Pennsylvania Man Creates Ambulance Company with "Straw Owner" and Gets Charged with Medicare Fraud

By Miles Indest

A Pennsylvania man has been charged in relation to an alleged scheme to defraud Medicare by billing for fraudulent ambulance services. The charges were announced by the Department of Justice (DOJ) on June 29, 2012.

Man Allegedly Started Ambulance Company With "Straw" Owner .

According to the indictment, the man allegedly used a "straw" owner (someone who was not actually the owner) to fraudulently open Starcare Ambulance because he was otherwise ineligible to own the company. Between 2006 and 2011, the man allegedly billed Medicare for transporting kidney dialysis patients who did not medically need ambulance service. This indictment seeks forfeiture of over $5 million in cash as well as a GMC Hum-V ("Hummer") vehicle.

If convicted of all charges, the defendant faces a statutory maximum sentence of ten years in prison on each of the health care fraud and conspiracy counts. He also faces five years in prison for aiding and abetting in false statements relating to health care fraud, a three year term of supervised release, and a fine of up to $250,000.

Ambulance Services Companies Are Target for Medicare Audits.

In recent years, and especially in 2012, ambulance services companies have become the target of Medicare audits and are frequently accused of billing Medicare for unnecessary services. Medicare and Medicaid audits can result in overpayment demands reaching into hundreds of thousands of dollars and assessment of fines. Ambulance services were included in the Department of Health and Human Services (DHHS) Office of the Inspector General (OIG) work plan for fiscal year 2012 as an area that would be subject to scrutiny. Zone Program Integrity Contractors (ZPICs) and Recovery Audit Contractors (RACs) are launching audits of ambulance service providers and emergency medical transportation companies.

Contact Health Law Attorneys Experienced in Handling Medicare Audits.

Medicare fraud is a serious crime and is vigorously investigated by the FBI and the U.S. Department of Health and Human Services (DHHS) Office of Inspector General (OIG). Don't wait until its too late. If you are concerned of any possible violations and would like a confidential consultation, contact a qualified health attorney familiar with medical billing and audits today.

The Health Law Firm’s attorneys routinely represent physicians, medical groups, clinics, pharmacies, ambulance services companies, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicaid and Medicare investigations, audits and recovery actions.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources Include:

"Pennsylvania Man Charged With $5.4 Million Medicare Fraud." San Francisco Chronicle. (June 29, 2012). From:
http://www.sfgate.com/news/article/Pa-man-charged-with-5-4-million-Medicare-fraud-3674333.php

Department of Justice, Office of Public Affairs. "Pennsylvania Man Charged with Fraud in Ambulance Scheme." Department of Justice. Press Release. (June 29, 2012). From: http://www.justice.gov/opa/pr/2012/June/12-crm-840.html

CMS Medicare Providers Can Submit Documents Electronically to CMS Contractors

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Medicare providers can submit medical documents to most of the Centers for Medicare & Medicaid Services (CMS) review contractors electronically. This includes the Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RACs) and will soon include several Zone Program Integrity Contractors (ZPICs).

CMS makes agreements with review contractors to identify and correct improper Medicare payments made to providers. Review contractors find the improper payments by selecting a small sample of claims and requesting medical documentation from the provider who submitted the claims. The review contractor then manually reviews the claims made against the medical documentation provided to verify the providers' compliance with Medicare's rules.

Medicare Providers Can Submit Medical Records to Many Review Contractors Electronically.

Currently, review contractors request medical documentation by sending a letter to the provider. These providers previously had two options for submitting the requested records:

1. Mail a hard copy of the records or
2. Fax the records.

Now, providers can submit medical records electronically to participating review contractors. CMS calls this new mechanism the Electronic Submission of Medical Documentation (esMD) program. For a chart illustrating how esMD words, click here.

Phase 1 of esMD Launched on September 15, 2011.

Phase 1 of the esMD program was initiated on September 15, 2011. During Phase 1 of esMD, Medicare providers still receive medical documentation requests via a letter in the mail. However, they have the option to electronically send medical records to the requesting review contractor.
During Phase 2 of esMD, providers will receive requests when their claims are selected for review electronically. CMS plans to initiate Phase 2 in the future but no specific date has been announced.

First Coast Service Options, Inc. Approved for Phase 1 of esMD.

Florida's Medicare Administrative Contractor (MAC), First Coast Service Options, Inc. (First Coast) has been approved by CMS to participate in Phase 1 of esMD. Florida Medicare providers who have been asked to submit records for review to First Coast can now submit them electronically.
Other review contractors who have been approved to participate in Phase 1 of esMD through May 2012 include:

• Region A Medicare Recovery Audit  (Diversified Collection Services, Inc. or "DCS")
• Region B Medicare Recovery Audit  (CGI Technologies and Solutions, Inc. or "CGI")
• Medicare Administrative J1 (Palmetto GBA)
• Medicare Administrative JF (J2 & J3) (Noridan)
• Medicare Administrative J4 (Trailblazer)
• Medicare Administrative J5 (Wisconsin Physicians Service or "WPS")
• Medicare Administrative J9 (First Coast Service Options Inc. "FCSO")
• Medicare Administrative J11 (Palmetto GBA)
• Medicare Administrative J12 (Novitas Solutions)
• Medicare Administrative J14 (NHIC, Corp. or "NHIC")
• Comprehensive Error Rate Testing (CERT) Contractor
• Program Error Rate Measurement (PERM) Contractor
• DME Medicare Administrative JA (NHIC, Corp. or "NHIC")
• DME Medicare Administrative JD (Noridian)
• Medicare Administrative J13 (National Government Services or "NGS")
• DME Medicare Administrative JB (National Government Services or "NGS")
• Medicare Administrative J10 (Cahaba)
• Region D Medicare Recovery Audit (Health Data Insights or "HDI")
• Medicare Administrative J15 (CGS Administrators, LLC or "CGS")
• DME Medicare Administrative JC (CGS Administrators, LLC or "CGS")
• Region C Medicare Recovery Auditor (Connolly).

Several of the ZPICs are planning on participating in the esMD program starting summer 2012. These include:

• ZPIC Zone 1 (SafeGuard Services LLC or "SGS")
• ZPIC Zone 7 (SafeGuard Services LLC or "SGS").

Providers Not Required to Submit Medical Records Electronically.

Medicare providers do not have to submit medical documentation electronically. The esMD program is completely voluntary.

If providers do want to participate in the esMD program, they must first find out if their review contractor accepst esMD transactions. Additionally, providers will have to obtain access to an esMD gateway. To obtain access to a gateway, providers can either build their own or hire a Health Information Handler (HIH) to construct the gateway system.

To find out which HIHs offer esMD gateway services to providers, click here.

To learn more about requirements for participating in the esMD program, click here.

Contact Health Law Attorneys Experienced with Medicare and Medicaid Audits.

The Health Law Firm's attorneys routinely represent physicians, medical groups, clinics, pharmacies, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicaid and Medicare investigations, audits and recovery actions. They also represent health providers in preparing and submitting corrective action plans (CAPs), requests for reconsideration, and appeal hearings, including Medicare administrative hearings before an administrative law judge.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at http://www.thehealthlawfirm.com/.

Sources Include:

Centers for Medicare & Medicaid Services. "Electronic Submission of Medical Documentation." Centers for Medicare & Medicaid Services. (Apr. 9, 2012). From:
http://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/ESMD/index.html?redirect=/esmd

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  http://www.thehealthlawfirm.com/  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Connecticut Attorney General Alleges Medicaid Fraud Scheme

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Connecticut Attorney General George Jepsen alleges that 28 individuals, dental practices and corporations were involved in a $24 million Medicaid fraud scheme. Jepsen filed a civil action  on May 31, 2012. It is the first case the state has initiated under the Connecticut False Claims Act. The Connecticut False Claims Act gives the state the ability to seek compensation for taxpayers from those who submit false claims for reimbursements they are not eligible to receive. To view the Connecticut False Claims Act, click here.

The complaint seeks restitution, treble damages and civil penalties as well as a permanent injunction against the unlawful acts and practices alleged in the complaint. To view the complaint, click here.

Despite Being Excluded from Medicare and Medicaid, Accused Individual Allegedly Found Ways to Bill Medicaid for Services.

According to the complaint, one of the individuals involved in the alleged fraud scheme was previously convicted of a felony in another state for submitting false health care claims. He was then permanently excluded by the U.S. Department of Health and Human Services (DHHS) from participation in Medicare and Medicaid, as a result of his conviction. Any entity with which he serves as an employee, administrator, operator or in any other capacity, were also excluded from state healthcare programs. The state alleges that, despite the exclusion, he established a number of dental practices in Connecticut that were operated by practicing dentists who billed Medicaid for services.

Allegedly, the excluded individual was actively involved in managing the practices and received millions of dollars in Medicaid reimbursements. The dental providers allegedly knew of the exclusion and did not disclose it on enrollment and re-enrollment forms for the Connecticut Medical Assistance Program.

Florida Has Similar False Claims Act.

Florida has a Medicaid False Claims Act similar to the one that Connecticut has. Florida's Medicaid False Claims Act can be found here. However, in Florida, a separate provision of the state's Medicaid law provides an award to a whistle-blower of up to 25% of any recovery. This is in Section 409.9203, Florida Statutes. In addition, Florida has a law that allows civil recovery for criminal acts such as Medicaid fraud, which is sometimes used by the Florida Attorney General and private individuals to recover money lost as a result of certain criminal conduct. For the Florida Civil Remedies for Criminal Actions law, click here.

As a general rule state false claims acts are modeled after the federal False Claims Act used to pursue Medicare fraud. For the federal Medicare Fraud False Claims Act, 31 U.S.C. § 3729, click here.

Contact Health Law Attorneys Experienced in Handling Medicaid and Medicare Fraud Cases.
The Health Law Firm's attorneys routinely represent physicians, dentists, nurses, medical groups, clinics, pharmacies, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicaid and Medicare investigations, audits, hearings and recovery actions. In addition The Health Law Firm represents health providers in Medicare exclusion actions and in being reinstated to the Medicare Program or being removed from the exclusion list.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at http://www.thehealthlawfirm.com/.

Sources:
Rees, Nick. "Jepsen alleges $24M Medicaid fraud." Legal Newsline. (June 4, 2012). From:
http://www.legalnewsline.com/news/contentview.asp?c=236342

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  http://www.thehealthlawfirm.com/  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.