Health Care Fraud

Published on: December 31, 2020

Evidence found sufficient to convict defendant of conspiracy to commit healthcare fraud but wrong sentence imposed

Grow formed a company and teamed up with a compounding pharmacy called Patient Care America to market three of its compounded medications: a pain cream, a scare cream, and a metabolic vitamin. He recruited two sales representatives and paid them using a tiered multilevel pyramid structure which meant that commissions for the sales representatives were based on their own referrals and referrals made by representatives brought in by the representatives they brought in. He also recruited patients instead of doctors and used telemedicine companies to prescribe the creams and vitamins to patients. Some recruited patients were paid commissions for just ordering their own creams and vitamins and set up a phony survey program where Grow’s recruited patients were paid $1,000 per month to try the creams and vitamins and write about their experiences. The only purpose of the survey was to refer more beneficiaries and get paid commissions. Nothing was done with the results of the survey. Grow was charged and convicted of conspiracy to commit healthcare and wire fraud, committing healthcare fraud, conspiracy to receive and pay kickbacks.

Published on: December 28, 2020

Doctor’s conviction for unlawful distribution of Oxycodone upheld

by The Swartz Law Firm

Gayden’s career as a doctor ended after law enforcement began investigating his medical practice following tips that he was prescribing excessive amounts of Oxycodone. Drug Enforcement Agents reviewed his prescription records through the Florida Prescription Drug Monitoring Program (PDMP) and discovered that Gayden had a history of irregular prescribing practices including issuing scripts for opioids in higher quantities or greater potency and in greater frequency than the norm. The DEA issued a search warrant for his patient records. Through recordings made by undercover patient who visited his office they discovered long lines of patients waiting to get into Gayden’s office. Investigators also learned that Gayden insisted on cash only for his services.

Just before the five-year statute of limitations ran, a federal grand jury indicted Gayden on seven counts of unlawful distribution of a controlled substance in violation of 21 U.S.C. section 841(a)(1). Gayden was convicted following a jury trial and sentenced to 235 months in prison.

Published on: May 17, 2019

The ten-or-more victim enhancement for use rejected where information only sold not used

by The Swartz Law Firm

Corbett and Weaver worked at Florida Hospital near Orlando Florida. When Weaver held the position of release of information specialist he would download patients’ face sheets containing their name, health information, date of birth and social security number without authority to do so and sold them to coconspirators who, the government believed, intended to use the information to open credit card accounts and commit identity fraud. Corbett took over Weaver’s position as release of information specialist, he solicited her to obtain face sheets without authority and paid her for each assisting him obtain the information. Both were charged with conspiracy to obtain identifiable health information for commercial advantage and pleaded guilty.

The probation officer that calculated the sentencing guidelines recommended a two level enhancement for an offense that involve 10 or more victims under 2B1.1. the probation officer also calculated the Florida Hospital’s loss on costs associated with identifying and notifying patients whose individually identifiable health information was viewed without authorizations. This resulted in a 10 level enhancement. At sentencing the defendant objected to the loss amount on the grounds that the Florida Hospital’s expenses should have been excluded as cost incurred by victims primarily to aid the government in the prosecution and criminal investigation of the offense. She objected to the 10 or more victim enhancement on the grounds that the government only identified a handful at most who suffered any identifiable financial harm as a result of the conspiracy. The district court denied both objections.

Published on: December 26, 2018

Defendant changed his mind but about cooperating but it cost him his right to remain silent

by The Swartz Law Firm

Khaled Elbeblawy was convicted and sentenced in Miami federal court for conspiracy to commit health care fraud in violation of 18 U.S.C. 1349. His offense arose from his ownership and management of home health agencies that provided in-home medical nursing and other services to homebound patients which he used to defraud Medicare for millions of dollars. His fraud included billing Medicare for services that were never provided, paying doctors in case for referring patients, hiring patient recruiters and nurses for referrals. He would disguise check by inflating the rates paid for staffing services and described checks to patient recruiters as payments for consulting and other services.

After an investigation focused on Elbeblawy, he decided to cooperate with the government and helped investigators obtain evidence against his former conspirators. He signed a plea agreement and a written factual basis for the agreement. The agreement stated that the government would be free to use against him in any criminal proceedings any of the statement provided by him including the factual basis for the plea. After he signed the agreement, he changed his mind and refused to plead guilty and the government prosecuted him for the charges he was indicted. Prior to trial Elbeblawy filed a motion to suppress the signed factual basis for the plea agreement on the ground that he did not knowingly and voluntarily waive the Rule 11 and Rule 410 protections. The district court denied his motion.

Published on: November 30, 2018

Defendant’s change of heart cost him his right to silence

by The Swartz Law Firm

Elbeblawy was convicted and sentenced in Miami, Florida, for conspiracy to commit health care fraud in violation of 18 U.S.C. 1349. His offense arose from his ownership and management of home health agencies that provided in-home medical nursing and other services to homebound patients which he used to defraud Medicare for millions of dollars. His fraud included billing Medicare for services that were never provided, paying doctors in case for referring patients, hiring patient recruiters and nurses for referrals. He would disguise check by inflating the rates paid for staffing services and described checks to patient recruiters as payments for consulting and other services.

After an investigation focused on Elbeblawy, he decided to cooperate with the government and helped investigators obtain evidence against his former conspirators. He signed a plea agreement and a written factual basis for the agreement. The agreement stated that the government would be free to use against him in any criminal proceedings any of the statement provided by him including the factual basis for the plea. After he signed the agreement, he changed his mind and refused to plead guilty and the government prosecuted him for the charges he was indicted. Prior to trial Elbeblawy filed a motion to suppress the signed factual basis for the plea agreement on the ground that he did not knowingly and voluntarily waive the Rule 11 and Rule 410 protections. The district court denied his motion.

Published on: March 30, 2018

Sentence enhancements upheld for doctoring records after VA patient’s death

by The Swartz Law Firm

In this appeal Mathews Martinez appeals his 60 month sentence for his conviction for intentionally causing damage to a protected computer of the Department of Veterans Affairs and resulted in the modification and impairment of the medical care of an individual and for knowing altering ad making a false entry in date stored within the Department’s computer system with the intent to impede obstruct and influence the investigation and proper administration of a matter within the Department’s jurisdiction. Mathews was a nurse in the surgical intensive care unit of the VA hospital who did not record the changes in the patient’s vital signs during his stay in intensive care following heart surgery. Later the patient died of heart failure. When Matthews returned to work, he was confronted about the patient’s care. Knowing there would be an investigation, he went back into the patient’s records and entered numbers and notations.

Mathews challenged his enhanced sentence the court found that he did alter a substantial number of records and he altered essential and probative records. The court also enhanced his sentence because his victim was vulnerable and Mathews was in charge of the patient’s care. The court also determined that he tested positive for cocaine while on bond and found that it lacked any authority to grant him acceptance of responsibility reduction in his guidelines. The court ultimately found the guidelines range was insufficient and varied upward to a 60 month sentence.

Published on: February 16, 2018

Double jeopardy challenge rejected for therapists convicted of Medicare fraud

by The Swartz Law Firm

In US v Crabtree a therapist at a health care clinic in Miami was convicted along with her two therapist codefendants of conspiracy to commit health care fraud in violation of 18 U.S.C. 1349. In this appeal they raised several issues, including a constitutional challenge under the double jeopardy clause. The underlying facts involved the operation of a mental health centers in Florida and North Carolina called the Health Care Solutions Network (HCSN) which billed Medicare for over $63 million in fraudulent claims. Crabtree and two of the co-defendants were former employees of HCSN who worked therapists.

HCSN was set up as a “partial hospitalization program” (PHP) that was purportedly designed to provide intensive psychiatric therapy to patients with “serious and acutely symptomatic mental illnesses.” These programs serve as a bridge between restrictive in patient care (psychiatric hospitalization) and routine outpatient care.

A PHP complying with federal and state law may seek Medicare reimbursement for its services. However, HCSN was not following Medicare standards and practices. From intake to discharge HCSN organized its business around Medicare fraud by editing intake information, fabricating treatment plans, and falsifying therapy and treatment notes to support Medicare claims. Therapist fabricated therapy notes for absent patients, falsified details from therapy sessions, and cloned notes by copying and pasting therapy notes from one patient’s file to another’s.

At the conclusion of the first trial the jury acquitted Crabtree and her two codefendant therapists of the false statement counts but it failed to reach a verdict on the conspiracy counts. At the first trial the court gave an instruction for Pinkerton liability with the false statement instruction. Under the Pinkerton instruction if the jury found the defendant guilty of participating in conspiracy it could find the defendant guilty of the substantive false statement crime even though the defendant did not personally participate in the false statement crime. The defendants were retried and convicted of the conspiracy count at the second trial.

Published on: May 15, 2017

Convictions for massive federal Medicare fraud upheld

by The Swartz Law Firm

In United States v. Bergman the defendants were convicted following a jury trial of conspiracy to commit health care and wire fraud, paying bribes and kickbacks in connection with a federal health care benefit program. Bergman was sentenced to 180 months and the other defendant was sentenced to 150 months.

Bergman was a licensed physician’s assistant employed by American Therapeutic Corporation that operated a Partial Hospitalization Program (PHP). A PHP serves as a bridge between inpatient and outpatient care for patients with a psychiatric condition serious enough to possibly require hospitalization. A community mental health center such as ATC administers a PHP, which offer intensive outpatient psychiatric care including individual or group psychotherapy, counseling and other mental health services. Staff at a PHP includes psychiatrists as well as nurses, physician’s assistants, occupational therapists, physical therapists and social workers.

After ATC was founded it developed into an extensive Medicare scammed billed Medicare for approximately $200 million in claims. While ATC did have some patients who needed psychiatric help and qualified for service, most did not and ATC did not provide the individualized treatment required by Medicare. Doctors that came in generally did nothing.

In this case the defendants created fake medical records and recruited patients in exchange for kickbacks. ATC paid its patient recruiters hundreds of thousands of dollars each month in cash in order to avoid any red flags or paper trail. They even kept a log of kickbacks paid.

Published on: April 25, 2017

No Double Jeopardy violation for this Pill Mill conspiracy charge

by The Swartz Law Firm

In U.S. v. Votrobek the appellants were convicted by a jury of conspiracy to distribute drugs, conspiracy to launder money and substantive charges of money laundering and maintaining a place for unlawful drug distribution. The charges arose from their operation of a pill mill, a term used to describe a medical clinic that prescribes narcotics for illegitimate purposes. The appellants first learned how to run a pill mill clinic from a Zachary Rose who operated three clinics in Jacksonville Florida. Once law enforcement began investigating Rose’s clinics, the appellants left and established their own clinic, AMG, in the fashion of a typical pill mill.

Later, Votrobek was indicted for conspiracy to distribute Oxycodone and Alprazolam in Rose’s Florida clinics but a jury acquitted him.

Less than two months after his acquittal in Rose’s Florida pill mill, a Federal Grand jury in Georgia indicted Votrobek and others regarding their involvement in AMG, charging them with conspiracy to distribute Oxycodone, Xanax, and other drugs for other than a legitimate medical purpose. He was convicted on all counts. In his appeal, he claims the district court committed plain error by not dismissing the Georgia conspiracy charges on Double Jeopardy grounds. He argued the conspiracy counts were barred by Double Jeopardy and the trial court committed plain error by not dismissing the substantive convictions based on prejudicial spillover.

Published on: August 17, 2013

Health care fraud conviction reinstated after court of appeals finds the evidence of guilt was sufficient

by The Swartz Law Firm

From the 11th judicial circuit in Miami, Florida, in U.S. v. Vernon, the defendants were convicted of health care fraud following a trial. The charges involved dispensing factor medication, a blood clotting medication used to treat hemophilia. Defendant Vernon ran a specialty pharmacy that dispensed prescriptions for factor medication, an expensive medication that earned big profits as a result of the high Medicare reimbursement rate. In order to gain more factor medication business the business would pay individuals and businesses large percentages of its profit for referring their hemophiliac clients to the defendant’s company for filling prescriptions. Other defendants were paid kickbacks of up to 45 % of the profit earned from filling the prescriptions for clients. Another defendant, Waters, had several family members who were hemophiliacs and he moved these patients from the competitor to the Vernon’s pharmacy after he was hired by the company as a full time employee and he signed a contract as a hemophilia sales associate earning $400,000 in 2007, $700,000 in 2008, $325,000 in 2009, together with many fringe benefits. In exchange for these payments Waters ensured that his hemophiliac clients filled their medication through defendants’ company. He did not recruit new patients as his contract required. The jury found Vernon guilty of violating the anti-kickback statute, which criminalizes the offering or paying of kickbacks. Following the verdict the court set aside the guilty verdict and granting his Rule 29 motion. The government appealed. Two defendants appealed the denial of rule 29 motions.

The 11th Circuit reversed the district court’s order granting Vernon’s Rule 29 motion because it found sufficient evidence Vernon violated the Anti-Kickback statute,42 U.S.C. 1320a-7b(b)(2)(A) by knowingly and willfully paying money to Brill, who had “clients” that were also hemophilia patients. The evidence showed that the purported employee relationship between Waters and the Vernon’s company was sham. Waters worked at home rarely visiting the office, received no oversight or direction from the pharmacy, spent most of this time in casinos or performing other non-work related tasks. Another defendant, Brill, referred to Vernon’s pharmacy to fill their prescriptions in exchange for payments. The court rejected Vernon’s argument that the language “to induce” Brill “to refer an individual” to Vernon’s pharmacy was a term of art that means a request by a physician for an item or service. It found it included referring by any individual and could apply to Brill.

Vernon also argued the jury instruction misstated the anti-kickback law because it allowed the jury to convict him without finding the required nexus between the improper referrals and Medicare coverage that is without finding that Jeff Vernon and the pharmacy paid kickbacks for the referral of patients whose factor medication prescriptions were covered by Medicaid. He argued that the jury instructions allowed convictions so long as the referred patients received Medicaid benefits for some health care services, even services unrelated to the illegal referrals. The 11th Circuit found no error because any doubt left by the instruction was cured by the indictment itself which set forth the required nexus between federal health care benefits and the services provided to patients.