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Quick Reference: May 21, 2010 - The Health Alliance of Greater Cincinnati and the Christ Hospital to Pay $108 Million for Violating Anti-Kickback Statute and Defrauding Medicare and Medicaid – Read More January 21, 2010 - President of Medical Supply Company Pleads Guilty to Wire Fraud - Read More January 20, 2010 - Owner Indicted for Submitting False Billings to Medicare - Read More January 20, 2010 - Doctor, Office Manager Arrested and Charged with Health Care Fraud - Read More January 7, 2010 - Medical Practice Office Manager Sentenced On Mail Fraud And Tax Charges In Connection With Theft From Employer - Read More October 23, 2009 - Jury Convicts Logan Woman of Social Security Fraud: Convicted of illegally claiming more than $119,000 in benefits - Read More September 11, 2009 - Physician Sentenced to 84 Months for Illegal Prescription Drug Distribution - Read More | Search for News in Your Area
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The Health Alliance of Greater Cincinnati and the Christ Hospital to Pay $108 Million for Violating Anti-Kickback Statute and Defrauding Medicare and Medicaid (Criminal Division)
Washington - The Health Alliance of Greater Cincinnati and one of its former member hospitals, The Christ Hospital, have agreed to pay the United States $108 million to settle claims that they violated the Anti-Kickback Statute and the False Claims Act by paying unlawful remuneration to doctors in exchange for referring cardiac patients to The Christ Hospital in a pay-to-play scheme, the Justice Department announced on May 21, 2010.
The United States alleged that The Christ Hospital, a 555-bed acute care hospital located in Mount Auburn, Ohio, limited the opportunity to work at the Heart Station – an outpatient cardiology testing unit that provides non-invasive heart procedures – to those cardiologists who referred cardiac business to The Christ Hospital. The government further alleged that cardiologists whose referrals contributed at least two percent of the hospital’s yearly gross revenues were rewarded with a corresponding percentage of time at the Heart Station, where they had the opportunity to generate additional income by billing for the patients they treated at the unit and for any follow-up procedures that these patients required.
The government asserted that The Christ Hospital’s use of Heart Station panel time to induce lucrative cardiac referrals violated the federal Anti-Kickback Statute, which prohibits a hospital from offering or paying, or a physician from soliciting or receiving, anything of value in return for patient referrals. The United States also alleged that the claims The Christ Hospital submitted to Medicare and Medicaid as a result of this illegal kickback scheme constituted a violation of the False Claims Act.
“Health care providers should make medical decisions based on the needs of their patients, not on the financial interests of physicians or other providers,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We will not allow hospitals to put profits ahead of sound medical decision-making.”
The allegations resolved by today’s settlement were initiated by a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act, which allow private parties to file actions on behalf of the United States and share in any recovery. The whistleblower in this suit, Dr. Harry Fry, a cardiologist who formerly worked at The Christ Hospital, will receive $23.5 million.
“The False Claims Act is a valuable tool in deterring fraud, waste, and abuse in government,” stated Acting U.S. Attorney for this case William E. Hunt. “The law was put to good use in this case as the government was able to recover from those who sought to gain financially by jeopardizing the integrity of the health care system.”
Assistant Attorney General West noted that this settlement was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Ohio, the Office of the Inspector General of the U.S. Department of Health and Human Services, the Center for Medicare and Medicaid Services, and the FBI.
In joining today’s announcement, Daniel R. Levinson, Inspector General of the Department of Health and Human Services Office of Inspector General stated, “Kickbacks can distort clinical decisions, cause overutilization, increase costs, and threaten the quality of care provided to beneficiaries. The OIG, and its law enforcement partners, are committed to protecting the integrity of our federal health care programs and the health and welfare of the beneficiaries of those programs.”
Because The Christ Hospital declined to enter into a Corporate Integrity Agreement acceptable to the OIG, the OIG did not provide a release of its administrative exclusion authorities and is further evaluating the matter.
This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.8 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3.7 billion.
President of Medical Supply Company Pleads Guilty to Wire Fraud (U.S. Attorney for the Southern District of Ohio)
CINCINNATI – Barbara Rauen, 52, of Crestview Hills, Kentucky pleaded guilty on January 21, 2010, in United States District Court here to one count of wire fraud for embezzling more than $300,000 from Havel's, a specialty medical supplies distributor in Cincinnati. Rauen was president, chief executive officer and chief financial officer of the company from 1999 until she left the company on August 20, 2008.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the plea entered yesterday before Senior U.S. District Judge Herman J. Weber.
According to the a statement of facts filed with the plea, Rauen began embezzling funds from the company in about November 2002 by issuing company checks to herself and depositing them into her personal bank account. Rauen also issued company checks to creditors to pay off various personal debts. In order to hide these transactions and cover up the embezzlement, she falsified the company’s check registry so that the unauthorized checks appeared to be issued to a true associated business, or they were not recorded at all.
As a result of the scheme to defraud, Rauen obtained approximately $307,566.81 to which she was not entitled. In execution of the scheme, and in furtherance of it, Rauen used interstate wire communications by using online banking services and making online payments to reduce the balance owed on her personal credit card and other personal accounts. One such transaction occurred on November 28, 2007, when defendant Rauen made an unauthorized online payment from Havel’s company account, to her personal credit card in the amount of $19,982.00.
Wire fraud is punishable by a maximum sentence of 20 years. Judge Weber scheduled a sentencing hearing for Rauen for April 15, 2010 at 9 a.m.
Stewart commended the FBI agents who conducted the investigation and Assistant U.S. Attorney Anne Porter, who is prosecuting the case.
Owner Indicted for Submitting False Billings to Medicare (U.S. Attorney for the Southern District of Ohio)
LOUISVILLE, KY - U.S. Attorney Candace G. Hill of the Western District of Kentucky announced on January 20, 2010, that a federal grand jury in Louisville returned an indictment against Leobaldo Perez Gonzalez, age 50, of Miami, Florida, on charges of health care fraud, submitting false claims, and wire fraud.
The Indictment alleges that between 2007 through August of 2008, Leobaldo Perez Gonzalez through his corporation, Universal of Work Services, submitted false and fraudulent claims to the Centers for Medicaid and Medicare Services for products which were not authorized nor provided to patients. Specifically the indictment alleges that Leobaldo Perez Gonzalez submitted claims on behalf of Florida patients that were purportedly treated by Kentucky physicians, when in fact neither the patients nor the physicians had any knowledge of one another. Moreover, during their investigation, investigators learned that the products which Universal of Work Services claimed were provided were never provided. A search warrant was executed on the business, and the business was almost devoid of any of the products it claimed to have been providing.
In the event of a conviction, the maximum potential penalties are 35 years’ imprisonment, a $1,500,000 fine, and supervised release for a period of up to 5 years.
The case is being prosecuted by Assistant United States Attorney Lettricea Jefferson-Webb, and it was investigated by Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.
Perez Gonzalez is scheduled to appear for arraignment before the United States Magistrate Judge on, February 16, 2010, at 9:30 a.m., in Louisville, Kentucky.
Doctor, Office Manager Arrested and Charged with Health Care Fraud (U.S. Attorney for the Southern District of Ohio)
COLUMBUS – A federal grand jury here has indicted Dr. Charles C. Njoku, 60, of Powell, and Veronica Scott-Guiler, 41, of Orient, on January 20, 2010, who supervised his Columbus office, charging them with billing government health care insurance programs for physician services, including office visits and tests, that were not provided as billed. They are also charged with prescribing medicine without a legitimate medical purpose.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Richard Cordray, Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Division (FBI), and Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General (HHS), announced the indictment which was returned January 12 and unsealed today following the arrests of the defendants.
FBI and HHS agents along with agents from the Ohio Attorney General’s Health Care Fraud unit arrested the defendants this morning. They appeared before a U.S. Magistrate Judge Terence P. Kemp who ordered them released on their own recognizance. A date will be set for an arraignment.
Njoku had offices in Columbus and Akron and billed public health care programs under his own name and People’s Family Medical Center.
The indictment alleges that between 2005 and March, 2009, Njoku and Scott-Guiler billed the programs for office visits and tests that were not delivered as billed, including office visits billed to the program while Njoku was out of the country. The indictment also alleges that Njoku gave Scott-Guiler pre-signed prescription pads and allowed her to write and issue prescriptions to patients for narcotics and other medications while he was out of the country. And that Njoku allowed Scott-Guiler to see patients at his office then claiming that he had seen the patients when he submitted bills to the programs.
The indictment charges each of them with 14 counts of making false statements in connection with payment for health care services. Each count is punishable by a maximum sentence of five years imprisonment. The indictment also charges each defendant with one count of health care fraud, punishable by up to 10 years imprisonment, and four counts of illegal distribution of controlled substances, punishable by up to 20 years imprisonment. The indictment also charges Njoku with one count of distributing a controlled substance without the appropriate form as required by law. That is punishable by a maximum sentence of four years imprisonment.
Stewart commended the investigation which was by the Health Care Fraud Task Force, Assistant U.S. Attorney Andrew Malek, and Special Assistant U. S. Attorney Constance A. Nearhood with Ohio Attorney General Richard Cordray’s Office, who are prosecuting the case.
An indictment is merely an accusation. Defendants should be presumed innocent until and unless proven guilty in court.
Medical Practice Office Manager Sentenced On Mail Fraud And Tax Charges In Connection With Theft From Employer (U.S. Attorney for the Southern District of Ohio)
CINCINNATI – Karen S. Schmidt, 44, of Amberley Village was sentenced in United States District Court here on Jan. 7, 2010, to 21 months in prison, three years of supervised release, a $5,000 fine, and restitution. In May 2009 Schmidt pleaded guilty to one count of mail fraud and one count of filing a false federal income tax return with the Internal Revenue Service (IRS) in connection with stealing money from the medical practice where she worked as office manager.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Gerald A. O’Farrell, Assistant Inspector in Charge, U.S. Postal Inspection Service announced the sentence handed down today by Senior U.S. District Judge Herman J. Weber.
According to court documents, between May 2005 and November 2007, Schmidt charged personal purchases on company-owned credit cards, pocketed cash received from patients, and created false invoices which she sent to the company and paid them using company checks. As office manager, she attempted to conceal the fraud from auditors.
Schmidt admitted that she failed to report $38,298.09 taken from her employer on her 2005 federal income tax returns.
Senior Judge Weber ordered that Schmidt pay $55,910 in restitution to Ohio Valley Orthopaedics, and $10,723 in restitution to the IRS.
Stewart commended the joint investigation by FBI and IRS agents, and Assistant U.S. Attorney Jennifer Barry, who prosecuted the case.
Jury Convicts Logan Woman of Social Security Fraud: Convicted of illegally claiming more than $119,000 in benefits (U.S. Attorney for the Southern District of Ohio)
COLUMBUS – A United States District Court jury here on Oct. 22, 2009 convicted Teran Michelle Mohler, aka Teran Buchman, 35, of Logan of stealing $119,141 in Social Security benefits that were intended for the care of her minor child.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Elias Papoulias, Resident Agent in Charge, U.S. Social Security Administration Office of the Inspector General, and Dan Osborne, Acting Special Agent in Charge, U.S. Secret Service, announced the verdict returned today after a trial that began October 19 before United States District Judge Edmund A. Sargus, Jr.
Testimony presented during the trial showed that Mohler applied for Social Security benefits under the Mothers with Child in Care program, as well as survivor benefits for the child in 1991 after the child’s father died. Each year, Mohler certified that the child was still living with her, but testimony in the trial proved that the child actually lived with her grandmother.
Theft of benefits is punishable by up to ten years imprisonment and restitution. Judge Sargus will set a date for sentencing.
Stewart commended the Social Security and Secret Service agents who conducted the investigation along with Assistant U.S. Attorney Dale E. Williams, who prosecuted the case.
More information on the website for the United States Attorney's Office for the Southern District of Ohio - http://www.justice.gov/usao/ohs/
Physician Sentenced to 84 Months for Illegal Prescription Drug Distribution (U.S. Attorney for the Southern District of Ohio)
DAYTON – Dr. Richard Sievers, 53, of Oakwood, was sentenced in United States District Court here today to 84 months imprisonment for his participation in a scheme that resulted in the illegal distribution of more than 700,000 dosage units of controlled substances from a storefront medical clinic in Dayton between January and November 2007.
William E. Hunt, Acting United States Attorney for the Southern District of Ohio, Todd Spradling, Resident Agent in Charge, Drug Enforcement Administration (DEA), Dayton Field Office, Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation (FBI), and Commander John Burke of the Warren County Drug Task Force announced the sentence handed down today by U.S. District Judge Thomas M. Rose.
Sievers operated Walnut Hills Family Care, located at 1900 Wayne Avenue in Dayton. Sievers conspired with others to distribute prescription drugs including Amphetamine, OxyContin (oxycodone), Vicodin ES (hydrocodone), Xanax (alprazolam), and Methadone (methadose).
Sievers wrote or approved prescriptions that were not issued for a legitimate medical purpose and were not in the usual course of his medical practice. In particular, the "patients" were not given proper medical examinations prior to the issuance of the prescriptions for the controlled substances. The "patients" would then provide money in return for the issuance of the prescriptions. The “patients” picked up the prescriptions at Walnut Hills Family Care.
Sievers pleaded guilty on June 10, 1009 to one count of conspiracy to possess with intent to distribute narcotics. Ten people, including Sievers, were convicted in connection with the operation.
Hunt commended the cooperative investigation by the agents and officers, and Assistant U.S. Attorney Sheila Lafferty, who is prosecuting the case. The DEA Dayton Resident Office and the Warren County Drug Task Force began the investigation. Agencies participating in the investigation include the Dayton Police Department, the Montgomery County Sheriff’s Office, the Ohio State Board of Pharmacy, the Ohio State Medical Board and the U.S. Postal Inspection Service.
More information at the website of the U.S. Attorney for the Southern District of Ohio http://www.usdoj.gov/usao/ohs/
