Don’t Become a Statistic: Recent Cases Highlight the Severe Consequences of Federal Health Care Fraud Investigations

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In a recent report, the Office of Inspector General (OIG) of the Department of Health and Human Services stated that it expected to recover more than $2.77 billion as a result of healthcare fraud audits and investigations during the first half of its 2016 fiscal year. This represents an increase of more than $1 billion in restitution, criminal fines, civil penalties, and other payments by healthcare service providers and their owners and employees. The following are some real-life examples of healthcare fraud cases prosecuted by the OIG and the Department of Justice (DOJ) during this period.

Recent Examples of Federal Healthcare Fraud Investigations

1. Home Health Agency Owner Sentenced to Federal Prison and $4.5 Million in Restitution Payments

Following an investigation for Medicare fraud, the owner of a home health agency was sentenced to six years and eight months in federal prison and ordered to pay $4.5 million in restitution. The case involved a fraud scheme in which a total of 12 defendants ultimately pled guilty to charges including:

  • Billing Medicare for unnecessary home health care and therapy services
  • Paying kickbacks to physicians who referred Medicare beneficiaries
  • Paying kickbacks for false home health care certifications
  • Paying Medicare recipients to sign multiple blank physical therapy records
  • Selling information about Medicare recipients and fictitious patient files to other home health care agencies

2. Medical Equipment Distributor Agrees to $646 Million Kickback Settlement

The nation’s largest distributor of endoscopes and other medical devices agreed to a total settlement of $646 million to resolve allegations that it had paid illegal kickbacks to doctors and hospitals over a five-year period. This included payments in the form of consulting agreements, lavish meals and travel, grants, and free medical equipment. The overall settlement included a $310 million settlement under the False Claims Act relating to the company’s alleged involvement in the submission of fraudulent reimbursement requests to Medicare, Medicaid, and Tricare.

In addition to the financial settlement, the manufacturer also agreed to extensive audit requirements, enhanced board-member accountability, and implementation of risk assessment and mitigation programs.

3. Pharmacy CEO Sentenced to Prison, Fines, and Exclusion from Federal Benefit Programs

Consistent with the DOJ’s enhanced focus on individual accountability, in another case, a pharmacy CEO was sentenced to 10 years in prison, $8.8 million in restitution, and a 50-year ban from participation in federal healthcare programs for conspiracy to commit healthcare fraud. The conspiracy involved billing Medicare and private health insurance companies for prescription medications that had been provided to patients, returned, and then inappropriately re-dispensed to other patients in nursing homes and adult foster care homes. In total, Medicare and private insurers paid the pharmacy in excess of $79 million for adulterated and mislabeled medications.

Are You Facing a Federal Healthcare Fraud Investigation?

If you or your healthcare service or pharmacy company is facing a federal investigation, you need to seek experienced legal representation right away. At the The Criminal Defense Firm, our experienced defense attorneys and former federal healthcare prosecutors have an extensive track record of helping clients avoid both civil and criminal charges. For a free, confidential case evaluation, call our offices at 866-603-4540 or tell us about your investigation online now.

This information has been prepared for informational purposes only and does not constitute legal advice. This information may constitute attorney advertising in some jurisdictions. Reading of this information does not create an attorney-client relationship. Prior results do not guarantee similar future outcomes. The Criminal Defense Firm is a Texas firm with headquarters in Dallas.
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