Recently in Health Care Fraud Category

May 17, 2013

Does A Person Submitting False Medicare Bills Abuse The Trust Of The Doctor Making Money Off Of The False Bills?

Hiring is always hard, especially in a small office.

You have work that needs to be done. You can't do it all. Maybe you're a professional, like a doctor, and some of the work isn't the best use of your time.

So you hire someone to help. Really, how much do you know about a person as the result of a hiring process? Yet, despite that, you give them responsibility over a portion of your business.

And you trust them.

As the First Circuit's case in United States v. Zehrung shows, sometimes that trust is not repaid in the way you expect.

69133_medical_exam_equipment.jpgDawn Zehrung worked in a doctor's office. While the doctor was seeing patients - he had 14,000 patients - she was responsible for sending the office's bills to Medicare, the state of Maine's Medicaid program, and other insurance companies.

She also had unsupervised control of the firm's checkbook, accounts payable, and copays from patients.

In what I suspect the doctor now sees as folly, Ms. Zehrung was paid a bonus if the firm did well.

Shortly after she took over the billing, the firm's monthly revenues went up 33%. The good doctor asked her why they were making so much more money all of a sudden. Ms. Zehrung said she was simply working back accounts receivable.

The doctor accepted this explanation. I'd like to think he drove off in a new sports car after hearing it.

Later, the doctor thought the continued increase was as a result of laser hair removal procedures that they had started doing.

As it happens, Ms. Zehrung was not just working the receivables. And, doubtless there's money to be made in laser hair removal, but that's not how the money in this office was being made.

It was, instead, being made through simple upcoding.

Ms. Zehrung would take the doctor's notes about what had been done, then she would submit bills for procedures that paid more.

Also, she would destroy some of the records that showed what was actually done.

Finally, the doctor was alerted by a nurse who spotted the problem. I'd like to think he was reached by the nurse on his cell phone, while he was sitting beachside drinking something with an umbrella in it.

He asked Ms. Zehrung to explain herself. Eventually, he made a serious of calls that wound up with Ms. Zehrung being arrested, charged, and pleading guilty to healthcare fraud.

At sentencing, there was, apparently, only one disputed issue - whether Ms. Zehrung should be subject to an abuse of position of trust enhancement.

The government said she should - she abused the good doctor's trust. He trusted her and she betrayed that trust.

She said she shouldn't - the enhancement is normally appropriate for folks who have some special skill with discretion, like a lawyer, who abuses the trust that comes with that skill.

It's clear that, say, a bank teller who embezzles is not eligible for an abuse of position of trust enhancement.

So, was Ms. Zehrung's trust anything more than one finds in a run of the mill employee - someone who is trusted to do an important job in a small business?

The district court applied the enhancement. As the court of appeals explained, the court reasoned:

She did the billing with "no supervision," the judge added - "[t]here was no direct oversight, no review," he repeated again - and "she assumed complete financial control within the office." And, the judge suggested, her position made it significantly easier for her to commit the crime charged.

The First Circuit reversed and remanded for more factfinding. These remarks, it concluded, were not enough to explain whether the enhancement was justified.

This case is a nice slalom through the different ways the abuse of position of trust enhancement can apply. And it's a lovely read.

January 25, 2013

Health Care Fraud Restitution Amounts Can't Be Set On Just An Insurance Company Saying It Would Like A Lot Of Money

Two doctors, married to each other, were accused of health care fraud. They pled guilty and fought at sentencing about the amount of the restitution that they would have to pay back to the insurance companies for what they did. And, in United States v. Sharma, the Fifth Circuit held that a district court can't just make up a restitution number.

Dr. Arun Sharma and Dr. Kiran Sharma ran two pain management clinics in Texas.

1028452_syringes_and_vial.jpgAt these clinics, the Doctors Sharma would give pain injections to patients. The health care fraud involved "paravertebral facet-point injections."

I have no idea what those are, but they sound really unpleasant. Happily for the Sharma's patients, many of the injections which were billed never happened. Though, that the injections never happened was not so happy for the insurers or, ultimately, the Sharmas.

Instead, two things would happen. First, sometimes a cheaper faster (and, I imagine, easier for the patient) "tigger point injection" would be given. The doctor would then "upcode" the injection as a paravertebral facet-point injection, since that injection pays more.

If you've ever done a health care fraud case, you know that upcoding is a huge deal.

Then, second, sometimes the doctors would simply create phantom bills for injections that never happened.

The Sharmas were indicted for 64 counts of conspiracy, health care fraud, mail fraud, money laundering, and unlawful distribution of controlled substances. They ultimately pled guilty to one count of conspiracy and one count of health-care fraud.

The big issue at sentencing was restitution. In their plea agreements, the Sharmas agreed that the district court would determine the restitution amount and that they would do what they can to pay it.

Though, in an atypically compassionate move, the government agreed to place $1,500,000 of the money that the Sharmas had received in an educational trust for their son.

Before sentencing, a probation officer prepared a Presentence Report. The PSR determined that the loss amount was $43,318,170.93 and that the Sharmas should pay restitution in that amount. It was not a coincidence that the $43 million amount was submitted by the insurance companies.

The Sharmas hired a forensic accountant and submitted an alternative restitution figure. The accountant backed out losses that the insurance company said were the result of procedures other than injections - like the allergy treatments that Kiran Sharma provided which were undisputedly legitimate.

The accountant also said that the losses on the upcoded procedures was done incorrectly - the loss should be the difference between the procedure that was done and the procedure that was billed for. It should not be just the cost of the procedure that was billed for.

The account calculated the loss at $21,028,963.61. Which is still not chump change, but it's a lot lower than the $43 million.

The district court rejected the accountants work, accepted the insurance companies' number, and ordered restitution of $43 million.

The Fifth Circuit reversed. Noting that "excessive restitution awards cannot be excused by harmless error; every dollar must be supported by record evidence," the court of appeals said that "[b]y . . . directly incorporating the amounts from the victim impact statements into the PSRs as actual losses, the Probation Office went astray."

The Fifth Circuit picked out three examples of victim impact statements that were pretty egregious:

One insurer, Tricare, claimed as loss all of its payments to the Sharmas dating back to 1997. Inasmuch as the charged conspiracy did not begin until 1998, however, the 1997 payments plainly do not constitute actual losses under the MVRA.18 A second insurer, Texas Amerigroup, reported that it paid the Sharmas $650,775.01 for injections, out of a total of $929,884.55 paid to them for all treatments. Yet the Probation Office listed the larger figure, the one for total payments, as actual loss instead of listing only the lesser amount that the insurer paid for injections. This too overstates the insurer's loss by including payments not caused by the specific convictions.19 A third insurer, Principal Life Insurance, attached a spreadsheet of all of its payments to the Sharmas, but expressly stated that it was "not sure which claims relate to the guilty plea." The Probation Office nevertheless reported all of those payments as actual loss.

The case was sent back for the district court to recalculate the amount of restitution that the Sharmas owe.

January 2, 2013

Telling People They Can Use A Drug In A Way Different Than How The FDA Says They Can Use A Drug Is Not A Crime, Says the Second Circuit

Alfred Caronia was a sales rep for a pharmaceutical company. And, despite what you might think by reading some of the literature, being a pharmaceutical sales rep is not a crime. It's even more emphatically not a crime after the Second Circuit's opinion in United States v. Caronia.

1213599_pills.jpgPart of Mr. Caronia's job was to encourage folks to buy Xyrem.

According to the Second Circuit,

Xyrem's active ingredient is gamma-hydroxybutryate ("GHB"). GHB has been federally classified as the "date rape drug" for its use in the commission of sexual assaults.

Despite Xyrem's dark side, it was approved by the FDA for two uses for folks with narcolepsy.

Mr. Caronia's company thought that perhaps doctors should be prescribing it for an even greater assortment of problems.

Mr. Caronia's job, in part, was to find doctors who would talk to other doctors about the benefits of Xyrem's FDA-approved uses. The doctors did not provide this service for free.

One of the doctors who worked with Mr. Caronia was Dr. Peter Gleason.

And, by way of background - it's ok for a doctor to prescribe a drug for a use that isn't on the label. The FDA doesn't want to get between a doctor's relationship with her patient, even on off-label uses of prescription drugs.

At the same time, it's a crime to "misbrand" a regulated drug. A drug is misbranded if:

its label is false or misleading; the label fails to display required information prominently; its container is misleading; or it is dangerous to health when used in the dosage, manner, frequency, or duration prescribed, recommended, or suggested on the label.

The Wire

The federal government started investigating Dr. Gleason for promoting an off-label use of Xyrem.

The feds wired up a cooperator. The cooperator was another doctor, who called Mr. Caronia and asked about an off-label use of Xyrem.

Mr. Caronia, as only a man paid on commission can, talked up the benefits of the drug for many kinds of maladies - insomnia, Fibromyalgia, restless leg, Parkinsons, chronic fatigue, chronic pain, and MS.

He also said it will make you lose weight without dieting or exercise. [that was a joke]

These statements - and other related ones - got Mr. Caronia indicted for conspiracy to commit misbranding.

Indicted For Aggressive Sales

Mr. Caronia said that he was being indicted for commercial speech. There's a line of cases from the Supreme Court that say that even commercial speech is protected by the First Amendment.

The district court agreed. As the Second Circuit said,

The court observed that "the criminal information . . . allege[d] Caronia's promotion of off-label uses of an FDA-approved drug," and concluded that Caronia stood charged with a crime the actus reus of which was First Amendment speech.

But, the district court concluded that the prohibition on commercial speech is reasonably tailored to the objectives of the Food Drug and Cosmetic Act. So it's ok to charge people criminally for this First Amendment activity.

Mr. Caronia went to trial and was convicted.

The Second Circuit

One big question running through the appeal is whether Mr. Caronia was charged with a crime based on his speech - as the district court determined - or whether he was charged with misbranding and his speech was used as evidence of his other acts that were criminal.

The Second Circuit went through the trial testimony and found that the government's theory here was that Mr. Caronia violated the law by his speech.

So, the government is prosecuting Mr. Caronia's speech. Is that ok?

That's really two questions - first, is Mr. Caronia's conduct covered by the statute and, second, if his conduct is covered by the statute, does it violate the First Amendment.

The Second Circuit let that second question answer the first:

under the principle of constitutional avoidance, . . . we construe the FDCA as not criminalizing the simple promotion of a drug's off-label use because such a construction would raise First Amendment concerns. Because we conclude from the record in this case that the government prosecuted Caronia for mere off-label promotion and the district court instructed the jury that it could convict on that theory, we vacate the judgment of conviction.

So, according to the Second Circuit, promoting the off-label use of a drug is not a crime under the statute. If it were, the courts would have to think about whether such a statute is constitutional.

December 19, 2012

The Eleventh Circuit Discusses When The Government Can Take Your Wife's Stuff To Make Resitution For A Crime You Committed

When a person is convicted of a federal crime, especially in a fraud case, but in lots of other kinds of federal criminal cases too, the district court sometimes also orders that the person pay restitution.

The point of restitution is that the person has to pay back any money that they took - they have to make any victims of the crime whole again.

To satisfy a restitution judgment, the federal government can go try to get that money from assets that a person has - they can go after bank accounts and retirement accounts and houses.

A frequent question many folks have is whether they can also go after property that a person jointly owns with his or her spouse.

The Eleventh Circuit recently opined on how this works in United States v. Duran.

Duran Duran

Lawrence Duran and Carmen Duran were married.

Then Lawrence Duran was convicted of participating in a conspiracy to defraud Medicare. As a part of his sentence, he was ordered to pay restitution of more than $85 million. He was also sentenced to 50 years in prison.

1389190_new_york.jpgBefore Mr. Duran's legal troubles, he owned an apartment with Mrs. Duran in New York City.

The Durans divorced before Mr. Duran was sentenced. In the divorce, it appears that Mrs. Duran was given sole title to the New York apartment.

Hungry Like The Wolf

After Mr. Duran was sentenced, the government wanted its $85 million. It applied for a writ to execute the restitution judgment. In the application for the writ, the government said that the apartment was a substantial asset that it should be able to collect.

When the prosecutors applied for the writ of execution, they told the court that they were serving it by using the district court's electronic case filing system. By filing it, in other words, it would be sent electronically to any attorney who had filed a notice of appearance in the case.

Because Carmen Duran wasn't a lawyer involved in the case - and didn't have a lawyer in the case - she didn't get a copy of the motion asking for a writ.

The Reflex

Getting an application from the government, though, caused the Court to approve the application for a writ. The writ ordered the Marshals Service to satisfy the judgment against Lawrence Duran by "levying on and selling" the apartment.

Carmen Duran filed a motion to dissolve the writ and not have her apartment sold. She said she was an innocent owner of the apartment who deserved an evidentiary hearing. Mrs. Duran said that she got half the apartment in the divorce anyway.

The government opposed Mrs. Carmen's motion, saying that she could get half of whatever they collected when the Marshals sold it. They said that their judgment lien had priority over Mrs. Duran's unrecorded claim.

When you look at the property records of New York, apparently, the apartment is listed as jointly owned by both Durans.

It seems that Mrs. Duran's divorce lawyer failed to record the new deed that showed she owned the apartment alone.

So Misled

The district court said it didn't have jurisdiction to hear the claim. If Mrs. Duran wants to challenge this, the district court's view was that the right place for a property dispute in New York was a state court in New York.

Mrs. Duran appealed.

The Eleventh Circuit started by looking at the Fair Debt Collections Act - the statute that the government has to use to collect a restitution judgment.

As the Eleventh Circuit explained,

The Act limits the authority of the United States to levy against jointly-owned property. The United States may levy "property which is co-owned by a debtor and any other person only to the extent allowed by the law of the State where the property is located." Id. § 3010(a). With regard to levying against property under a writ of execution, "[c]o-owned property [is] subject to execution [only] to the extent such property is subject to execution under the law of the State in which it is located." Id. § 3203(a).

The Act also says the government has to give notice to any co-owner or any other person with an interest in the property before they can take it. And the government has an affirmative burden to look for people who might have an interest.

Most importantly, the Eleventh Circuit said,

The Act obliges a district court to adjudicate any contested ownership interests in property subject to a writ of execution. The Act provides that the United States may levy only property in which a judgment debtor has a "substantial nonexempt interest." Id. § 3203(a). To that end, the district court must determine whether the debtor has any ownership interests in the property, and the district court must determine the ownership interests of any person who moves to dissolve or modify any writ.

So, all ended well for Mrs. Duran - except as to her ex-husband's fifty year prison sentence.

The Eleventh Circuit directed that

On remand, the district court must determine the respective ownership interests, if any, of Carmen and Lawrence in the apartment when the United States obtained the writ of execution and whether Lawrence had a "substantial nonexempt interest" in the apartment that the United States could levy.
January 18, 2012

Health Care Billing Fraud In The Bayou

Medicare is a huge federal program. It's also a huge source of criminal liability for doctors and other health care providers, as they try to comply with the byzantine regulations for billing issued by the Centers for Medicare and Medicaid Services.

Take United States v. Jones as an example.

1334532_ambulance.jpgStatewide Physical Medical Group

Telandra Jones and Theddis Pearson started a health care company with a few other people. It was called Statewide Physical Medical Group. The state that it was wide was Mississippi.

Mr. Pearson was the CEO. Ms. Jones handled the billing remotely, from Dallas, Texas.

Statewide's patients were first evaluated by a doctor to see if they needed therapeutic exercise. If they did, and the doctor ordered it, Statewide would send a person to the patient's home.

The people who were sent were kinesiotherapists. These therapists provided care at the patient's home without a doctor present.

Medicare's Rules for Physician Supervision

The rub is that Medicare's billing regulations require that a doctor supervise a kinesiotherapists' work. And, for Medicare billing, while, "supervise" doesn't mean that the doctor is in the same room, it generally means that the doctor is in the same building and can come in and help if need be.

If that's the definition, then Statewide's kinesiotherapists were not supervised by physicians.

So, it looks like the therapeutic work that Statewide submitted bills for did not comply with the Medicare billing regulations. Which is a pleasant way of saying that Statewide's bills may have been fraudulent.

There was one saving possibility for Statewide's billing practices - there is an exception to the direct supervision rule for people in certain kinds of underserved areas and for home treatments with other kinds of home health benefits under Medicare had been exhausted. If this exception applied, then there was an exception to the physician supervision requirement. If there was an exception to the physician supervision requirement, then there was no Medicare fraud!

Ms. Jones and Mr. Pearson relied on this provision.

At trial, the government presented evidence that the Statewide's interpretation was untenable, in the form of an expert about Medicare billing.

It looked like maybe Statewide has an argument there. The trouble, however, was that Statewide billed more for the task than for the amount of time it spent.

The government's Medicare billing expert explained to the jury that Statewide's billing practices caused treatments that took an hour to be billed as taking ten hours.

That's never going to look good to a jury.

Who Knew What When

The question then, turned on whether Ms. Jones and Mr. Pearson knew that they were submitting fraudulent bills. The process for sending bills in was a little complicated. First a secretary in an office - there were seven - would collect the therapists' treatment records and enter that data into a billing sheet.

The therapists did not keep records of how much time they spent, just what treatments they performed.

These billing sheets were then sent to Ms. Jones in Dallas, who turned them into bills to Medicare, based on the part of the body that was treated, instead of the amount of time that the treatment took.

Mr. Pearson was the CEO and generally managed the day-to-day affairs of the company, including its billing systems.

The Medicare Fraud Indictment

Mr. Pearson and Ms. Jones were charged with conspiracy to commit Medicare Fraud, Medicare Fraud, theft of government funds, health care false statements, and money laundering.

The jury convicted Ms. Jones because she was the one who submitted these bills to Medicare. There was evidence that Mr. Pearson was in the weeds with the business - he was convicted for also having the requisite knowledge.

Mr. Pearson was convicted of making false statements relating to health care. Both Mr. Pearson and Ms. Jones were convicted of theft of government property and health care fraud.

The Jury Verdict Form

To make a false statement in violation of 18 U.S.C. § 1035, a person has to make the false statement knowingly and willfully." It isn't enough if the person makes a mistake and submits false information - the statement has to be a lie.

So, we don't send people who make math errors to prison. It's only if the math errors are made on purpose - so they aren't really math errors, as such - that the person makes the willfully false statement.

In Mr. Pearson's case, the jury verdict form did not use the legal standard for what the person charged with the crime had to know from section 1035. Rather, the jury was told that they could convict if they found that Mr. Pearson

"knew, or should have known, that the services billed by [Statewide], were not provided by a physician or under the direct supervision of a physician, as required by Medicare."

This jury instruction is much weaker than what the statute requires. If a person "should have known" that 2+2=4, but puts 5 when adding 2 twice, she meets this standard. And that's not what section 1035 allows.

As a result, Mr. Pearson's conviction was reversed and sent back for a new trial.

Related Posts:

October 6, 2011

The Eighth Circuit Holds That Health Care Kickbacks Are Different Than Fraud

Medical supplies are big business. Sadly, where there's big business, there's big money, and, often, there's big law enforcement attention.

Geff Yielding worked as an assistant for a surgeon, Dr. Jordan, in Little Rock Arkansas. His wife, Kelley, started a company called ANI, that was in the medical services business. She became a sales agent for two bone-related medical supply companies. As such, she was paid on commission based on the number of sales she generated to surgeons.

Dr. Jordan used a nurse named Jordan Wall to order his supplies. Mr. Wall was an employee of the hospital where Dr. Jordan practiced.

Between February 2003 and October 2004, Kelley Yielding earned $384,000 in commissions. Her company, over the same period, wrote twenty-two checks to Jordan Wall.

One suspects that those checks may have been, uh, fishy.

A side note about health care kickbacks - in the world of medicine, paying someone for using your medical service or supplies is illegal. It's a violation of the Stark Act. In many businesses, paying for referrals is legal, indeed, de rigueur. In medicine when you're dealing with Medicare or Medicaid, a kickback is a crime. It's codified at 42 U.S.C. § 1320a-7b.

In 2004, Jordan Wall was fired by the hospital because there appeared to be improprieties in the way he ordered the products sold by Kelley Yielding - the hospital thought they didn't need one of the products, yet Mr. Wall ordered it anyway.

Also, creepily enough, more than one hundred pieces of bone were missing from the hospital's bone inventory. It isn't clear how this is related, but the Eighth Circuit's opinion notes it.*

Three days after Mr. Wall was fired, Dr. Jordan forwarded an email he received from the hospital about how the hospital was still investigating suspicious and unnecessary purchases of the products that Kelley Yielding sold.

The hospital was also still investigating the missing bone.

Three days later, Jordan Wall paid ANI, Kelley Yielding's company, $34,000, the exact amount he was paid in 2004. The repayment was labeled "repayment on loan."

The FBI investigated, searched the Yielding's house, and found a document purporting to be a note. The note said it was for a no interest loan to Jordan Wall from ANI, Kelley Yielding's company.

While the investigation was happening, Kelley Yielding died.**

Jordan Wall pled and flipped. He said that Geff Yielding arranged kickbacks for the products his wife sold and created a fake note to cover their tracks after the investigation started.

Mr. Geff Yielding was indicted and convicted for the kickback scheme and creating a false document to obstruct justice. He was sentenced to 78 months in prison, or six and a half years.

It isn't clear if anyone was ever prosecuted for the missing bone.

The Eighth Circuit, in United States v. Yielding, reversed for resentencing because the sentencing court miscalculated the United States Sentencing Guidelines.

Mr. Yielding was convicted of participation in a kickback scheme. So the court should have used sentencing guideline § 2B4.1. Like many white-collar crime guidelines, § 2B4.1 looks to the amount of money at stake to determine how serious the crime is.

Unlike many white-collar crime guidelines, § 2B4.1 does not look at the loss caused by the crime, rather, it looks to the size of the bribe (or kickback) or the profit made from the bribe (or kickback).

The sentencing court looked at the loss to the purchasers who bought the unneeded bone products, rather than the value of the commissions that the Yieldings received, or the amount of the kickback that they offered.

So, the guidelines were miscalculated - bribery has very different rules than fraud.

As a result, Mr. Yielding's case was remanded for resentencing, presumably with a much lower guidelines range at the end.

For additional news coverage, check out the Times Record from Arkansas.

* Did you know hospitals keep bone stockpiled? Me neither.

** It's not explained how she died in the opinion, though I'd like to know if it was related to it. Or caused by stress from it?

August 24, 2009

Learning From An Obstruction of Justice Plea in a Health Care Fraud Investigation

There's a story out of Connecticut that I find particularly troubling; a woman has entered a guilty plea to obstruction of justice after lying to federal agents in a health care fraud investigation. To my mind, obstruction of justice charges have one cause - failing to hire a lawyer when you need one.

Too many people think they can go it alone in a federal investigation and wait to hire a lawyer. This is a mistake. To be sure, there are drawbacks to hiring a lawyer - lawyers are expensive, they take time, they tell you things you may not want to hear. But they also can advise you how to act when you, or someone you know, is caught up in an investigation.

The woman in this story said she lied about whether a patient signed an admissions form. One may think that some folks are liars and some folks aren't and that hiring a lawyer won't make a difference. I disagree. A good lawyer can intelligently explain why lying is a remarkably bad strategy when you're caught up in an investigation.

Moreover, most folks who are going to lie, lie when someone is talking to them. Hiring a lawyer early is an excellent way to make sure that you have to do the least amount of unaccompanied talking possible. And reducing the amount of your unaccompanied talking is a good way to reduce your exposure to an obstruction of justice charge.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

August 7, 2009

The Health Care Fraud Sting Continues

Sorry to have been off line recently; technical updates have been happening. All in an effort to give you a better Kaiser blog experience.

Doctors cannot bill Medicare for holding a stethescope up to the air, it has to be used to evaluate a patients health.

I wanted to quickly note that the New York Times ran an AP article last week revealing that the health care fraud prosecutions are continuing. Thirty more people have been rounded up and arrested, allegedly for committing Medicare Fraud.

The article says that doctors were giving "arthritis kits" that consisted of heating pads and braces. And that was just for the lucky ones who got a kit.

Apparently Eric Holder and Kathleen Sebelius remain eager to prosecute health care providers.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 22, 2009

How Not to Respond to a Grand Jury Subpoena

The Eleventh Circuit recently decided a case that highlights why responding to a grand jury subpoena needs to be taken seriously. The case is United States v. Hoffman-Vaile. As a teaser, a doctor is going to prison for longer than she should because of how she handled a grand jury subpoena.

In the case, a doctor, Dr. Hoffman-Vaile, was being investigated for upcoding a series of dermatological procedures. Basically, the doctor was billing Medicare for a surgical procedure called "an adjacent tissue transfer or rearrangement that measures more than 30 square centimeters and is unusual or complicated." This procedure was billed under code 14300.

The government's suspicion was that Dr. Hoffman-Vaile using the billing code 14300, but, in fact, she was do a simpler dermatological procedure, with a different billing code. Telling Medicare that you're doing a procedure that pays better than the one you're actually doing is called "upcoding," and it's one form of medical billing fraud.

Health and Human Services began investigating Dr. Hoffman-Vaile when it noticed that she used billing code 14300 more times than any other code, and that she used billing code 14300 more than any other doctor in Florida in 1998 or 1999.

These are bad facts. The way Dr. Hoffman-Vaile responded, though, made them much worse. The Inspector General of Health and Human Services raided the doctor's offices with a search warrant. They found files were missing. They then issued a grand jury subpoena asking for those missing files and any accompanying photographs.

Unfortunately, it appears from the opinion that Dr. Hoffman-Vaile directed her employees to strip the files of the photographs before she sent them to the government to satisfy the grand jury subpoena. Since one of the issues about whether code 14300 is proper is the size of the affected area in the procedure, it matters what the photos show.

Dr. Hoffman-Vaile was then indicted for both health care fraud and obstructing justice for stripping the files. She was convicted and sentenced to five years in prison.

I have represented many clients in fraud cases. Basically, the issue is whether your client is a liar. It is really hard to argue that your client is not a liar if the government has evidence that your client tried to lie to the prosecutors, agents, or grand jury during the investigation. That is why a grand jury subpoena has to be looked at very carefully and responded to with the same amount of care.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

July 14, 2009

The Government Is Coming After Health Care Providers

The Department of Justice and Department of Health and Human Services have announced a massive joint effort to prosecute health care fraud. The press release details an indictment against fifty-three people across the country.

And there is other health care fraud news around the country. Just today, a surgeon was charged in New Jersey, and a doctor who runs three clinics was indicted in Illinois. Last week, forty-two people were arrested in California on health care fraud charges. Health care fraud is a hot law enforcement priority.

I've represented people being investigated for health care fraud charges, and I've represented people charged with crimes related to health care fraud. These prosecutions and investigations are tricky for defense lawyers. They routinely require defense counsel to investigate the details of Medicare regulations in order to effectively represent their clients.

In addition to focusing on the specific regulations at issue, one good thing to look at is what evidence of fraudulent intent is there. I have found that not infrequently law enforcement agents, even federal law enforcement agents, focus on whether a statement on a form is true or false, without focusing on whether the person made the statement with the specific intent to defraud.

Obviously, a crucial part of this is how forms are processed in a health care provider's office. A carefully crafted claims process may be the best defense that a health care professional has against a criminal charge. Conversely, a process for filing Medicare claims that is sloppy or, worse, absent, can make a defense lawyer's job harder.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.