Physician Law Blog

On June 18, 2015, the US Attorney announced two investigations resulting in a number of accusations of Medicare and Medicaid fraud and abuse. The “Home Alone IV” take-down and the largest national health care fraud take-down to date involving more than 200 subjects accused of defrauding Medicare and Medicaid of more than $700 Million in 14 states. Each of these takedown operations demonstrate just how seriously the Health Care Fraud Prevention and Enforcement Action Team (HEAT) is in its efforts to reduce fraud and abuse in healthcare operations.

Summer’s almost here and the weather is heating up for HEAT, the Department of Justice’s (DOJ) task force to combat healthcare fraud. This whistleblower initiated action was brought to the attention of the government by a former pharmacist employed by PharMerica. The settlement announced today relates to allegations of dispensing Schedule II controlled drugs without a valid prescription resulting in violation of the False Claims Act for submitting false claims to Medicare for the improperly dispensed drugs.

False Claims Act (FCA) allegations are serious business. Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs. Omnicare learned the hard way just how serious FCA actions can be when a whistleblower made allegations against it.

Fraud and Abuse in healthcare remains a hot issue, as evidenced by recent HEAT announcements. Following three qui tam (whistleblower) actions being filed, the Department of Justice announced it would intervene in the consolidated lawsuits. At issue was whether HCR Manorcare exerted pressure on SNF administrators and rehabilitation therapists to provide medically unnecessary and unreasonable services by administering additional treatments to qualify for the highest Medicare payments. Allegations also claimed HCR Manorcare kept patients in its facilities even though they were medically ready for discharge.

On February 10, 2015, the Seventh Court of Appeals decided the matter of U.S. v. Kamal Patel, No. 14-2607, upholding the conviction of a physician for violating the anti-kickback statute.