HHS-OIG Scrutinizing Billing Practices, Working Healthcare Fraud Cases

Last year, Bill Root knocked on the front door of the home of yet another Medicare beneficiary in the South who had been prescribed an expensive electric wheelchair. After flashing his credentials, Root was invited inside, where he eyed a year-old, unused wheelchair sitting in a corner of the living room with a potted plant in the seat.

Root shook his head. As suspected, the Medicare beneficiary hadn't ordered the wheelchair, didn't need it, and when it arrived simply found a place to store it.

"It's really disheartening to visit these beneficiaries who were completely in the dark and had no idea that Medicare had paid $6,000 for something that someone else who didn't qualify might actually need," said Root, assistant special agent in charge (ASAIC) of Louisiana and Arkansas for the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) regional office in Dallas, who has worked healthcare fraud cases since 1981. He had recognized the prescribed wheelchair as part of a durable medical equipment (DME) scheme the was investigating in Baton Rouge, La. Data-driven information had alerted the OIG of uncommonly high DME activity in the area. "Add to that, some doctors were getting referral fees of $500 per script for an unnecessary wheelchair. Some were writing 200 scripts a year. That's sad."

In midsummer, the Medicare Fraud Strike Force made national headlines when 94 doctors, healthcare company owners, executives and others were charged for more than $251 million in alleged false billing nationwide. The operation involving nearly 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies signaled the largest federal healthcare fraud takedown since Medicare Fraud Strike Force operations began in 2007. Medicare fraud-related offenses include conspiracy to defraud the Medicare program, criminal false claims, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of fraud schemes, including physical therapy and occupational therapy schemes, home healthcare schemes, HIV infusion fraud schemes, and DME schemes.

Derrick Jackson, special agent in charge (SAIC) for the Atlanta region, said the OIG office is seeing all types of Medicare fraud. "We've worked a few psychiatry cases where individuals were going into senior citizen (centers) and performing so-called psychotherapy," he said. "We're finding in some of those cases that they aren't licensed therapists and also they're basically providing games such as bingo, fishing trips, trips to the movies, but they're billing Medicare for psychotherapy."

In Mississippi, two criminal healthcare fraud trials took place last year. On May 24, Wayne Rogers and Latanicia McMillan of Moss Point–executives with Primary Physical Medicine–were convicted at trial in connection with an $8 million healthcare fraud scheme. Rogers was sentenced to 135 months in prison; McMillan was sentenced to 188 months in prison. In June, Theddis Pearson and Telandra Jones–executives with Statewide Physical Medicine Group, Inc., which had offices in Moss Point, Hattiesburg, Jackson and Meridian–were convicted at trial on July 2 in connection with an $18 million healthcare fraud scheme. Pearson and Jones were each sentenced to 120 months in prison. Both Primary Physical Medicine and Statewide Physical Medicine employed non-licensed personnel to provide medically unnecessary physical therapy.

In the case involving McMillan and Rogers, the evidence at trial showed that McMillan ran the daily operations of Primary Physical Medicine, Inc., which had offices in Gautier, Durant, and Tupelo. The company claimed to provide physical therapy services to Medicare beneficiaries in their homes. McMillan oversaw the scheme, which consisted of claims being submitted to Medicare representing therapy services that had been provided by a doctor. None of those services billed to Medicare were provided by a doctor. Instead, the therapy services were overseen by Rogers, who was not a physician or a physical therapist. Even though unqualified to do so, Rogers trained other employees to provide therapy services who had no previous experience in physical therapy and were trained for about two weeks before being sent alone into the homes of Medicare beneficiaries. The defendants over-billed Medicare for the services they claimed to have rendered, routinely submitting claims to Medicare that alleged the therapy services lasted between five to nine hours per patient, per day.

Over the course of 18 months, the defendants billed Medicare for false claims of more than $18 million, and were paid more than $8 million.

"The trend has shifted away from physical therapy fraud to other areas, including hospice fraud," said Chris Covington, ASAIC for Kentucky, Mississippi and Tennessee in the HHS-OIG regional office in Nashville, Tenn. "The OIG is seeing more and more patients who aren't hospice-eligible. The patients aren't terminally ill. Hospice care is being prescribed by the hospice's medical director rather than the patient's primary care physician. The patients are receiving home-maker services rather than end-of-life care. This results in millions of dollars in medically unnecessary payments by Medicare."

Covington emphasized that physicians are the gate-keepers for most healthcare services.

"Fraudulent providers often pressure physicians for their signatures for services ranging from power wheelchairs to home health care," he said. "The OIG encourages physicians to exercise their medical judgment before ordering any product or service–just as they would when writing a prescription for a controlled substance. Physicians are the first-line of defense when it comes to combating healthcare fraud."

Covington noted that Medicare fraud occurs in both urban and rural areas—wherever there are Medicare beneficiaries.

"The fraud is driven by greed and the belief that Medicare is an easy target," he explained. "As the sentences in recent cases demonstrate, healthcare fraud is a serious crime with serious consequences. HHS-OIG and its partners at the FBI and U.S. Attorney's Office are committed to investigating and prosecuting those who target the Medicare program."

Covington urges physicians and other healthcare professionals to report suspected Medicare fraud by calling (800) HHS-TIPS.

For more information on the DOJ/DHHS Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative that includes Medicare Fraud Strike Force teams, visit http://www.stopmedicarefraud.gov.

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