Tennessee

June 30, 2010

Settlement Reached with Benchmark Physical Therapy (U.S. Attorney’s Office for the Eastern District of Tennessee)

Chattanooga - Benchmark Rehabilitation Partners, LLC, doing business as Benchmark Physical Therapy, has entered into a settlement with the United States and the State of Tennessee to pay over $1.8 million resolving allegations that it improperly billed the Medicare and TennCare/Medicaid programs for physical therapy services in violation of federal and state laws and regulations, U.S. Attorney Russ Dedrick announced on June 30, 2010.

Benchmark provides physical therapy services to Medicare and TennCare/Medicaid patients in East Tennessee. The United States and the State of Tennessee alleged that Benchmark violated the federal False Claims Act and the Tennessee Medicaid False Claims Act by submitting claims to the TennCare program for physical therapy that were not reimbursable. Specifically, the governments' claim was that between 2001 and 2006, Benchmark submitted claims representing that it had provided therapeutic exercise for TennCare patients when medical records indicated that the patients had instead received aquatic therapy, a service subject to reimbursement restrictions.

The United States also alleged that Benchmark submitted claims through the Medicare program for physical therapy services which did not qualify for payment or were not medically necessary. As a result of the settlement, Benchmark will pay $190,977.75 to the State of Tennessee and $1,625,489.25 to the United States.

"These funds will compensate the Medicare and Medicaid trust funds and TennCare for moneys paid out of those funds which Benchmark improperly claimed and received during that time period," said U.S. Attorney Dedrick. "This settlement reflects our continued efforts to protect the trust funds supporting the Medicare, Medicaid and TennCare programs which provide crucial health care to our most vulnerable citizens."

U.S. Attorney Dedrick further noted that the settlement resulted from a comprehensive investigation which began in 2006. After an administrative subpoena was served on Benchmark in January 2008, Benchmark became aware of and began cooperating with the investigation including providing numerous patient charts and other Benchmark records. Benchmark has denied any wrongdoing in agreeing to the settlement. The investigation did not reveal patient quality of care concerns.

This joint investigation was conducted by the United States Attorney's Office, Eastern District of Tennessee, local Health Care Fraud Task Force members, the U.S. Department of Health and Human Service - Office of Inspector General (HHS-OIG) and the FBI. The Office of the Attorney General of the State of Tennessee and the Tennessee Bureau of Investigation also cooperated in the investigation and the resulting negotiated settlement. U. S. Attorney Dedrick commended the efforts of FBI Special Agent Anthony Tuggle, FBI Forensic Accountant Leann Lanz, and HHS-OIG Special Agent Tony Maffei for their roles in the investigation as well as Assistant United States Attorneys Kent Anderson and Betsy Tonkin who were responsible for the oversight of the civil investigation for the U. S. Attorney's Office.

June 28, 2010

Federal Jury Convicts Psychologist for False Billings to Medicare/Medicaid (U.S. Attorney for the Western District of Tennessee)

Jackson, TN - Lorne Allan Semrau, 64 of Jackson, Tennessee, was convicted by a federal jury on June 17, 2010, for three counts of submitting false and fraudulent claims to defraud health care benefits programs such as Medicare and Medicaid in Tennessee and Mississippi announced Lawrence J. Laurenzi, United States Attorney for the Western District of Tennessee.  The three week trial was held before United States District Court Chief Judge Jon P. McCalla in Jackson.  Sentencing is set for September 9, 2010. 

Semrau was indicted in June 2007 and at that time was the Owner, President and CEO of Superior Life Care Services and Foundation Life Care Services.  According to the indictment, Semrau contracted with nursing homes in Tennessee and Mississippi to provide medication and mental health  services to residents.  Semrau then allegedly contracted with psychiatrists to perform the medication and mental health services pursuant to the nursing home contracts. As stated in the indictment, Semrau then implemented a billing scheme to defraud Medicare, Medicaid and others by submitting, through his companies Superior and Foundation, claims for services that were not provided by the physicians and claims which Semrau knew to be false.  Between 1999 and 2005 Semrau submitted fraudulent billings to health care benefit programs in excess of $3,000,000.

The health care fraud charges carry a penalty of not more than ten (10) years imprisonment, $250,000.00 fine, with three years supervised release and a special assessment of fine $100 per count.

This indictment follows an investigation by the United States Attorney’s Health Care Fraud Task Force in the Western District of Tennessee.  Special Agents of the Department of Health and Human Services - Office of the Inspector General, the  Federal Bureau of Investigation and the Tennessee Bureau of Investigation- Medicaid Fraud Control Unit conducted this investigation.  Assistant United States Attorneys Stuart J. Canale and Kevin Whitmore are handling the case for the United States.

January 12, 2010

Owners of Murfreesboro Ambulance Service Arrested on Medicare Fraud and Wire Fraud Charges (U.S. Attorney for the Middle District of Tennessee)

NASHVILLE, Tenn. – January 12, 2010 - Woody Medlock, Sr., his wife, Kathy Medlock, and son, Woody Medlock, Jr., of Murfreesboro, Tennessee, were arrested on January 12, 2010, on charges of conspiracy, Medicare fraud and wire fraud.  The indictment was returned by a federal grand jury in Nashville on January 6, 2010.  Woody Medlock, Sr., 66, and his wife, Kathy Medlock, 54, are the owners and operators of the Murfreesboro Ambulance Service.  Woody Medlock, Jr., 44, is a supervisor for the ambulance service.   The indictment represents the culmination of a joint federal and state investigation into alleged fraudulent billing practices of Murfreesboro Ambulance Service to Medicare and Medicaid for transportation of dialysis patients.

The thirty-five count indictment alleges that from some time in 1996 through September 2008, the Medlocks conspired and engaged in a scheme to defraud Medicare and Medicaid by submitting claims for payment for the transportation of patients who were not qualified to receive ambulance transportation.  The indictment alleges that the Medlocks submitted or caused to be submitted, through Murfreesboro Ambulance Service, fraudulent claims to Medicare and Medicaid for reimbursement of ambulance transports of beneficiaries to and from dialysis totaling at least $1,000,000, and resulting in payments from Medicare of at least $ $486,813.83, and from Medicaid of at least $101,000.  The indictment further alleges that the fraudulent claims falsely represented that medically necessary ambulance services were provided to beneficiaries to and from dialysis, when such services were not medically necessary; that beneficiaries were transported on a stretcher in the ambulance, when in fact, beneficiaries were seated in the front seat of the ambulance or in the captain’s chair/jump seat in the back of the ambulance and not on stretchers; that beneficiaries transported to and from dialysis suffered from various medical conditions and diagnoses identified on the claims forms in order to qualify the transports for reimbursement were false; and that beneficiaries were transported individually when multiple patients had been transported simultaneously in one ambulance. 

If convicted, the Medlocks face up to 20 years in prison and a $250,000 fine.  Any sentence following conviction will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes. 

This case is being investigated by the United States Department of Health and Human Services, Office of Inspector General, the Memphis Field Office of the Federal Bureau of Investigation and the Tennessee Bureau of Investigation.  The United States is represented by Assistant United States Attorneys John K. Webb and Sandra G. Moses.

An indictment is merely an allegation and is not evidence of guilt.  A charged defendant is presumed innocent and is entitled to a jury trial at which the Government would bear the burden of proof beyond a reasonable doubt as to each count of the information.

November 19, 2009

Memphian Sentenced for Medicare Fraud (U.S. Attorney for the Western District of Tennessee)

Memphis, TN- Rosetta Perkins-Brown, 66 of Memphis, was sentenced in federal court by U. S. District Court Judge J. Daniel Breen to 18 months in prison for Medicare Fraud announced Lawrence J. Laurenzi, United States Attorney for the Western District of Tennessee. Perkins plead to an Information in February 2009.
According to testimony in Court, Perkins filed a false cost report in 2000 causing approximately $312,000 in improper payments from Medicare to her company, Elder Care Home Health Services, Inc. Perkins is the 30 year owner of Elder Care which is located at 3318 Millbranch in Memphis.

In December 2008, Larry Vernell Bullock, 51 of Memphis, a co-defendant in this matter and CPA for Elder Care Home, plead guilty to Medicare Fraud and was sentenced in April 2009 to 12 months in federal prison and also ordered to pay restitution in the amount of 342,000. According to the Information he assisted Perkins in filing false Medicare cost reports for reimbursement in the amounts of $22,000 for professional fees, $146,000 for owner’s compensation, $98,000 for sick pay, and approximately $76,000 for vacation pay.

“Healthcare is a topic of everyone’s concern and with increasing costs and a declining economy, the U. S. Attorney’s Office recognizes the importance of diligently pursuing and prosecuting those individuals who attempt to defraud the government,” said US Attorney Laurenzi. “Dollars paid for fraudulently billed services to Medicare take away from those who honestly need care.”

“Any time false claims on a cost report are submitted for payment, the Medicare program and beneficiaries suffer,” said Derrick Jackson, Assistant Special Agent In Charge. “Ensuring the integrity of Medicare remains a top priority for the Inspector General.”

This case was investigated by U. S. Department of Health and Human Services-Office of the Inspector General. Assistant United States Attorney Stuart Canale handled the case for the government.

For more information, visit the website of the United States Attorney's Office for the Western District of Tennessee at: http://www.justice.gov/usao/tnw/index.html

June 11, 2009

Settlement Reached With Tenncare Provider For Drug Overbilling (U.S. Attorney for the Eastern District of Tennessee)

United States Attorney Russ Dedrick announced today that Louisville-based company Kindred Healthcare, Inc. and its successor PharMerica Healthcare Pharmacy, LLC, have agreed to a settlement to pay over $1.3 million to settle claims that Kindred violated state and federal laws regarding over-billing TennCare and the Medicaid program for pharmaceuticals. Kindred provides medications to TennCare patients in group homes and long-term care facilities throughout Tennessee. U.S. Attorney Dedrick alleged that from 2003 through 2006, Kindred's Knoxville facility billed for a higher number of drugs than were actually administered. In some cases, the overbilling was for multiple times the proper amount. There was no allegation that any patient at the facility received an improper dosage.

This settlement resulted from a comprehensive investigation which began as a result of allegations brought by a former billing clerk employee of Kindred in a lawsuit filed on behalf of both the United States and the State of Tennessee under the qui tam provisions of the federal False Claims Act and the Tennessee Medicaid False Claims Act. Under the terms of the settlement agreement, the former employee will receive over $200,000 from the proceeds of the settlement for her role in filing the complaint and cooperating with the investigation.

The joint investigation was conducted by the TennCare Provider Fraud Task Force, which consists of the Tennessee Attorney General's Office, the Tennessee Bureau of Investigation Medicaid Fraud Control Unit (TBI) , TennCare, and the U.S. Department of Health and Human Services Office of Inspector General, and the United States Attorney’s Office, Eastern District of Tennessee.

“Coordinated efforts such as this investigation and settlement play an important role in protecting the TennCare and Medicaid trust funds to ensure these programs remain available for those who need them,” said U.S. Attorney Dedrick. In addition, he noted: “Deterrence of fraud, waste, and abuse in the nation’s healthcare programs is a top priority of the Justice Department.”

U. S. Attorney Dedrick specifically recognized the dedicated efforts of TBI Special Agent Dave Slagle for his lead role in the investigation as well as Senior Counsel Peter Coughlan with the State Attorney General’s Office and Assistant United States Attorney Elizabeth Tonkin.

For additional information, please contact United States Attorney Russ Dedrick, 865-545-4167, Assistant U.S. Attorney Elizabeth S. Tonkin, 865-545-4167, or Public Information Officer Sharry Dedman-Beard, 865-545-4167.

A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Tennessee at: http://www.usdoj.gov/usao/tne/pr/2009/June/Kindred%20Healthcare.htm

June 9, 2009

Davidson County Women Plead Guilty To Health Care Fraud Conspiracy Involving More Than $1.1 Million (U.S. Attorney for the Middle District of Tennessee)

Nashville, Tennessee – Glenesha Moye, 35 and Tabitha Jones, 35, both of Nashville,  pleaded guilty on June 4, 2009,  to a six-count federal information in connection with a health care fraud conspiracy that cost Medicare and TennCare a combined total of more than $1.1 million, announced Edward M. Yarbrough, the United States Attorney for the Middle District of Tennessee; My Harrison, Special Agent in Charge (SAC) of the Memphis Division of the Federal Bureau of Investigation (FBI); Melody Jackson, SAC of the Department of Health and Human Services (HHS), Office of Inspector General, Office of Investigations, Atlanta Regional Office; Christopher R. Pikelis, SAC of the Internal Revenue Service (IRS) Criminal Investigations Nashville Field Office; Gordon S. Heddell, Inspector General of the United States Department of Labor  and Mark Gwyn, Director of the Tennessee Bureau of Investigation (TBI).

Moye and Jones pleaded guilty before United States District Judge Aleta A. Trauger.  In pleading guilty, both individuals admitted that from January 2005 through January 2008, they conspired to defraud Medicare and TennCare of more than $1.1 million.  According to testimony at the plea hearing, the conspiracy and scheme to defraud involved submitting claims to Medicare and TennCare for services that were either never provided to a beneficiary or that were provided to a beneficiary by personnel not licensed by the State of Tennessee to perform the services in question.  Such claims were fraudulently submitted through EBC Healthcare, a company owned and operated by Moye and Jones, who certified compliance, but knowingly failed to comply with applicable Medicare and TennCare policies.  These policies required accurate identification of services by numeric identifiers commonly called “CPT Codes” and provision of services by licensed health care professionals or properly supervised, unlicensed individuals.    Additionally, during the plea hearing, both Moye and Jones admitted to engaging in money laundering transactions related to the proceeds of the health care fraud scheme.  Judge Trauger is scheduled to sentence both defendants in November, 2009.
           
“At a time when health care costs consume an ever increasing percentage of our nation’s resources, it is essential that individuals defrauding Medicare and TennCare be brought to justice,” said Yarbrough. “These guilty pleas are just one example of this office’s continuing commitment to stamping out health care fraud and abuse.”
           
Yarbrough praised the efforts of agencies during the course of the investigation, noting their continued commitment to work together as a team to investigate health care fraud. This investigation was conducted jointly by the FBI, HHS Office of Inspector General, IRS Criminal Investigations, DOL Office of Inspector General, and the TBI.  The United States is represented by Assistant United States Attorney Matthew J. Everitt.