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DoJ Settles $27.68M in Medicare Fraud, False Claims Act Violations

The Department of Justice has recovered $27.68 million in Medicare fraud settlements related to False Claims Act violations.

The DoJ has recovered $27.68 million in Medicare fraud settlements

Source: Thinkstock

By Thomas Beaton

- The Department of Justice continues its crackdown on Medicare fraud by settling various criminal cases related to $27.68 million of False Claims Act violations.

Provider settlements remain the primary medium for healthcare fraud recoveries, according to recent data released by the Office of the Inspector General (OIG). Settlements helped law enforcement officials recover $1.1 billion in fraudulently billed services and criminal activities aimed to exploit Medicare reimbursement policies.

Law enforcement officials still incorporate needed criminal convictions when certain schemes to defraud Medicaid or Medicaid are too egregious to pursue civil recoveries.

Banner Health settles False Claims Act violations for $18 million

Banner Health agreed to pay the US government $18 million to settle allegations that 12 Banner Health hospitals submitted Medicare claims for patient care even though patients could have been treated with a lower-cost option.

Banner Health knowingly billed Medicare for patients’ short-stay hospital visits when Banner Health should have billed for a less-costly and equally effective outpatient service, according to the DoJ.

READ MORE: The Progress and Challenges of the Affordable Care Act

“Hospitals that bill Medicare for more expensive services than are necessary will be held accountable,” said Special Agent in Charge for the Office of Inspector General of the US Department of Health and Human Services Christian J. Schrank.  “Medical decisions should be made based on patients’ conditions and needs, not on providers’ profits.”

The settlement will also require Banner Health to enter into a corporate integrity agreement and retain an independent contractor to review the company’s billing and claims to Medicare and Medicaid.

In addition, a whistleblower involved in the case will receive $3.3 million for filing an independent lawsuit under the False Claims Act whistleblower provisions.

“Taxpayers should not bear the burden of inpatient services that patients do not need,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Chad A. Readler.  

“The Department will continue its efforts to stop abuses of the nation’s health care resources and to ensure that patients receive the most appropriate care,” he said.

Florida-based Rotech settles False Claims Act liabilities for $9.68 million

READ MORE: OIG: Medicaid Fraud Control Units Recovered $1.8B in 2017

Rotech, a respiratory services provider based in Florida, will pay the US $9.68 million after submitting false claims to Medicare for portable oxygen devices that beneficiaries did not need.

The company admitted that it knowingly billed Medicare for delivering oxygen services to beneficiaries when there was no medical need, and billed Medicare even when the oxygen wasn’t delivered at all.

Rotech billed Medicare from January 2009 to March 2013 without confirming when beneficiaries needed oxygen services and knowingly submitted claims that were not eligible for federal reimbursement.

“This settlement serves as a warning to suppliers who bill first and ask questions later,” the Justice Department’s Readler said, who was additionally involved in this False Claims settlement. “We will investigate and take action against companies who cut corners and place profits over compliance with Medicare’s billing requirements.”

A whistleblower once again helped the government with a False Claims Act case and will receive $1.64 million for their involvement via an individual lawsuit to Rotech.

READ MORE: Medicare Fraud Cases Lead to Mix of Convictions, Settlements

“Many people believe that healthcare fraud is a victimless crime; I assure you it is not,” said United States Attorney of the Eastern District of Texas Joseph D. Brown.  

“Medicare is funded largely by you and me, the American taxpayers, and fraud contributes to runaway health care costs,” he continued.

“I commend the whistleblower who had the courage to come forward and who worked with investigators to get to the bottom of this case. Because of her, we were able to recoup millions of dollars improperly paid to Rotech.”

CA ambulance company employee receives 3-year prison sentence for Medicare fraud scheme

A former California ambulance company employee was sentenced to three years in prison for his role in a $1.1 million Medicare fraud scheme.  

Aharon Aron Krkasharyan, 54, of Los Angeles, California was sentenced in the Central District of California and will pay an additional $484,556 in conjunction with co-conspirators. He pleaded guilty to one count of conspiracy to commit healthcare fraud.

Krkasharyan and co-conspirators were employed by Mauran Ambulance Inc. and provided non-medical transportation to Medicare dialysis patients and knowingly billed Medicare even though the patients didn’t require the ambulatory care.

The group also convinced providers to conceal patients’ true medical conditions and alter paperwork to make it look like the ambulance transportation was necessary.

The prosecutors in the case found that Mauran billed $28 million in Medicare claims from June 2011 to April 2012 and that $6.6 million was fraudulently billed to Medicare. In addition, the legal team found that Medicare paid for at least $3 million of those fraudulent claims.

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