FRAUD

1. Pharmacy: A NJ pharmacist, with a compounding pharmacy in Lakewood, NJ, pleads guilty to charges of conspiracy to violate the Anti-Kickback Statute (by paying more than $50,000 to a middle person to bribe physicians for referring pain cream prescriptions) and to committing healthcare fraud (by falsely representing the pain cream, which was not covered by many insurance companies including Medicare, as another medication in order to obtain reimbursement). The original complaint was filed by the U.S. Attorneys Office, District of New Jersey, in January 2014. Sentencing is scheduled for 1/20/2015 and carries a maximum penalty of five years in prison, $250,000 fine, and forfeiture of any proceeds derived from his offense. (United States of America v. Vladmir Kleyman, aka Pinchas Kleyman)

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FRAUD

1. Two Whistle-Blower suits, under the False Claims Act, were brought by private citizens on behalf of the United States against Extendicare Health Services Inc, a corporation that operates 146 skilled nursing facilities. The actions alleged that Extendicare billed Medicare and Medicaid for materially substandard nursing services including insufficient staffing, inadequate catheter care and failure to follow appropriate protocols to prevent pressure ulcers and resident falls. The action further alleged that Extendicare billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services. Extendicare agreed to pay $38 million in settlement and to enter into a 5 year Corporate Integrity Agreement with HHS-OIG. According to HHS-OIG, this is the department’s largest failure of care settlement with a chain-wide skilled nursing facility to date. See Justice News, U.S. Department of Justice, Office of Public Affairs, October 10, 2014; U.S. ex rel. Lovvom v. EHSI, et. al. C.A. 10-1580 (E.D. Pa) and U.S. ex rel. Gallick et al., v. EHSI et al., C.A. 2:13cv-092 (S.D. Ohio).

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I. FRAUD

Health and Human Services issued a proposed rule on 10/03/2014 entitled “ Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil Monetary Penalty Rules Regarding Beneficiary Inducements and Gainsharing”. The proposed rule will amend 42 CFR 1001.952 (Anti-Kickback Statute & Safe Harbors) by adding new protections, including:

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FRAUD

1. Two Detroit-area residents were arrested and charged with conspiracy to violate the Anti-Kickback Statute because of their alleged role in recruiting and referring Medicare beneficiaries to two Detroit-area home health agencies in exchange for monetary consideration. This case was investigated and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. See Justice News, Department of Justice, Office of Public Affairs: http://www.justice.gov/opa/pr/two-defendants-charged-connection-detroit-area-home-health-kickback-scheme

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