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 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. Attorney Brian Simpson, Health Care Fraud Coordinator.
Recent Cases and Settlements
Criminal prosecutions
Advantage Medical Transport
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. Each Count is punishable by up to as much as a $500,000 fine. 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.
According to U.S. Attorney Peter J. Smith, 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 and the completion of a pre-sentence report.
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.Timothy Clark
On April 22, 2013, the United States Attorney's Office announced that a Mechanicsburg doctor who owns two Central Pennsylvania medical facilities pleaded guilty in federal court in Harrisburg before U.S. District Judge Christopher C. Conner..
According to United States Attorney Peter J. Smith, Dr. Timothy 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.
Clark is scheduled for sentencing on July 29, 2013.
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 are being prosecuted by Assistant United States Attorney Joseph J. Terz.
Dr. Michael C. Karason
On February 28, 2013, the United States Attorney's Office announced that a podiatrist who practiced in Harrisburg and Elizabethtown was sentenced today to 16 months in federal prison for committing health care fraud.
According to United States Attorney Peter J. Smith, Dr. Michael C. Karason, age 44, who now resides in Lincoln, California, previously pleaded guilty to engaging in a scheme to defraud health care benefits programs. At today’s hearing, Senior District Court Judge Sylvia H. Rambo also directed that Karason pay a total of $118,072.29 in restitution to Medicare, Capital Blue Cross and Highmark and that he serve a three-year term of supervised release following his prison sentence.
According to the charges and a summary of facts presented by Assistant U.S. Attorney Christy Fawcett, Karason maintained two offices in the Harrisburg area and an office in Elizabethtown as well as two offices in the Los Angeles, California, area. He engaged in a pattern of billing health insurers for services in both Pennsylvania and California that were supposedly provided in both locations at the same time. Investigators obtained travel and financial documents that established Karason was in California during time periods when he billed for services in his central Pennsylvania offices. Some of the services billed in this manner were not provided at all; others were provided by an unlicensed office manager not authorized to perform such services.
This case was investigated by the Office of Inspector General, Health and Human Services. It was assigned to Assistant U.S. Attorney, Christy H. Fawcett.
Serge Sivchuk
On February 22, 2013, Serge Sivchuk, the owner of Advantage Medical Transport, Inc, headquartered at 733 Fire House Lane, Harrisburg, pleaded guilty before U.S. District Court Judge Christopher C. Conner to one count of False Statements in Health Care Matters. The charge is punishable by up to five years imprisonment and a $1,000,000 fine.
According to U.S. Attorney Peter J. Smith, Sivchuk was indicted in January 2011 on multiple False Statement and Medicare Fraud charges. The Indictment alleged that between January 2009 and June 2011 Sivchuk 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 provided Medicare with dozens of ambulance Trip Sheets, which are prepared by Emergency Medical Technicians (EMTs) at the time of each ambulance transport. The Trip Sheets contain a narrative section that describes the patient’s physical condition and ability to ambulate. The Trip Sheets serve as the primary support document for each ambulance transport claim for which Medicare was billed.
The June 2, 2011 search by the FBI and investigators from the Health and Human Services (HHS) Inspector General’s Office revealed that Sivchuk did not submit the original trip sheets to the auditors but instead submitted copies of other trip sheets that had been re-written and forged to conceal the fact the beneficiaries were able to walk and stand. During his court appearance before Judge Conner today, Sivchuk admitted 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.
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 result in Advantage being paid by Medicare more than $1,000.
Under the terms of the 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 that the government intends to show during the loss hearing that the total loss to Medicare as the result of the fraud scheme 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 bank accounts controlled by Advantage and Sivchuk.
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. Anyone with information concerning suspected health care fraud should contact the FBI at 717-232-8686.
William J. Zinnanti
On January 28, 2013, William Joseph Zinnanti, age 44, of Mountain View, California, was sentenced in Harrisburg, to four months’ imprisonment by U.S. District Court Senior Judge William W. Caldwell for introducing adulterated medical devices into interstate commerce in violation of Federal Food and Drug laws.
According to information presented by Assistant U.S. Attorney Joseph Terz, from 2005 to 2007, while residing in Hershey, Pennsylvania, Zinnanti was the President and Owner of a business known as Zinnanti Surgical Design, LLC, which manufactured a medical device known as the Bayonet Electro-Surgical Pencil. The device was sold mainly to hospitals. Surgeons used this device to cut and cauterize tissue surrounding the patient's thoracic vertebrae to allow access to the thoracic disk space during back surgery.
The surgical pencils were adulterated because the methods, facilities, and controls Zinnanti used for the manufacture, packing, and storage of the product did not comport with current good manufacturing practice to ensure that the devices were safe and effective and in compliance with the Federal Food, Drug, and Cosmetic Act. Zinnanti acted with the intent to defraud and mislead the FDA with regard to the manufacturing procedures he had in place.
Zinnanti was charged in May 2012 and pleaded guilty in June 2012.
According to United States Attorney Peter J. Smith, after questions surrounding the sterility of the device came to light in 2006, a nationwide and international recall was instituted. Anyone seeking further information regarding the recall should contact the FDA Division of Small Manufacturers International and Consumer Assistance at 1-800-638-2041.
This investigation was conducted by the Food and Drug Administration, Office of Criminal Investigations. The case was prosecuted with the assistance of FDA's Office of Chief Counsel.
Patricia Delorenzo
On January 23, 2013, the United States Attorney’s Office for the Middle District of Pennsylvania announced that Patricia Delorenzo, age 59, of Milford, Pennsylvania, pleaded guilty today in Scranton to Health Care Fraud charges before U.S. District Court Judge A. Richard Caputo.
A criminal Information was filed in November 2012 charging Delorenzo with engaging in a scheme to defraud Blue Cross of Northeastern Pennsylvania between May 2009 and December 2011 by submitting false billing claims for drug and alcohol treatment services.
The charges stem from an investigation initiated by the Federal Bureau of Investigation (FBI).
Under the terms of the plea agreement, Delorenzo's intended loss is approximately $20,000. Actual loss is $10,188.88. Delorenzo will pay restitution for the actual loss amount and forfeit her professional counseling license.
The maximum penalties for a violation of the Federal Health Care Fraud statute includes a period of incarceration of up to 10 years and a fine in the amount of $250,000. No court date has been set for a hearing.
Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
Benny Salerno
On August 10, 2012, the United States Attorney's Office announced that the former owner of a pharmacy located in Sciota, Pennsylvania, Benny Salerno, age 41, of Stroudsburg, Pennsylvania, was sentenced Thursday by United States District Court Judge A. Richard Caputo to one year probation. Salerno also agreed to forfeit $35,000.
According to United States Attorney Peter J. Smith, Salerno was the owner of Salerno’s Pharmacy in Monroe County from 1999 to 2007. Salerno’s pharmacy was a “closed pharmacy” in that it supplied prescription medication to health care institutions and did not sell to the general public.
In February 2012, Salerno admitted that he directed employees to retrieve unused portions of medications from health care institutions and return the unused medications to stock for future use, regardless of lot number or expiration date. Such conduct is in direct violation of the U.S. Food and Drug Administration(FDA) regulations, which prohibit the return and reuse of medications once they have left the pharmacy. Salerno then sought reimbursement from government health care insurance providers for dispensing of the misbranded pharmaceuticals.
Salerno agreed to forfeit $35,000 in proceeds of the scheme which shall be used to make restitution to the Pennsylvania Department of Public Welfare (DPW). DPW administers the Medicaid program with federal and state funds.
Additionally, Salerno has agreed to a permanent exclusion from participating in state and federally funded health care benefit programs.
Salerno was indicted in October 2010.
The investigation was conducted by the Office of Inspector General for Health and Human Services, the Food and Drug Administration and the Pennsylvania Office of Attorney General and was prosecuted by Assistant United States Attorneys Amy C. Phillips and Michael A. Consiglio.
Paul Chromey
On September 2, 2011, Paul Chromey, of Plains, Pennsylvania and owner of Northeast Pedorthic Services, Inc. a/k/a Wyoming Valley Pedorthic Center was sentenced by United States Magistrate Judge Malachy E. Mannion to a 12-month term of imprisonment and a one-year period of supervised release. Magistrate Judge Mannion further ordered that Chromey pay $764,758.51 in restitution to the victim, the Medicare program.
Chromey illegally billed the Medicare program for the period January 1, 2006, through July 10, 2009. The billings were illegal because Chromey had been excluded from billing Medicare and all other federal health care benefit programs for a period of 10 years beginning in December 2000. As such, Chromey was not entitled to receive any federal health care benefit program payments for anything he did, ordered, or prescribed. Chromey also billed the Medicare program for ineligible claims.
The investigation was conducted by the U.S. Department of Health and Human Services-Office of Inspector General. Assistant United States Attorney Michelle Olshefski prosecuted Chromey.
Ronald McFarland
On August 30, 2011, Ronald McFarland, of State College, Pennsylvania was sentenced by United States District Court Chief Judge Yvette Kane to a 37-month terms of imprisonment, two years of supervised release and ordered to pay $2,463,922 in restitution.
McFarland was the President of Verimed Services, Inc. and Medical Alliance Partners, LLC, both based in State College. Through those companies, he provided third-party billing services to Rosewood Cancer Care, Inc., Pittsburgh, Pennsylvania, and Oaktree Cancer Care, Inc., East Liverpool, Ohio, which both provided outpatient radiation treatment programs for cancer patients.
Verimed billed health insurance plans and programs for medical treatment provided to patients of Rosewood and Oaktree, and then it received, recorded, and forwarded checks payable to Rosewood and Oaktree from the insurance plans and programs.
McFarland diverted and embezzled insurance payments for Oaktree and Rosewood, totaling $2.46 million, and transferred the stolen funds to business and personal accounts controlled by him. McFarland also concealed the theft by making false entries in daily collections logs and patient ledgers.
McFarland was charged on February 24, 2011 with theft and embezzlement of $2.46 million in health insurance reimbursements belonging to two cancer treatment centers in Pittsburgh, Pennsylvania and Liverpool, Ohio.
The case was investigated by the State College office of the Federal Bureau of Investigation. Prosecution was handled by Assistant United States Attorney George J. Rocktashel.
Gregory Salko
In July 2007, Gregory Salko, the owner-operator of the Whites Crossing Medical Group in Carbondale, was charged by an Indictment with two counts of Health Care Fraud and 17 counts of False Statements in Health Care Matters. The charges related to Salko's treatment and falsification of medical records pertaining to two elderly Medicare patients in 2005 and 2006.
On June 30, 2009, Salko pleaded guilty to a two-count, misdemeanor Superseding Information. Salko admitted that he made false representations of material facts in a July 17, 2005 progress note he prepared for one of his elderly Medicare patients and that he committed a criminal violation of the HIPAA Privacy Act by falsely representing in writing to the Community Medical Center in Scranton on April 3, 2007, that he was authorized to obtain the medical records of another elderly Medicare patient.
On October 26, 2009, Salko was sentenced by United States District Court Judge A. Richard Caputo to a two year term of probation, 100 hours of community service and was ordered to pay a $20,000 fine.
On May 31, 2011, the Office of Inspector General of the Department of Health and Human Services notified Salko that as a consequence of his conviction he will be excluded from participation in any capacity in Medicare, Medicaid, and all Federal health care programs for the minimum statutory period of five years. The exclusion will affect Salko’s ability to claim payment from those programs for items or services rendered.
On January 23, 2012, the Department of Health and Human Services Departmental Appeals Board, issued its final decision to affirm the October 5, 2011, decision of the Administrative Law Judge to exclude Salko from participation in any capacity in Medicare, Medicaid, and all Federal health care programs for the minimum statutory period of five years.
Assistant United States Attorney Kim Douglas Daniel prosecuted Salko.
Stephen L. Marks
On June 23, 2011, Marks, a Pennsylvania licensed pharmacist who operated and managed a pharmacy located in Harrisburg, Pennsylvania, and illegally distributed pain medication and stimulants over the internet, was sentenced to a term of imprisonment of 51 months', a fine of $600, and a term of supervised release of three years, by Senior U.S. District Court Judge Sylvia H. Rambo in Harrisburg.
Marks, age 67, formerly of Carlisle, Pennsylvania, was charged in a seven count indictment by a federal grand jury in Harrisburg in September 2010.
On January 27, 2011, Marks pled guilty to conspiring to distribute controlled substances and money laundering. At his guilty plea, Marks admitted to illegally distributing pain medications such as hydrocodone and stimulants such as Didrex, phendimetrazine and phentermine to customers who visited websites and ordered their drug of choice, including the dosage and quantity. These drugs pose a substantial risk of addiction and abuse. Marks operated and managed Pharmacy Services, Inc., located in Harrisburg, Pennsylvania. Marks distributed approximately 989,000 units of controlled substances including 577,000 pills of hydrocodone, to customers nationwide and generated sales in excess of $1 million.
According to the goverment, Marks was warned by the DEA in 2004 that his conduct was illegal, but despite that warning, Marks continued to market the drugs and in effect became an illegal drug dealer. The government also stated that Marks knew the drugs were highly addictive and subject to abuse and that there was no legitimate physician-patient relationship. Marks violated his duty as a healthcare professional and put his personal money interests over his obligations as a licensed pharmacist.
The investigation was conducted by the Food and Drug Administration, Office of Criminal Investigations, the IRS and the DEA and was prosecuted by Assistant United States Attorney Joseph Terz.
Thea Tafner
On May 16, 2011, the former chairperson of the American Hose and Chemical Fire Company was sentenced after pleading guilty to embezzlement of over $3 million from the organization.
Tafner, age 56, of Danville, Pennsylvania, was sentenced to 30 months’ imprisonment by Chief United States District Court Judge Yvette Kane. Judge Kane further ordered that Tafner pay $1,816,045.13 in restitution.
Tafner was the chairperson of the American Hose and Chemical Fire Company, in Mount Carmel, Pennsylvania, for approximately 14 years. Tafner opened an unauthorized and fraudulent bank account purportedly for the ambulance company and then used the fraudulent bank account to direct Medicare payments into the account. Between October 2000 and November 2009, a total of $3,712,203 was diverted into the fraudulent account. Tafner used $1,816,045.13 for personal gain.
Tafner was charged in December 2010 and pled guilty on January 7, 2011.
This case was investigated by the Office of the Inspector General for the U.S. Department of Health and Human Services and the Federal Bureau of Investigation. Prosecution was assigned to Assistant United States Attorney Christy H. Fawcett.
Julian Metter
On February 24, 2011, Julian Metter, age 58, of State College, Pennsylvania, was sentenced by United States District Court Judge John E. Jones, III, to a five month term of imprisonment for making false statements in connection with health care benefit payments. Judge Jones further ordered that Metter serve five months of home confinement, two years of supervised release and pay $13,423 in restitution.
Metter provided psychotherapy and cognitive skill development services to individual patients in Centre County, Pennsylvania. In order to properly bill public and private health care benefit programs for these services, Metter was required to meet, see, treat and interact with patients on a one-on-one basis. Metter could not bill for services provided to patients if he did not actually see and treat them. From October 2002 through October 2005 on approximately 200 occasions, Metter made false statements in connection with the delivery of, and payment for health care benefits. Metter billed Medicare for more than $30,000, but less than $70,000, in psychotherapy and cognitive skill development services sessions with patients when he was not in Centre County and could not have met with and treated patients.
Metter was charged on May 28, 2009 in a one-count Information. He later pled guilty on June 26, 2009.
This case was investigated by the Office of the Inspector General for the U.S. Department of Health and Human Services and the State College office of the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Wayne P. Samuelson.
Andrew Dancha and John Roman
On January 20, 2011, an Allentown man with ties to the pharmaceutical industry was sentenced in federal court by United States District Court Senior Judge Richard P. Conaboy.
Andrew Dancha, age 45, was sentenced to 21 months' imprisonment followed by two years of supervised release for prescription drug marketing fraud after he sold promotional drug samples furnished to him and his office, Carbon Medical Associates, to John Roman, doing business as Community Pharmacy in Jim Thorpe. Dancha also agreed to the forfeiture of $600,000 which represents the proceeds of his crime.
In April 2010, Dancha and Roman were charged in separate filings. Both later pleaded guilty.
Roman was sentenced on December 20, 2010, for engaging in a scheme to defraud and obtain money from pharmaceutical drug manufacturers Novartis Corporation; Glaxo, Smith and Kline Corporation; and Merck Pharmaceutical by submitting fraudulent claims for reimbursement for fictitious customers/patients.
Roman was sentenced to 21 months' imprisonment and ordered to pay $528,964 in restitution, as well as forfeit the pharmacy itself; a 2008 Corvette; and $175,000 in cash, all of which are to be used to pay the restitution obligation.
Both cases were investigated by the United States Secret Service and the Food and Drug Administration. Prosecution was handled by Assistant United States Attorneys Barbara Kosik Whitaker and Amy Phillips.
Civil settlements
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.
Lehigh Valley Health Network
On June 12, 2012, Lehigh Valley Health Network agreed to pay the United States $332,479 to resolve allegations that it erroneously submitted improper claims to the Medicare program. Lehigh Valley Health Network owns and operates Lehigh Valley Hospital, Allentown, and Lehigh Valley Hospital-Muhlenberg.
Lehigh Valley Health Network has agreed to pay $332,479 to resolve allegations that from January 1, 2004, through December 31, 2009, Lehigh Valley Hospital and Lehigh Valley Hospital-Muhlenberg 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 Lehigh Valley’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.
The U.S. Attorney’s Office credited Lehigh Valley Health Network for its positive response in this matter. After the Government contacted the provider concerning improper Modifier 25 claims, Lehigh Valley fully cooperated with the investigation and voluntarily implemented a plan of correction that includes monitoring claims prior to submission to the Medicare program to ensure accurate coding.
The U.S. Attorney’s Office in Harrisburg 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 in Philadelphia 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.
Main Line Hospitals
On May 31, 2012, Main Line Hospitals, Inc. agreed to pay the United States $1,030,540 to resolve allegations that it erroneously submitted improper claims to the Medicare program. Main Line Hospitals owns and operates Bryn Mawr Hospital, Lankenau Medical Center, Paoli Hospital, and Bryn Mawr Rehabilitation Hospital; all located in suburban Philadelphia.
From January 1, 2004, through February 28, 2011, Bryn Mawr Hospital, Lankenau Hospital, and Paoli Hospital 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 Main Line’s hospitals 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 credited Main Line’s cooperation and remedial action which helped to resolve the matter efficiently. After the Government contacted Main Line concerning improper Modifier 25 claims at Paoli Hospital, Main Line voluntarily brought in an outside auditor to review similar claims submitted by its other member hospitals and disclosed that Bryn Mawr Hospital and Lankenau Hospital had also submitted improper Modifier 25 claims to the Medicare Program.
The U.S. Attorney’s Office in Harrisburg 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 in Philadelphia 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.
Diakon
On December 2, 2011, Diakon Lutheran Social Ministries d/b/a Diakon Hospice Saint John (Diakon) agreed to resolve its liability for violations of the False Claims Act (FCA) by paying the United States $10.56 million.
From October 1, 2004 through October 1, 2010, Diakon erroneously submitted claims to the Medicare Program for hospice care provided to Medicare beneficiaries during periods of time in which the beneficiaries were not eligible for hospice benefits under the Medicare regulations.
Diakon, one of the oldest hospices in Pennsylvania, provides hospice care at facilities in Hazleton, Allentown, and Wyomissing. Diakon maintains administrative offices in Mechanicsburg and Allentown. Earlier this year, Diakon voluntarily disclosed to federal authorities that it had received improper Medicare and Medicaid payments.
By voluntarily disclosing improper billing practices, Diakon avoided a government lawsuit under the FCA and was able to negotiate a settlement. The FCA provides that parties who voluntarily disclose violations of the Act are liable for double damages, instead of triple damages and civil penalties between $5,500 and $11,000 for each violation.
The Settlement Agreement does not release claims under any federal health care program other than Medicare. Diakon will repay directly to Medicaid the relatively small Medicaid overpayment that it disclosed.
Masonic Villages
On October 24, 2011, Masonic Villages of the Grand Lodge of Free and Accepted Masons of Pennsylvania agreed to pay the United States $325,080.90 to resolve violations of the False Claims Act, 31 U.S.C. §§ 3729-3733.
Masonic Villages is a Medicare and Medicaid provider, offering nursing care and personal living accommodations to residents at four campuses in Pennsylvania: Elizabethtown; Lafayette Hill; Sewickley; and Warminster.
The Masonic Villages voluntarily disclosed to the government that from June 2007, through September 2010, the contractor that provided rehabilitation therapy services at the Masonic Villages' Lafayette Hill, Sewickley, and Warminster campuses did not maintain accurate daily treatment notes, as required by Medicare regulations.
Based on a review of the disclosure, the government concluded that Masonic Villages failed to follow proper Medicare coding and documentation regulations required for evaluating and billing for Medicare and Medicaid patients who may need rehabilitative therapy services. Specifically, Masonic Villages did not properly document the time spent on initial patient assessments for rehabilitative therapy services and failed to maintain accurate treatment notes for rehabilitative therapy provided on the same day as the initial assessment at Masonic Villages' Lafayette Hill, Sewickley, and Warminster campuses. In addition, Masonic Villages at Sewickley billed for individual therapy sessions at times when therapy was provided concurrently and failed to maintain adequate documentation for these services.
The Masonic Villages voluntarily brought this matter—discovered during an internal audit—to the government's attention and to strengthen internal controls to ensure compliance with Medicare and Medicaid regulations in the future.
This case was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General in Harrisburg. Lisa Veigel of the U.S. Department of Health and Human Services, Office of Counsel to the Inspector General, and Brian Simpson, of the United States Attorney's Office, Civil Division, handled the case.
Meadow View Nursing Center
On September 16, 2011, Somerset Care Inc., which does business as Meadow View Nursing Center, Berlin, PA, has agreed to pay the United States $161,055.85 to resolve alleged violations of the False Claims Act, 31 U.S.C. §§ 3729-3733.
Meadow View voluntarily disclosed to the government that the nursing home had a laboratory services contract with a medical laboratory which resulted in Meadow View paying the laboratory 48 percent of the Medicare Fee Schedule rate for laboratory services from February 7, 2003 through July 30, 2010.
The government contended that Meadow View's contract violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and, in turn, caused all resulting claims submitted to the Medicare program for payment for laboratory services provided to Meadow View residents to be false in violation of the False Claims Act. The Anti-Kickback Statute prohibits anyone from purposefully offering, paying, soliciting or receiving anything of value to generate referrals for items or services payable by any Federal health care program. In this case, the United States maintained that the laboratory services contract violated the Anti-Kickback Statute because Meadow View Nursing Center received a 52 percent discount off of the applicable Medicare Fee Schedule for laboratory services.
Meadow View voluntarily disclosed the matter to the government and agreed to implement internal controls to ensure compliance with Medicare regulations in the future.
This case was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General in Harrisburg and handled by Brian Simpson, of the United States Attorney's Office, Civil Division.
Geisinger Medical Center
On August 2, 2011, the United States Attorney’s Office announced that the Geisinger Medical Center, Danville, PA, has agreed to pay the United States $1,300,000 to resolve allegations that it erroneously submitted improper claims to the Medicare program.
The government contended that from January 1, 2001, through December 31, 2006, Geisinger erroneously submitted claims to the Medicare program for payment that contained evaluation and management services that were not allowable under the Medicare program’s requirements.
According to the United States Attorney’s Office, Medicare does not normally allow additional payments for evaluation and management services by a provider on the same day as a medical procedure is performed.
Such services, known as “Modifier 25,” may be submitted as part of claims to Medicare only when they are separately identifiable and above and beyond the usual care associated with a procedure.
In this matter, the government determined that Geisinger incorrectly attached Modifier 25 to claims that led Medicare to pay the hospital funds to which Geisinger was not entitled.
The United States Attorney’s Office and Geisinger reached a settlement in which Geisinger agreed to pay $1.3 million while not admitting liability or accepting the Government’s contentions, “to avoid the delay, uncertainty, inconvenience and expense of litigation.”
The government considered the matter appropriate for a settlement without filing suit under the False Claims Act because most of the claims in question were filed prior to 2005 and because Geisinger amended its billing practices before being contacted by the United States Attorney’s Office and had voluntarily refunded over $510,000 in overpayments it received for other unrelated services.
The matter 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, as part of the Office’s Health Care Program Initiative.
Divine Providence Hospital
On June 14, 2011, the United States Attorney's Office announced that a Williamsport area hospital agreed to pay the United States $598,965 to resolve allegations that it erroneously submitted improper claims to the Medicare program.
Divine Providence Hospital agreed to pay $598,965 to resolve allegations that from January 1, 2004, through December 31, 2007, the hospital 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 evaluation and management services performed by a provider on the same day as a procedure.
If a provider performs an evaluation and management service on the same day as a procedure and the service is significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the procedure, an attachment to the claim, known as "Modifier 25," may be submitted to allow additional payment for the separate evaluation and management service.
In this matter, the government determined that Divine Providence 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 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.
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