About our office

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. Attorneys Kim Douglas Daniel (Criminal) or Anthony Scicchitano (Civil), Health Care Fraud Coordinators.

Recent Cases and Settlements

Criminal prosecutions

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.  The Information alleges McAdams billed for and received reimbursement for attendant care services which were never performed.  

     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.

     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.

     Jalowiec allegedly 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

     A Harrisburg-area health care services provider was charged on June 18, 2014h by a federal grand jury with making false statements relating to health care matters, money laundering, and identity theft.

     A federal grand jury in Harrisburg returned a 34-count indictment charging that between 2010 and 2014 Rose Umana, 47, Mechanicsburg, the owner and operator of Vision Healthcare Services, Inc., 4113 Linglestown Road, Harrisburg, 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.

     In addition, the Grand Jury charged that Umana conducted at least 32 monetary transactions totaling $673,733 with proceeds derived from the criminal activity.  The indictment also alleges that funds totaling approximately $307,000 in three bank accounts held by Umana are forfeitable to the government.

     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 for August 4, 2014 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.

     “Those who steal from government programs such as Medicaid are stealing from all of us,” said Attorney General Kathleen G. Kane. “They will be held accountable.”

     “We trust that Medicaid Home Care companies will do the right things; bill for services that they actually provide and use properly trained professionals to deliver needed care”  said Nick DiGiulio, Special Agent in Charge for the Inspector General’s Office of the United States Department of Health and Human Services in Philadelphia.  “We will continue to work energetically with our partners to investigate those that are accused of stealing health care dollars and mistreating Medicaid recipients.”

     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

     Capitano, an Old Forge pharmacist, pleaded guilty in Scranton on April 25, 2014 to Health Care Fraud charges before the U.S. District Court Judge Malachy E. Mannion.

     A criminal information was filed in January 2014 charging Peter Capitano with engaging in a scheme and artifice to defraud Blue Cross of Northeastern Pennsylvania and Medicaid for the period beginning January 2007 through August 2013. 

     The charges stem 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 pled guilty pursuant to a plea agreement with the government. 

     The information filed against Capitano alleged that he engaged in a scheme and artifice to defraud Blue Cross of Northeastern Pennsylvania and Medicare by 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.  Capitano will be required to pay restitution for the loss amount.

     Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.

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 are being 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.

     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.

     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.

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.

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 April 30, 2013, the United States Attorney’s Office for the Middle District of Pennsylvania announced that Patricia Delorenzo, age 59, of Milford, Pennsylvania, was sentenced by U.S. District Court Judge A. Richard Caputo in Scranton to one year probation and a $2,500 fine. Delorenzo was also ordered to pay $9,249.33 in restitution, due immediately.

      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. She pleaded guilty in January 2013.

     The charges stem from an investigation initiated by the Federal Bureau of Investigation (FBI).  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 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.

 

Civil Cases and Settlements

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.

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.

     Assistant United States Attorney D. Brian Simpson handled the Diakon matter on behalf of the U.S. Attorney's Office. Senior Counsel Lisa G. Veigel handled the matter on behalf of the Office of Counsel to the Inspector General of the Department of Health and Human Services.

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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