Tennessee
Quick Reference: July 15, 2011 –Physician Receives One Year Prison Sentence for Health Care Fraud and Tax Offenses – Read More July 13, 2011 –TennCare Fraud Settlement Announced– Read More May 26, 2011 –United States Awarded $82.6 Million Against Renal Care Group & Fresenius Medical Care in Medicare Fraud Case – Read More |  |
Physician Receives One Year Prison Sentence for Health Care Fraud and Tax Offenses
Knoxville - Allen R. Foster, M.D., 49, a resident of Gatlinburg, Tenn., who previously practiced medicine in the Morristown and Knoxville areas, was sentenced today by the Honorable Thomas W. Phillips, U.S. District Judge, to serve one year in federal prison, followed by three years of supervised release. Foster was also ordered to pay restitution to Medicare in the amount of $74,307 and to TennCare in the amount of $65,837. Additionally, Foster was ordered to pay $596,761.07, in restitution to the Internal Revenue Service (IRS). This sentence follows Foster's February 22, 2011, guilty pleas to health care fraud and tax related offenses. Pursuant to the plea agreement, Foster also agreed to surrender his license to practice medicine to the Tennessee Board of Medical Examiners.
On February 2, 2011, U.S. Attorney William C. Killian filed an information in U.S. District Court charging Foster with engaging in a scheme to defraud Medicare and TennCare by fraudulently billing those health care benefit programs for 15-minute office visit codes for "fast-track" patients who actually did not have a 15-minute office visit encounter with a provider at Foster's practice. Foster was also charged with a criminal tax offense arising from his failure to file a tax return for the calendar year 2005.
According to court documents Foster admitted that in 2006 and 2007, he practiced medicine in Morristown and Knoxville, operating his medical practice under various names including Advanced Pain Therapeutic, P.C., Fosterkare Anesthetist Associates, P.C., FKA Pain Management, and AF Pain Management. During that time, Foster's medical practice employed a system known as the "fast-track" system as a way to coordinate his medical practice’s high volume of established patient office visits. Under this fast-track system, Foster's established pain management patients were provided prescriptions during monthly visits without having a face-to-face encounter with a licensed provider, that is a physician, physician assistant or nurse practitioner.
Even though no 15-minute face-to-face encounter occurred between a fast-track patient and one of Foster's providers, Foster still caused every fast-track patient encounter to be submitted and billed to Medicare and TennCare as an office visit billing code that anticipated a 15-minute office visit, which paid a higher reimbursement rate than a billing code for an office visit that did not include a face-to-face encounter with a provider.
"Health care fraud hurts all Americans by wasting precious taxpayer dollars on claims for services that are medically unnecessary, or as in this case, were never even provided," said U.S. Attorney Bill Killian. He further added, "The U.S. Attorney's Office, working together with its law enforcement partners at the Tennessee Bureau of Investigation, Federal Bureau of Investigation, and Health and Human Services, Office of Inspector General, will continue to aggressively investigate and prosecute health care fraud crimes in the east Tennessee community."
As for the tax offense charged in the information, court documents also show that Foster admitted that during the 2005 tax year, he worked by contract for various hospitals and owned and operated a financially successful medical practice located in Morristown, Tenn. Based on his gross income that year, he was obligated to file an income tax return, but failed to timely file a tax return.
This case was investigated by the Tennessee Bureau of Investigation, Federal Bureau of Investigation, Health and Human Services, Office of Inspector General, and the IRS- Criminal Investigation. Assistant United States Attorney Trey Hamilton represented the United States.
TennCare Fraud Settlement Announced
Knoxville - A $220,000 civil fraud settlement has been reached with two Florida-based providers of mental health services, announced Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee and Tennessee Attorney General Robert Cooper, Jr.
Paradigm Health Services, Inc. and Paradigm Health, LLC., (Paradigm) which provide psychotherapy and mental health evaluations to residents of Tennessee nursing homes, entered into the settlement with the United States and the State of Tennessee on July 13, 2011. The settlement includes $112,000 recovered on behalf of the state’s Medicaid program, TennCare, and $108,000 on behalf of Medicare.
“Ensuring accountability in federally funded health care programs remains a high priority of this office”, said U.S. Attorney Jerry E. Martin. “We will continue our aggressive pursuit with the Tennessee Attorney General in uncovering fraudulent conduct by those in the health care industry and ensuring that proper safeguards are implemented to prevent fraud.”
In praising the settlement, Attorney General Robert Cooper stressed the duty of healthcare providers to have procedures in place to safeguard against fraudulent billing. “It is incumbent upon all TennCare providers to verify that their employees properly document the services they provide,” he said.
The settlement is the result of an investigation into the fraudulent actions of a former Paradigm employee and Licensed Clinical Social Worker, Renee Vaughn. Beginning in 2003 and continuing through 2006, Vaughn caused TennCare to be fraudulently billed for therapy sessions that she purportedly provided for Tennessee nursing home residents. Specifically, Vaughn submitted multiple invoices, claiming dozens of patient therapy sessions when she had in fact, had either not seen the patient billed for, or had spent only moments with the patient and had not provided any meaningful service to the patient.
Vaughn was charged with health care fraud in September, 2009 and pleaded guilty in U.S. District Court in November, 2009. She was sentenced to three years probation in February, 2010 and was also ordered to pay $43,743.26 in restitution to TennCare and $41,956.74 in restitution to Medicare. The civil settlement with Paradigm announced today is in addition to the restitution previously ordered to be made by Vaughn.
There was no evidence that Paradigm was actually aware of Vaughn’s criminal conduct, and Paradigm does not admit liability in the settlement. Vaughn has been excluded from future participation in any federal healthcare program.
In addition to the civil settlement, Paradigm will enter into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which requires the company to enact certain policies and procedures designed to detect and minimize instances of fraud and abuse.
This case was investigated by the HHS-OIG. The United States was represented by AUSA Ellen Bowden McIntyre and the State of Tennessee was represented by Peter Coughlan of the Medicaid Fraud & Integrity Division of the Tennessee Attorney General’s Office.
United States Awarded $82.6 Million Against Renal Care Group & Fresenius Medical Care in Medicare Fraud Case
NASHVILLE - The United States was awarded $82,642,592 plus costs today in a "whisteblower" case, after U.S. District Court Judge William J. Haynes, Jr. found Renal Care Group (RCG), Renal Care Group Supply Company (RCGSC) and Fresenius Medical Care Holdings, Inc. (FMC) recklessly disregarded federal law when billing the Medicare program for home dialysis supplies and equipment from 1999 to 2005. The case was filed in St. Louis in 2005 and was subsequently transferred to the Middle District of Tennessee.
“We are pleased with the Court’s ruling and hope it sends a message to the local healthcare community that the Department of Justice will aggressively pursue fraud and abuse, and protect the taxpayers’ interests,” said Jerry E. Martin, United States Attorney for the Middle District of Tennessee.
The Court's orders in this case discuss the concerns of multiple RCG employees who complained about the operation and Medicare billing activity of the RCGSC, including one regional manager who wrote, "I do not wish to go to jail," and felt the company’s actions “were not in the best interests of patients," after receiving a corporate directive about converting patients into the RCGSC.
Renal Care Group argued that they did not violate Medicare rules because of industry standards and certain disclosures to Medicare that RCG claimed to have made. However, the Court rejected those arguments because of the clarity of the Medicare requirements and RCG’s reckless disregard for Medicare’s legal mandates. The Court stated that the “Defendants cannot effectively set aside those commands by their cited interactions with Medicare officials.” The Court further noted that RCG failed to heed the advice of the company's lawyers when operating the supply company, and also discussed an internal audit of the supply company that found that 100% of the company's files were missing information that Medicare required for billing.
Renal Care Group was a publicly traded for-profit corporation and dialysis provider until it merged with dialysis industry competitor Fresenius Medical Care. RCG had it’s principal place of business in Nashville, Tennessee, and had locations throughout Missouri, including multiple facilities around the St. Louis metropolitan area. RCGSC was a Tennessee corporation that was owned and operated by RCG. In August 2009, a District Court judge in St. Louis transferred the case to the Middle District of Tennessee for trial, finding that a trial in Nashville, Tennessee would be more convenient for many witnesses.
FMC now owns and operates RCG's dialysis facilities after the merger with RCG. RCG and FMC provided renal dialysis and related services to patients with End-Stage Renal Disease (ESRD). ESRD is a life threatening condition in which a patient's kidneys are unable to remove toxins from the blood, thus necessitating some form of dialysis treatment. This condition is often suffered by patients who have experienced chronic kidney disease over a period of time. The government's Medicare program generally provides coverage for ESRD patients.
The government's complaint alleged that between January 1999 and December 2005, RCGSC submitted claims to the Medicare program for home dialysis supplies provided to ESRD patients for reimbursement of the supplies and equipment. All of these claims, as well as related claims for support services rendered by RCG dialysis clinics were false because the defendants were prohibited from and not qualified to bill Medicare for these home dialysis patients. Under federal law, the Medicare program pays companies that provide dialysis supplies to ESRD patients only if the companies that provide the supplies are truly independent from dialysis facilities and the ESRD patient chooses to receive supplies from the independent supply company. Defendants set up a sham billing company, RCGSC, that was not independent from RCG. Further, RCG interfered with ESRD patients' choice of supply options, requiring patients to "move" to RCGSC. Even after RCG employees raised concerns and industry competitors closed their supply companies, RCG kept RCGSC open because of the illicit revenue it created.
The case was investigated by Federal Bureau of Investigation and the Office of Inspector General for the Department of Health and Human Services. The case was litigated by attorneys in the United States Attorney’s Office in the Eastern District of Missouri, Assistant United States Attorney Lisa Rivera of the Middle District of Tennessee, and John Henebery of the Civil Division of the United States Department of Justice.
