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Top Healthcare Fraud Enforcement Actions of 2020

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As we look back on an incredibly tumultuous year in healthcare, let’s explore some of the most significant healthcare fraud cases in 2020. While much of the year has focused on COVID-19, the number of fraud cases relating to opioid prescription abuse, Medicaid and Medicare claim abuses, and illegal drug distribution continued to trend. In this post, we discuss some of 2020’s notable healthcare fraud cases from the OIG and DOJ. 

False Claims within Medicare and Medicaid Networks

Psychiatrist charged with falsifying Medicare claims for over $10 million.
Massachusetts psychiatrist Gustavo Kinrys billed Medicare and private insurance companies for over $10 million in treatments he did not provide and then obstructed justice in an attempt to conceal his crimes. He was indicted on seven counts of wire fraud, six counts of false statements relating to healthcare matters, one count of falsification of documents, and one count of obstructing a criminal health care investigation.  Between January 2015 and December 2018, Kinrys engaged in various fraudulent billing schemes in which he sought and received reimbursement for services he did not render. For example, Kinrys billed Medicare and private insurers over $10 million for thousands of TMS sessions he never provided, including over 8,000 sessions he claimed were provided to 75 patients who, in fact, never received a single session of the therapy. Kinrys allegedly billed Medicare and private insurers for hundreds of thousands of dollars’ worth of psychotherapy sessions he never provided, including over 1,000 face-to-face sessions he falsely claimed he provided while he or his patients were, in fact, out of the country.
Atlanta-based home healthcare provider defrauds Medicaid out of $1 million
Sentenced for defrauding Medicaid out of nearly $1 million. Diandra Bankhead, the owner, and operator of Elite, submitted thousands of fraudulent claims for services that were never provided to medically fragile children under the Georgia Pediatric Program. Elite Homecare submitted more than 5,400 claims to Georgia Medicaid between September 2015 and April 2018—the vast majority of which were fraudulent—and for which Elite received $1.2 million in reimbursement. Bankhead submitted fraudulent claims for in-home nursing services allegedly provided to families who had not retained Elite to provide any services, in the names of multiple individuals, including RNs, who did not provide the services in question and did know that their identities and credentials were being used. On December 2, 2020, in Atlanta, Georgia,  Bankhead was sentenced to five years and three months in federal prison, and three years of supervised release, and ordered to pay $999,999 in restitution.

Prescribers and Pharmacists Involved in Illegal Opioid Prescriptions

Dr. Felicia Lyn Donald illegally operated a “pill mill,” prescribing $1.2+ million in opioids.
Dr. Donald organized, led, and operated a prescription “pill mill” from at least April 2016 through April 2020. She distributed over 1.2 million milligrams of Schedule II opioids at or above the CDC’s guideline for dosages that a practitioner should avoid, with a total street value of over $1.2 million, and illegally distributed at least 325,190 mg of oxycodone and other Schedule II controlled substances. Donald prescribed opioids to addicts and/or drug dealers who had traveled from out-of-state or long distances to her practice, individuals that informed Donald of their pending drug charges, individuals whom Donald knew had failed urine toxicology screens, individuals who Donald knew were selling the pills that she prescribed to them. Donald prescribed opioids and alprazolam, which she admitted is a dangerous combination of drugs that could have killed or caused serious bodily injury to the ultimate users. She paid employees, in part, with opioid prescriptions rather than through paychecks. She also gave blank prescriptions to members of her medical office staff and other co-conspirators for their personal use. On December 1, 2020, in Alexandria, Virginia, Donald was sentenced to seven years in prison.
North Carolina pharmacy owner and pharmacist charged with a $1+ million fine for illegally dispensing opioids.
A North Carolina pharmacy, Seashore Drugs, Inc., its owner John D. Waggett, and its pharmacist-in-charge Billy W. King II, were sentenced to pay $1,050,000.00 in civil penalties and to cease dispensing opioids or other controlled substances on December 17, 2020, in Raleigh, North Carolina. Seashore Drugs, Waggett, and King failed to take the required steps to resolve red flags and ensure the prescriptions’ legitimacy before filling them. The red flags allegedly ignored by Seashore Drugs, Waggett, and King were numerous, including combinations of controlled substances that were highly unlikely to serve a legitimate medical purpose, extremely high doses of opioids dispensed for years on end, and repeated early fills with prescriptions allowing individuals, over time, to receive many extra doses of opioids and other controlled substances. 

Provider Owners Got Creative and Ambitious

Owner of a group of related durable medical equipment (DME) companies guilty of taking part in $16 million kickback conspiracy.
Albert Davydov took part in a conspiracy to pay kickbacks in exchange for durable medical equipment, totaling $16 million dollars.  Davydov participated in a scheme to pay kickbacks in exchange for doctors’ orders for medically unnecessary orthotic braces. Once Davydov and his conspirators received the completed doctor’s orders, they billed Medicare and other federal and private health care benefit programs for the braces. Davydov concealed his ownership of the DME companies by falsely reporting to Medicare that various straw owners owned the companies.  The conspiracy charge to which Davydov pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense, whichever is greatest, which was given on November 13, 2020, in Newark, New Jersey. Sentencing is scheduled for March 25, 2021.
Owner of Texas hospice companies sentenced to pay $150 million for healthcare fraud and money laundering scheme.
A corporate executive has been ordered to serve 20 years in prison after his conviction related to falsely telling thousands of patients with long-term incurable diseases, such as Alzheimer’s and dementia, they had less than six months to live and subsequently enrolling them in hospice programs. Rodney Mesquias and his co-conspirator Henry McInnis were both convicted of one count each of conspiracy to commit healthcare fraud, conspiracy to commit money laundering, and conspiracy to obstruct justice as well as six counts of healthcare fraud. Mesquias was separately convicted on one count of conspiracy to pay and receive kickbacks.   From 2009 to 2018, Mesquias orchestrated a scheme that involved $150 million in false and fraudulent claims for hospice and other healthcare services. Mesquias owned and controlled the Merida Group, a large healthcare company that operated dozens of locations throughout Texas. Mesquias and the Merida Group adopted a strategy to market their hospice programs as providing medical benefits “you don’t have to die to use.” They also aggressively enrolled patients with long-term incurable diseases, such as Alzheimers and dementia, and limited mental capacity who lived at group homes, nursing homes, and in housing projects.

2020 Healthcare Fraud Enforcement Trend Analysis

According to the OIG, in 2019, the Department of Justice (DOJ) opened 1,060 new criminal health care fraud investigations, with federal prosecutors filing criminal charges in 485 cases involving 814 defendants. At the end of September 2020, the DOJ has filed criminal charges for 345 defendants. This shows an upward trend in fraud cases throughout our healthcare system.  While no segment or specialty is immune to fraud, services that disproportionately treat vulnerable populations can be especially prone to fraud and abuse and go unnoticed longer, given barriers to patient self-advocacy and reporting. Prescribing physicians and pharmacies continue to drive the opioid crisis and require a multi-pronged approach to detect fraudulent and abusive practices.  We’re also paying special attention to first-tier, downstream, and related entities and their owners, which are often overlooked populations for healthcare organizations. In our monitoring, we often see excluded providers and suppliers sneaking back into the healthcare ecosystem by attempting to hide behind the corporate veil.  ProviderTrust’s monitoring services play a pivotal role in fraud detection and compliance programs. Whether you need to improve oversight of your employees, ordering, referring, or prescribing physicians, vendors, or provider networks, we can ensure you have the best data available to detect bad actors that are preying on your patients.

It's time for smarter exclusion monitoring.

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