Health Care Law Blog

Health Care Providers Face Steep Penalties for Medicare/Medicaid Fraud

So far, July has been a busy month for health care fraud enforcement across the country.

On July 18, Divyesh Patel, owner of Alpine Nursing Care Inc. in North Randall, Ohio, was sentenced to two years in prison after pleading guilty to one count of conspiracy to commit health care fraud and four counts of health care fraud. Patel was also ordered to pay total restitution of $1,939,864 to the Medicaid Program in Ohio. According to court documents, Patel hired Belita Mable Bush as the office manager despite knowing that Bush had been convicted of a health care-related felony and excluded from involvement in billing federal health care programs. From June 1, 2006 to October 18, 2009, Patel conspired with Bush to defraud Medicaid by billing for services that had never been performed or that had been performed by excluded individuals. The conspiracy resulted in losses of approximately $1.9 million to the Medicare and Medicaid programs. Bush was convicted on similar charges and will be sentenced next month.

One day earlier, on July 17, three family members were arrested in Zachary, Louisiana for allegedly defrauding the state's Medicaid program. Terry Lee Turner, his wife Connie Turner, and his daughter Nicole Turner, each face Medicaid Fraud charges after agents with the Louisiana Medicaid Fraud Control Unit conducted an investigation into their company, Empowering Care Services, LLC. The Turners allegedly presented false claims to the Louisiana Medicaid Department for services that were never performed. Terry has been charged with one count of Medicaid fraud, while Connie and Nicole each face two counts of Medicaid fraud. If convicted, each will face up to five years in prison and $20,000 in fines per count.

Enforcement efforts have also reached Michigan, where the government recently announced a $4 million settlement of a health fraud lawsuit filed under the False Claims Act. The qui tam lawsuit (a lawsuit brought by a private citizen, popularly called a "whistle blower," against a person or company who is believed to have defrauded the government) was filed by Ann Arbor cardiologist Dr. Julie Kovach against Jackson Cardiology Associates, its owner, cardiologist Jashu Patel, and Allegiance Health hospital, all located in Jackson, Michigan. The lawsuit alleged that Patel and other cardiologists performed unnecessary catheterizations on patients based on nuclear stress tests that were improperly read as positive. These catheterizations were invasive procedures that involved snaking a tube into the heart through an incision in the patient’s groin. According to the complaint, three fourths of these patients had no significant heart blockages and therefore did not need the procedure.

After investigating the allegations, the government notified the defendants that it would intervene in the action. On July 10, the same day the government filed its notice of intervention, the case was settled and dismissed. According to the press release, Allegiance Health settled the case for $1.8 million, while Patel and Jackson Cardiology settled for $2.2 million. As the qui tam relator (whistleblower), Dr. Kovach will receive a percentage of the recovery. The resolution also provides that both Jackson Cardiology and Allegiance Health will enter into Integrity Agreements with the Department of Health and Human Services Office of Inspector General (OIG).

In the press release, United States Attorney Barbara McQuade noted that "[t]his case is especially important because the defendants unnecessarily subjected patients to invasive and potentially harmful procedures." McQuade encouraged other health care professionals with knowledge of similar conduct to come forward.

These cases illustrate the significant increase in resources dedicated to fighting health care fraud as part of health reform. As a result of these efforts, the Departments of Justice and Health and Human Services announced a record-breaking recovery of $4.2 billion in 2012. Health care professionals can expect this amount to grow in the coming years as the government continues to increase funding to crack down on health care fraud.

Julie C. LaVille authored this article as a Law Clerk.

Categories: Fraud & Abuse, Health Care Reform, Hospitals, Medicare/Medicaid, Physicians