conduct, and the settlement agreement does not contain any admission of liability. As previously disclosed in MedCath’s filings with the Securities and Exchange Commission, the hospital will pay approximately $5.8 million to settle and obtain a release from any civil or administrative monetary claims related to the DOJ’s investigation. Additionally, the hospital has entered into a five-year corporate integrity agreement with the Office of the Inspector General of the Department of Health and Human Services under which the hospital will continue to maintain its existing corporate compliance program and which relates to clinical trials conducted at the hospital.

Source: Lorin E. Patterson, Reed Smith and MedCath Corp.

Lawyer sued under False Claims Act

The DOJ has filed a false claims act suit against the former general counsel for Tenet Healthcare, previously known as National Medical Enterprises, Inc. Just last week Thomas F. O’Neil III and Melinda H. Waterhouse
of DLA Piper LP posted an excellent summary of the case.   <<http://lawfuel.com/show-release.asp?ID=16358>>

Tenet already has paid $920 million as a result of a qui tam whistleblower suit for Medicare fraud. In this suit, the DOJ is asking that the lawyer personally pay tens of millions of dollars. 

An NME executive wrote a memo suggesting that NME’s contracts with doctors violated the Stark Act.  The Stark Act is aimed at preventing kickbacks when patients are referred to a physician.  The theory behind the Stark Act is that the kickbacks ultimately get passed along to the consumer, and thus to Medicare and Medicaid.

The suit claims that the general counsel hired an outside law firm, which issued a report saying NME’s contracts with the doctors did in fact violate the Stark Act.  Nonetheless, it suggests, four days later the general counsel certified that NME was in compliance with the law, and she certified compliance again one year later.  She did ask another employee to take the corrective measures that the outside firm had suggested, but, per the suit, apparently she never followed up. 

I’ve been saying all along that healthcare professionals, billing department employees, nurses, etc., have got to protect themselves.  In a corporate environment, it’s easy to buy into “group think” – the company makes all the decisions, you just do what you’re told to do.  But this case certainly makes it clear how dangerous an assumption that is.  Nobody in the healthcare field, regardless of whether they are giving direct medical care, should make that assumption.  If you know about fraud, don’t put yourself in a spot to take the heat for it. 

Department of Defense Inspector General finds Contractor Fraud in Iraq

It appears that qui tam and whistleblower cases in the Department of Defense area are bound to take off.

The DOD Inspector General has issued a report on what it calls “challenges” to keeping up with the supplies for our troops and for distribution in Iraq. 

http://www.dodig.mil/Audit/reports/fy08/08-026.pdf

The IG said it had “identified a large amount of equipment that was unaccounted for,” but that “it would not be feasible or prudent to request MNSTC-I to continue to try to account for that equipment.”  But it’s the specifics that tell the tale – like the fact that they couldn’t account for 12,712 of 13,508 weapons that were supposed to be delivered. And like this terrifying sentence: “We were unable to identify an audit trail for 99 percent of equipment MIPRs, worth $438.2 million.”

Yikes!  You like to think that it was just a matter of poor procedure controls – that none of these weapons walked off into enemy hands, and that none of the suppliers took advantage of the confusion to ship just part of what they had promised.

But how can you know?  And that’s the point of the report. 

In her blog, Dina Rasor reminds us of the fraud that came to light in the 1980’s.  http://www.huffingtonpost.com/dina-rasor/outraged-at-the-billion-d_b_75707.html

Good point.  Who could forget the $600 toilet seats?

As an interesting aside, I tried to find out just how much those toilet seats did cost.  I gather that the story has moved into the halls of urban myth by now, because folks cite prices from $600 to $40,000.  Either way, it’s more than I pay at Home Depot.

But back to the question – who could forget the toilet seats?  We could, that’s who. 

Let’s hope there are some folks out there who will blow the whistle if fraud did occur.  I personally don’t want to pay my tax share of $438.2 million.