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Health Care Fraud

     The U.S. Attorney’s Office places a high priority on criminal and civil enforcement in cases involving health care fraud and unauthorized health care benefits payments, as well as related activities such as fraud against the elderly and prescription drug fraud. The office works on these matters with the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigation, the Internal Revenue Service, the Drug Enforcement Administration, the Food and Drug Administration (FDA), the Office of the Pennsylvania Attorney General, District Attorney’s Offices within the Middle District, the Pennsylvania Department of State and the NEPA Insurance Fraud Task Force.

     Anyone with information concerning suspected health care fraud or irregularities should contact the HHS-OIG at 1-800-HHS-TIPS (1-800-447-8477) and/or the U.S. Attorney’s Office at 717-221-4482, attention Assistant U.S. Attorneys Kim Douglas Daniel (Criminal) or Anthony Scicchitano (Civil), Health Care Fraud Coordinators.

Recent Cases And Settlements

Criminal prosecutions

Cheryl Floyd

     On April 15, 2015, a criminal Information was filed in U.S. District Court in Harrisburg charging Cheryl Floyd, age 52, Harrisburg, owner of Floyd Nutrition LLC, with introducing misbranded drugs into interstate commerce and money laundering.

     Floyd, also known as Cheryl Floyd Brown, is owner and operator of an internet-based business known as Floyd Nutrition LLC, based at her Harrisburg residence and warehouse facilities in the Harrisburg area.

     The items offered for sale between 2010 and 2014 were allegedly purported all-natural dietary supplements sold as weight loss products. They allegedly contain the drugs sibutramine and phenolphphthalein which are not listed as ingredients in the product labels.

     According to U.S. Food and Drug Administration (FDA) sibutramine was the active pharmaceutical ingredient in Meridia, a prescription weight loss drug removed from the market in 2010 following studies that showed increased heart attack and stroke in the studied population. Phenolphphthalein was an over-the-county drug until 1999 when FDA reclassified it as not generally safe because it posed a carcinogenic risk.

     The FDA has detained shipments of the products coming from China intended for Floyd’s business. In July 2014, search warrants executed at locations used by Floyd’s business resulted in seizure of a large quantity of the products. The products were sold over the internet under the names such as Slim Trim U, ZXT Slim Bee Pollen, Magic Slim, ZXT Bee Pollen, ZXT Gold Infinity, Lean Body Extreme, Bnew Beauty and Body and Natural Body Solutions.

     Akeia Conner, Internal Revenue Service, Criminal Investigation, Special Agent in Charge, said “When individuals knowingly sell misbranded drugs to the general public and generate significant profits from these sales, IRS Criminal Investigation will diligently work with our fellow law enforcement partners to dismantle the operation and trace the proceeds of the criminal activity, which in this particular matter where seven properties valued at over $2,000,000.”

     "The manufacturing and selling of products marketed as all natural dietary supplements that actually contain dangerous pharmaceutical ingredients places consumers at risk of serious injury or death," said Antoinette V. Henry, Special Agent in Charge, FDA Office of Criminal Investigations' Metro-Washington Field Office. "FDA OCI will continue working with the Department of Justice to protect consumers from public health risks and fraud and commends the USAO MDPA and our law enforcement partners for the resolve and commitment they demonstrated in investigating and prosecuting this case."

     Health care professionals and patients are encouraged to report adverse events or side effects related to the use of these products to the FDA's MedWatch Safety Information and Adverse Event Reporting Program: Complete and submit the report Online: www.fda.gov/MedWatch/report.htm - download the form or call 1-800-332-1088 to request a reporting form, then complete and return to the address on the pre-addressed form, or submit by fax to 1-800-FDA-0178.

     The criminal Information also charges Floyd with money laundering of the proceeds of the sales of the misbranded products and the government is seeking forfeitures of properties in Harrisburg owned by the defendant, a truck, and nine bank accounts.

     The government filed a plea agreement with the defendant that included an agreement to forfeit the properties listed in the criminal Information. The agreement is subject to the approval of the U.S. District Court.

     This case was investigated by the FDA Office of Criminal Investigations, Internal Revenue Service Criminal Investigations, and the Dauphin County Drug Task Force. It is assigned to Assistant U.S. Attorney Christy H. Fawcett.

     Introduction of misbranded drugs in interstate commerce carries a maximum penalty of three years’ imprisonment, a $10,000 fine, and a one-year term of supervised release. The maximum penalty for conducting financial transactions with criminally-derived property in excess of $10,000 is 10 years’ imprisonment, a $250,000 fine, and a three-year term of supervised release.

     Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

Beverly Hannibal

     Beverly Hannibal, age 48, formerly of Williamsport, but now living in Lancaster, was indicted by a federal grand jury in Williamsport on November 13, 2014 for health care fraud in connection with a Medicaid program.

     The indictment alleges that Hannibal fraudulently obtained $22,448 from the Pennsylvania Medicaid Home and Community Based Services Attendant Care Program, a federally funded health care benefit program.

     Hannibal allegely submitted false and fraudulent applications identifying her nephew and, later in the scheme, a friend of hers, as direct care workers providing personal assistance to her.  Although they performed no work, Hannibal allegedly prepared false timesheets reporting hours purportedly worked by them, forged signatures on the timesheets, and then submitted them for payment.  The indictment alleges that Hannibal received reimbursement checks and had her nephew cash some of them and give her the proceeds, and that she also forged signatures on the checks and transacted them.

     Hannibal appeared before Chief Magistrate Judge Martin C. Carlson on November 20, 2014 and was released on bail.  Trial is scheduled for June 22, 2015 before United States District Court Judge Matthew W. Brann in Williamsport.

     If convicted of the health care fraud charge, Hannibal, faces a maximum penalty of 10 years in prison, a fine of $250,000 million, and a supervised release term of three years.

     The case was investigated by the Office of Inspector General, U.S. Department of Health and Human Services and the Federal Bureau of Investigation.  Prosecution has been assigned to Assistant United States Attorney George J. Rocktashel.

Edward Evans

     Edward Evans, age 50, of Wernersville, PA, was charged on November 19, 2014 in a one-count felony information with health care fraud based on the submission of false claims to the Pennsylvania Attendant Care Medicaid Waiver Program.  The information alleges Evans’ billed for and received reimbursement for attendant care services which were never performed.

     The investigation which is ongoing is being conducted by the U.S. Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation, and the Pennsylvania Attorney General’s Medicaid Fraud Control Section.  Assistant United States Attorney Wayne P. Samuelson is assigned to prosecute the case.

Andrew Newton

     Dr. Andrew Newton, age 42, a psychiatrist with an office in Mt. Carmel was charged on November 14, 2014 in a six-count Information with false billings for psychotherapy services.  Newton is currently a Harrisburg resident. It is alleged that between August 2010, and November 2011, Newton billed Medicare for face-to-face therapy sessions when he was in fact out of the country.

     The government also filed a plea agreement in the case which is subject to approval of the Court.  In March 2014, Newton was sentenced to two years probation and 80 hours of community service and was ordered to pay $94,539 in restitution.

     The investigation was conducted by the U.S. Department of Health & Human Services, Office of Inspector General, and the Federal Bureau of Investigation – Williamsport office.  Assistant United States Attorney Wayne P. Samuelson is assigned to prosecute the case.

Maria Giacalone-Hewson

     A Canadensis chiropractor was sentenced on November 6, 2014, in federal court in Scranton, by United States District Judge Robert Mariani, to serve 15 months in prison on charges of aiding the preparation and filing of a false federal income tax return and false statements relating to healthcare matters.

     Dr. Maria Giacalone-Hewson, age 43, a resident of Canadensis who operated Canadensis Healthcare, Inc., pleaded guilty to the tax and fraud charges in September of 2013.

     A criminal Information was filed against Giacalone-Hewson on July 15, 2013.  The charges against her arose from the filing of a 2006 federal income tax return that falsely claimed her taxable income was $89,754, when, in fact, she had taxable income of $1,151,928, and owed at least $363,566 in taxes for that year.  Giacalone-Hewson was also held accountable at sentencing for taxes of $113,821 that she owed for tax years 2007 through 2010.

     The criminal Information to which Giacalone-Hewson pleaded guilty also charged her with making false statements relating to healthcare matters.  At the time of her guilty plea, Dr. Giacalone-Hewson admitted that she made false statements in connection with payment for health care benefits by submitting false written statements claiming that chiropractic and other services were provided to certain patients when no such services were in fact provided.

     In addition to the prison term, Judge Mariani ordered that Giacalone-Hewson be supervised by a probation officer for three years following her release from prison.

     The investigation was conducted by the Internal Revenue Service Criminal Investigation, the United States Secret Service and the Northeastern Pennsylvania Insurance Fraud Task Force.  The case was prosecuted by Assistant United States Attorney William S. Houser.

Ronald McAdams

     On Augut 26, 2014, a criminal charge of health care fraud was filed against Ronald McAdams of Williamsport, Pennsylvania.

     McAdams, age 57, was charged in a one-count felony Information with health care fraud based on submitting false claims to the Pennsylvania Attendant Care Medicaid Waiver Program.  McAdams billed for and received reimbursement for attendant care services which were never performed.  On March 18, 2015, McAdams was sentenced to six months imprisonment and was ordered to pay $9,900 in restitution.

     The investigation is being conducted by the U.S. Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation, and the Pennsylvania Attorney General’s Medicaid Fraud Control Section.  Assistant United States Attorney Wayne P. Samuelson is assigned to prosecute the case.

John Terry

     A Tioga County physician was charged with unlawful distribution of controlled substances and health care fraud.  Three other individuals are also charged in an indictment returned August 19, 2014 by a federal grand jury in Scranton.

     The indictment charges John Terry, age 63, and Thomas Ray, age 51, both of Wellsboro, Pennsylvania, with Possession with Intent to Distribute a Controlled Substance and Health Care Fraud.  It also charges David Hatch, age 27, Addison, New York, and Stephen Heffner, Jr., age 46, Elkland, Pennsylvania, with health care fraud.  The defendants allegedly aided and abetted each other in a scheme to obtain benefits from a health care program by false and fraudulent pretenses.

     Terry, Hatch and Heffner, Jr. were released after a hearing on August 21 in Williamsport before Magistrate Judge William I. Arbuckle, III.  Ray is in state custody on other charges.

     Beginning January 2010 through July 2013, Terry allegedly provided prescriptions for excessive quantities of Oxycodone and other narcotics to individuals who he knew were not seeking the drugs for a legitimate medical purpose.  Terry also allegedly wrote prescriptions for narcotics for individuals who were not his patients, knowing that the federal Medicare program was going to be billed for the unlawful prescriptions.

     During the execution of a federal search warrant at his office on July 8, 2013, Terry voluntarily agreed to surrender his medical license and his DEA registration.

     Trial is currently scheduled for July 6, 2015.

     Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.

     The charges stem from an investigation by Drug Enforcement Administration, the Department of Health and Human Services, Office of Inspector General, and the Pennsylvania State Police.

     "We rely on doctors to be part of the prescription drug abuse solution – not part of the problem,” said Nick DiGiulio, Special Agent in Charge for the Inspector General’s Philadelphia Office.  “Abuse of prescription drugs now kills more people than illegal drug abuse and costs taxpayers many millions of dollars.”

Sandra Jalowiec

     Sandra Jalowiec, age 43, Avoca, Pennsylvania was charged with health care fraud in a criminal information filed in U.S. District Court in Scranton on July 29, 2014.

     On November 13, 2014, Jalowiec was sentenced to two years probation and was ordered to pay $6,071 in restitution.

     Jalowiec engaged in a scheme and artifice to defraud Blue Cross of Northeastern Pennsylvania for the period beginning January 2008 through May 2014.

     The charges stem from an investigation initiated in June 2014 by the Federal Bureau of Investigation and the Department of Health and Human Services.

     The information alleges that Jalowiec defrauded Blue Cross of Northeastern Pennsylvania by forging prescriptions in the name of a licensed medical doctor.  The prescriptions were fraudulently written by Jalowiec for pain medications.  Blue Cross was then billed for the forged and fraudulent claims.  The government also filed a plea agreement in the case.  The agreement is subject to the approval of the Court.  Jalowiec will be required to pay restitution for the loss amount.

     Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.

Rose Umana

     On October 23, 2014 a federal grand jury returned a superseding indictment charging Umana, with additional healthcare fraud and money laudering offenses. The superseding indictment charges Umana with health care fraud and money laundering in connection with operation of Vision Healthcare. The new charges are in addition to 34 offenses brought in an indictment returned June 18. The superseding indictment alleges that Umana conducted at least 32 monetary transactions totaling $673,733 with proceeds derived from the fraud in amounts greater than $10,000. The superseding indictment also alleges that approximately $307,000 in three bank accounts held by Umana are forfeitable to the government.

     On June 18, 2014, a federal grand jury in Harrisburg returned a 34-count indictment charging that between 2010 and 2014 Umana created false identification documents and fictitious occupational licenses for workers not licensed at the level represented on the license.  Umana then allegedly submitted bills to Medicaid for medical services supposedly provided by the workers, billed Medicaid for services provided by someone other than the person claimed to be the provider, and billed Medicaid for services not provided or provided by someone not qualified to provide the service.

     Umana appeared on June 19, 2014 before U.S. Magistrate Judge Susan E. Schwab.  She was ordered released and to be under electronic monitoring.  Trial is scheduled forJune 9, 2015 before Senior U.S. District Court Judge Sylvia H. Rambo.

     Medicaid is the joint federal–state program that provides health care and nursing home coverage to low asset/income individuals.  Medicaid in Pennsylvania is administered by the Department of Public Welfare.  Vision Healthcare Services, Inc., is a medical staffing company and home care services provider servicing Dauphin, Cumberland, Perry and York Counties and has been enrolled under Medicaid since 2006.

     This case is the result of a cooperative investigation by the Office of Inspector General, U.S. Department of Health and Human Services; Internal Revenue Service Criminal Investigations; and the Medicaid Fraud Control Section of the Pennsylvania Office of Attorney General.  Special Assistant U.S. Attorney Heather Albright of the Pennsylvania Attorney General’s Office, and Assistant U.S. Attorney Christy H. Fawcett are assigned to the case. 

     A false statement relating to health care matters carries a maximum term of imprisonment of five years, the money laundering offense is punishable by up to 10 years’ imprisonment, and identity theft carries a two-year mandatory minimum sentence that must be served consecutively to any other sentence.

Peter Capitano

     On December 18, 2014, United States District Court Judge Malachy E. Mannion sentenced Peter J. Capitano, age 58, to 15 months imprisonment followed by a 3-year term of supervised release.  Capitano, a former Old Forge, PA pharmacist, was also ordered to pay restitution in the amount of $166,287.03 to Blue Cross of Northeastern Pennsylvania and Medicaid.

     A criminal information was filed in January 2014 charging Capitano with engaging in a scheme to defraud Blue Cross of Northeastern Pennsylvania and Medicaid from 2007 through August 2013.  The scheme involved submitting claims or causing claims to be submitted to those health benefit providers for drugs allegedly prescribed when the prescriptions did not exist and for drugs not actually dispensed.

     The charges stemmed from an investigation initiated in February of 2011 by the Federal Bureau of Investigation and the Department of Health and Human Services, Office of Inspector General. Capitano pleaded guilty on April 24, 2014, pursuant to a plea agreement with the government.

     Assistant United States Attorney Michelle Olshefski prosecuted the case.

Timothy Clark

     On March 20, 2014, Chief United States District Court Judge Christopher Conner sentenced doctor Timothy Clark, age 47, to 15 months imprisonment for health care fraud and pension fraud.

     Clark was ordered to pay restitution of $130,535.05 and forfeiture of $105,518.46.

     On April 22, 2013, Clark pleaded guilty in federal court in Harrisburg.

     Clark is a medical doctor and pulmonologist and the sole owner of Central Pennsylvania Pulmonary Associates(CPPA) and Sleep Disorder Centers of Central Pennsylvania. In June 2012 and again in July, Clark was indicted by a federal grand jury in Harrisburg in separate indictments.

     In June 2012, Clark was indicted on charges that from July 2010 through December 2011, as the owner of CPPA, and the trustee of the CPPA employee 401(k) Plan, he withheld employee 401(k) contributions and failed to deposit the withheld funds into their 401(k) Plan. Clark instead maintained the employee 401(k) contributions in bank accounts he controlled. Clark’s employees lost approximately $25,000 of their retirement funds.

     In July 2012, Clark was indicted on charges that from December 2007 through September 26, 2008, Clark, who provided critical care services to patients of Holy Spirit Hospital, intentionally inflated the amount of time the healthcare providers he employed spent with each patient, thereby fraudulently inflating the health insurance claims Clark submitted to Medicare, Highmark, Inc., and Capital Blue Cross.  The dollar amount of the fraudulent claims exceeded $500,000. In the indictment’s six money laundering counts, Clark was charged with transferring approximately $103,000 obtained through the healthcare fraud to CPPA payroll and money market accounts.

      Clark pleaded guilty to embezzlement from an employee benefit plan, executing a scheme to defraud healthcare benefit programs in connection with the delivery and payment of healthcare benefits and money laundering.

     The case involving the embezzlement from an employee benefit plan was investigated by the United States Department of Labor, Employee Benefits Security Administration, the United States Department of Labor, Office of Inspector General, the United States Department of Health and Human Service, Office of Inspector General, and the Federal Bureau of Investigation.

    The case involving the health care fraud and money laundering was investigated by the Pennsylvania Office of Attorney General, Insurance Fraud Section; the United States Department of Health and Human Services, Office of Inspector General; the Internal Revenue Service, Criminal Investigations; and the Federal Bureau of Investigation.

     Both cases were prosecuted by Assistant United States Attorney Joseph J. Terz.

Advantage Medical Transport and Serge Sivchuk

     On May 1, 2013, the United States Attorney’s Office for the Middle District of Pennsylvania announced that a Harrisburg-based ambulance company has pleaded guilty to multiple False Statement charges related to Medicare fraud.

     Advantage Medical Transport, Inc, headquartered at 733 Fire House Lane, Harrisburg, pleaded guilty before U.S. District Court Judge Christopher C. Conner to 14 Counts of False Statements in Health Care Matters.   Serge Sivchuk, age 27, the sole owner of Advantage, appeared in court and entered the guilty pleas on behalf of the Corporation. The Government estimated the total loss to Medicare as a result of the fraud was approximately $740,000.

     Sivchuk and Advantage were indicted in January 2012 on multiple False Statement and Medicare Fraud charges. The Indictment alleged that between January of 2009 and June of 2011 Sivchuk and Advantage perpetrated a scheme to defraud Medicare by submitting hundreds of claims for the nonemergency transport of Medicare beneficiaries to and from dialysis treatment centers.  The Indictment alleged the claims were fraudulent because the patients were ambulatory and the ambulance transports were not medically necessary.

     The Indictment focused on an August 2010 audit conducted by Medicare and a June 2, 2011 search of Advantage’s business premises by federal law enforcement officers. In response to the audit Sivchuk submitted 14 ambulance Trip Sheets to Medicare that were prepared by Emergency Medical Technicians (EMTs) at the time of each ambulance transport.  The Trip Sheets contained a narrative section that described the patient’s physical condition and ability to ambulate, and serve as the primary support document for each Medicare billed, ambulance transport claim. The June 2, 2011 search by the FBI and investigators from the Health and Human Services (HHS) Inspector General’s Office revealed Sivchuk did not submit the original trip sheets to the auditors but instead submitted copies that had been re-written and forged to conceal the fact the beneficiaries were ambulatory and capable of walking and standing.

     During a February 22, 2013 court appearance before Judge Connor, Sivchuk plead guilty to one of the 14 False Statement Counts for which he was indicted, admitting he directed a subordinate to re-write and forge the signatures of two EMTs on a Trip Sheet pertaining to the ambulance transport of a dialysis treatment beneficiary on August 19, 2010. Sivchuk is currently awaiting sentencing.

     Medicare paid Advantage approximately $166 for each leg of a transport to and from a dialysis treatment center, plus $5.49 per mile.  Many dialysis patients underwent 3 treatments per week. Thus, one week’s transport of just one dialysis patient would yield Advantage more than $1,000.

     Under the terms of Advantage’s plea agreement Judge Conner will determine the overall loss to Medicare.  During the guilty plea proceeding Assistant U.S. Attorney Kim Douglas Daniel told the Court the government intends to show during the loss hearing that the total loss to Medicare was approximately $740,000.  Daniel also noted that at the time the investigators executed the June 2, 2011 search warrant, the U.S. Attorney’s Office filed a civil action in federal court that froze more than $936,000 in Advantage and Sivchuk controlled bank accounts.

    The case is part of a priority program within the U.S. Department of Justice and the U.S. Attorney’s Office focusing on Health Care Fraud and a joint investigation by the FBI and the HHS-Office of Inspector General.

Civil Cases and Settlements

Hamilton Health Center

     On May 27, 2015, Hamilton Health Center, Inc., a federally qualified health center in Harrisburg, Pennsylvania, agreed to pay the United States $270,000 to settle False Claims Act allegations. The settlement results from a self-disclosure by Hamilton to the Office of Inspector General of the U.S. Department of Health and Human Services (OIG) through the OIG’s Provider Self-Disclosure Protocol.

     Federal law prohibits Medicare and Medicaid from paying for any item or service rendered by an individual excluded from participation in those programs. According to the self-disclosure and the investigation that followed, from 2006 to 2013, Hamilton allegedly employed an individual who had been previously excluded from participation in Medicare and Medicaid. The United States alleged that it had civil claims against Hamilton resulting from Medicare and Medicaid payments it received during that period of time that reimbursed the company for the excluded individual’s services. Hamilton has since taken corrective action and voluntarily disclosed the matter. This settlement resolves the matter without the filing of litigation.

     HHS OIG has the authority to “exclude” persons or businesses that engage in certain misconduct from participation in Medicare, Medicaid, and other federal healthcare programs. The effect of exclusion is that no federal program payment may be made for items or services provided by the excluded person/business, or provided because the excluded person prescribed or directed the item or service. The prohibited items or services goes beyond direct patient care and include such things as administrative and management services. If a person or business knows or should know that a claim may be submitted to one of the federal healthcare programs that covers one of these prohibited items or services, it exposes itself to liability.

     The matter was investigated by the United States Attorney’s Office for the Middle District of Pennsylvania and the Office of Inspector General of the U.S. Department of Health and Human Services. The matter was handled by Assistant United States Attorney Anthony D. Scicchitano for the United States Attorney’s Office.

Kurt Bauer

     On August 26, 2014, a civil health care fraud lawsuit was filed against Kurt Bauer age 61, York, PA.  The lawsuit alleges that Bauer, despite being excluded from participation in Medicare, was a manager and administrator of Leader Heights Healthcare, P.C., which caused the submission of thousands of false claims to Medicare.

     Leader Heights Healthcare, formerly ChiroCare Center, is a York County-based chiropractic and primary care provider that accepted Medicare patients.  The complaint alleges that Bauer owned Leader Heights under its former name, but his chiropractic license was revoked by the Pennsylvania Department of State in 2008 for an inappropriate relationship with a patient, resulting in Bauer’s exclusion from Medicare.  According to the complaint, the U.S. Department of Health and Human Services warned Bauer that he generally could no longer be employed and could not provide administrative and management services for a Medicare provider because of the exclusion.

     Despite the warning and after falsely informing Medicare that he had “[r]etired,” Bauer allegedly retained ownership of Leader Heights Healthcare until 2009 and continued to be involved in the management and administration of Leader Heights until he learned of the government’s investigation in 2013.  During this period of time, Leader Heights Healthcare allegedly submitted thousands of claims to Medicare for reimbursement for several million dollars.  Between 2008 and 2013, Leader Heights received approximately $3 million from Medicare.

     The government contends that, because of Bauer’s involvement in the management and administration of Leader Heights during his exclusion, Bauer knowingly caused the submission of false claims to Medicare that improperly sought reimbursement for the services he provided.

     The government’s lawsuit is brought pursuant to the False Claims Act.  Under the False Claims Act, a person that causes the submission of false or fraudulent claims to the government is liable for three times the government’s damages, plus civil penalties for each false claim.  The claims asserted against Bauer are allegations only, and there has been no determination of liability.

     This matter was investigated by the U.S. Department of Health and Human Services’ Office of Inspector General and the Health Care Fraud Unit of the U.S. Attorney’s Office.  The case is assigned to Assistant U.S. Attorney Anthony Scicchitano of the U.S. Attorney’s Office’s Civil Division.

     The lawsuit is captioned United States v. Kurt Bauer (M.D. Pa.).

Millcreek Township School District

     On January 14, 2014, Millcreek Township School District agreed to pay the United States $350,000 to resolve allegations that it submitted improper claims to the Medicaid-funded School Based Access Program.  Millcreek Township School District is the public school system for students residing in Millcreek Township, Pennsylvania, a suburb of Erie.

    Millcreek Township School District agreed to pay to resolve allegations that from August 11, 2005, through June 28, 2007, the School District improperly submitted claims to the Pennsylvania School Based Access Program for payment when those claims did not satisfy the necessary program requirements.  Payment was due within 60 days from the date of the Settlement Agreement. Payment was received on February 12, 2014.

     The Pennsylvania School Based Access Program provides federal Medicaid reimbursement to schools for health related services provided by those schools to special needs students as part of an Individualized Education Plan.  Schools submitting claims to Access for payment must satisfy a number of requirements, and the amount of reimbursement depends on the type of service performed.

     The U.S. Attorney’s Office in Harrisburg had jurisdiction because Access is managed by the Pennsylvania Department of Public Welfare and the Pennsylvania Department of Education, both of which are based in Harrisburg.

     The government determined that the School District submitted Access claims and received federal reimbursement for claims that were improper due, generally, to discrepancies including the absence of recipients on dates billed for services, claims for non-compensable services, improper grouping of services for billing purposes, lack of adequate documentation, and claims for unlisted services.  The specific types of violations are set out in the Settlement Agreement.  (A copy of the Settlement Agreement is available from the U.S. Attorney’s Office on request.)

     The U.S. Attorney’s Office credited the assistance provided by the Pennsylvania Department of Public Welfare, which conducted the audit of Millcreek Township School District’s Access claims.  The U.S. Attorney’s Office also acknowledged Millcreek Township School District’s cooperation with the investigation.  The Settlement Agreement is not an admission of liability by the School District.

  The case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and the U.S. Department of Education, Office of Inspector General.  The case was handled by Assistant United States Attorneys D. Brian Simpson and Anthony Scicchitano, Civil Division, United States Attorney’s Office.

Easton Hospital

     On April 3, 2013, Easton Hospital has agreed to pay the United States $454,866 to resolve allegations that it submitted improper claims to the Medicare program.  Easton Hospital is a subsidiary of Community Health Systems and is located in Easton, Pennsylvania.

     Easton Hospital has agreed to pay $454,866 to resolve allegations that from January 1, 2004, through May 28, 2009, Easton Hospital improperly submitted claims to the Medicare program for payment that contained evaluation and management services that were not allowable under Medicare.

     Medicare does not normally allow additional payments for such services performed by a provider on the same day as a procedure, unless the service is significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the procedure.  In such cases, an attachment to the claim, known as "Modifier 25," may be submitted to allow the additional payment.

     In this matter, the government determined that Easton Hospital incorrectly attached Modifier 25 to Medicare claims that led Medicare to pay the hospital for evaluation and management services that were not significant and separately identifiable from the underlying procedure for which Medicare also paid the hospital.

     The U.S. Attorney’s Office acknowledged and Easton Hospital’s cooperation and remedial action which helped to resolve the matter.  After the Government contacted Easton Hospital concerning improper Modifier 25 claims, the hospital conducted an internal review to determine what caused the improper claims to be submitted to the Medicare program and took action to increase medical coding training and bolster its compliance program.

     The Harrisburg Office of the U.S. Attorney’s Office had jurisdiction because Medicare provider claims are processed by Novitas Solutions, Inc., formerly Highmark Medicare Services, in Camp Hill, Pennsylvania.  The U.S. Attorney’s Office for the Eastern District of Pennsylvania cooperated in this matter.

     The case was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General, in Harrisburg and handled by D. Brian Simpson, of the United States Attorney's Office, Civil Division.

St. Luke's University Health Network

     On April 3, 2013, St. Luke’s University Health Network agreed to pay the United States $1,029,791 to resolve allegations that it erroneously submitted improper claims to the Medicare program.  St. Luke’s University Health Network owns and operates St. Luke’s Hospital of Bethlehem, St. Luke’s Quakertown Hospital, and St. Luke’s Miners Memorial Hospital.

     St. Luke’s University Health Network has agreed to pay $1,029,791 to resolve allegations that from January 1, 2002, through June 30, 2012, its hospitals erroneously submitted claims to the Medicare program for payment that contained evaluation and management services that were not allowable under Medicare.

     Medicare does not normally allow additional payments for such services performed by a provider on the same day as a procedure, unless the service is significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the procedure.  In such cases, an attachment to the claim, known as "Modifier 25," may be submitted to allow the additional payment.

     In this matter, the government determined that St. Luke’s hospitals incorrectly attached Modifier 25 to Medicare claims that led Medicare to pay the hospitals for evaluation and management services that were not significant and separately identifiable from the underlying procedures for which Medicare also made payments.

      St. Luke’s fully cooperated in this investigation after being contacted by the government.

     The Harrisburg Office of the U.S. Attorney’s Office had jurisdiction because Medicare provider claims are processed by Novitas Solutions, Inc., formerly Highmark Medicare Services, in Camp Hill, Pennsylvania.  The U.S. Attorney’s Office for the Eastern District of Pennsylvania cooperated in this matter.

     The case was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General in Harrisburg and handled by D. Brian Simpson, of the United States Attorney's Office, Civil Division.

Updated June 2, 2015