Washington

June 8, 2010

The Physicians Clinic of Spokane Resolves Claim for Overcharging Medicare (U.S. Attorney for the Eastern District of Washington)

Spokane – On June 8, 2010, James A. McDevitt, United States Attorney for the Eastern District of Washington, announced that the Physicians Clinic of Spokane has paid the United States $656,000 to resolve allegations that it overcharged Medicare. The United States contended that from March 2002 to March 2007, Physicians Clinic of Spokane (PCS) performed certain blood tests, that is, lipid panel tests and a cholesterol test without any intervening review to determine whether the second test was medically necessary.

The second test (a Low Density Lipoprotein test) can only be billed to Medicare if it is performed after reading the first test results and then if it is determined to be medically necessary. Since the two tests occurred simultaneously, this was an improper testing and billing practice, according to Medicare’s rules and regulations. While the United States contended that PCS was civilly liable for the overbilling, PCS denied the Government’s contentions. PCS cooperated with the United States’ demands that they end the disputed lipid panel billing practice. The parties also reached an agreed settlement in order to quickly and economically resolve the Government’s allegations of overbilling.

James A. McDevitt, U.S. Attorney for the Eastern District of Washington, said, “The Department of Justice and the Office of Inspector General continue to be vigilant in investigating and pursuing Medicare overbilling. The taxpayers’ money must be used only for proper and authorized purposes.” “With the increased emphasis on health care reform and lowering costs, we need to hold Medicare service providers accountable for billing only for services that are medically necessary to maintain the integrity of the program,” said Sarah Allen, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of Inspector General.

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 $3 billion since January 2009 in cases involving fraud against federal health care programs. This investigation was conducted by the Office of Inspector General of the Department of Health and Human Services and the U.S. Attorney’s Office. Jill Bolton, Assistant U.S. Attorney for the Eastern District of Washington, represented the United States.

January 20, 2010

National Dental Management Company pays $24 Million to Resolve Fraud Allegations (Civil Division)

WASHINGTON - The United States announced on January 20, 2010, that it has settled False Claims Act allegations against FORBA Holdings LLC, a dental management company that provides business management and administrative services to 69 clinics nationwide known as “Small Smiles Centers.”  Under the agreement, FORBA will pay the United States and participating states $24 million, plus interest, to resolve allegations that it caused bills to be submitted to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid, which is funded jointly by the federal and state governments.  FORBA has further agreed to put in place various remedial measures designed to prevent similar unlawful conduct from occurring in the future.  The government’s investigation of individual dentists is ongoing, and FORBA is cooperating with that investigation by providing information about dentists who may have violated professional standards.  

The United States alleged that FORBA was liable for causing the submission of claims for reimbursement for a wide range of dental services provided to low-income children that were either medically unnecessary or performed in a manner that failed to meet professionally-recognized standards of care.  These services included performing pulpotomies (baby root canals), placing crowns, administering anesthesia (including nitrous oxide), performing extractions, and providing fillings and/or sealants.

“We have zero tolerance for those who break the law to exploit needy children,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.  “Illegal conduct like this endangers a child’s well-being, distorts the judgments of health care professionals, and puts corporate profits ahead of patient safety.” 

Assistant Attorney General West praised the collaborative efforts of the federal and state agencies that made this result possible.  The Justice Department’s Civil Division and the U.S. Attorneys’ Offices for the District of Maryland, the Western District of Virginia, the District of South Carolina, and the District of Colorado handled these cases.  The Civil Division led the nationwide investigation, which was conducted by the Office of Inspector General for the Department of Health and Human Services, the Federal Bureau of Investigation, and the National Association of Medicaid Fraud Control Units.

To resolve the allegations against it, FORBA will pay $24 million, plus interest.  The federal share of the civil settlement is $14,285,645, and the states’ Medicaid share is $9,714,355.25.  In addition, as part of the settlement, FORBA has agreed to enter into an expansive five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services.  The agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.  Specifically, FORBA must engage external reviewers to monitor its quality of care and reimbursement processes.  In addition, the chief dental officer must develop and implement policies and procedures to ensure that the Small Smiles clinics provide services consistent with professionally recognized standards of care.  FORBA has also agreed to cooperate in the government’s continuing investigation of individual dentists.      

“We will not tolerate Medicaid providers who prey on vulnerable children and seek unjust enrichment at taxpayers’ expense,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.  “This settlement reaffirms our commitment to protect the health and well-being of Medicaid beneficiaries and to ensure the integrity of this essential health care program.”

“Health care providers must be held accountable when they mistreat patients and overcharge insurers,” said Rod J. Rosenstein, U.S. Attorney for the District of Maryland.  “We are committed to using our affirmative civil enforcement authority to protect patients from inadequate care and protect governmental health coverage programs from fraudulent charges.”

The government’s investigation was initiated by three lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in any recovery.  These actions are pending in the U.S.  District Courts for the District of Maryland, the Western District of Virginia, and the District of South Carolina.  As part of today’s resolution, the three whistleblowers will receive payments totaling more than $2.4 million from the federal share of the settlement.

“In this case, FORBA put greed and profits before the well-being of children,” said Timothy J. Heaphy, U.S. Attorney for the Western District of Virginia. “It endangered the health and safety of innocent children and defrauded the taxpayer of millions of dollars.  Today’s settlement addresses these egregious acts and sends a clear message that Medicaid fraud will be expeditiously addressed by this Department.”

This settlement with FORBA 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 Department of Justice has used to recover approximately $2.2 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 billion.

November 11, 2009

Health Care Professional Sentenced to Prison for Product Tampering (U.S. Attorney for the Western District of Washington)

DREA LYNNE GIBSON, 43, of Fall City, Washington, was sentenced today in U.S. District Court in Seattle to a year and a day in prison and three years of supervised release for product tampering in violation of federal law.  GIBSON pleaded guilty in May 2009, admitting that she tampered with doses of Demerol, a narcotic pain medication, at the surgical center where she worked.  At sentencing U.S. District Judge Ricardo Martinez said, “This is an extremely serious offense.  Using Demerol for herself is one thing, stealing it is another.  But replacing it with something else takes it to another level.  Replacing the Demerol with epinephrine shows she was willing to put other people in pain and even at risk of death to treat her own pain.“

According to filings in the case, while employed as a nurse at the Plastic Surgery Center in Bellevue, Washington, GIBSON fed her addiction to Demerol by stealing glass vials of Demerol from a locked case at the surgery center.  She completed records indicating the drugs were being administered to patients.  As her addiction worsened, in October and November, 2008, GIBSON would break open and consume the contents of Demerol ampules, refilling those ampules with saline solution, and then super-glueing the ampules back together, and returning the ampules to the Demerol box.  As a result, ampules containing saline solution, secured by super glue, were disguised to appear as genuine Demerol ampules.  On multiple occasions during November, 2008, anesthesiologists at the clinic administered the tampered ampules to patients recovering from surgery under the belief that they were administering Demerol.  When patients complained that their pain was not being relieved, the anesthesiologist switched pain medications and administered fentanyl to relieve the pain.

GIBSON had been a Washington State licensed registered nurse since 1995.  However, in 2001, GIBSON was sanctioned by the Washington State Nursing Commission for removing a patient’s prescription for oxycodone, a Schedule II controlled substance, while working at Olympic Memorial Hospital in Port Angeles, Washington, and attempting to fill that prescription for herself at a local pharmacy.  In 2003, GIBSON was hired at the Plastic Surgery Center.  She was fired in November 2008, when the drug diversion was discovered.

In requesting a prison sentence for GILBERT, Assistant United States Attorney Patricia Lally wrote to the court, “Drea Gibson’s on-going conduct put many unsuspecting patients at risk.  Not only did some patients unnecessarily experience pain during surgical procedures because they were injected with saline instead of the prescribed anesthetic but these same patients were placed at risk of infection from Gibson’s non-sterile handling of the tampered ampules.”

National statistics show an increasing level of unlawful drug diversion and abuse of pharmaceutical controlled substances, as well as overdoses of such drugs resulting in rising medical costs.  Studies reflect that hospital admissions attributable to prescription drug abuse and overdose have increased 500% over the last 10 years, and are currently costing the United States more than $1 billion dollars in health care costs each year.  The unlawful possession and diversion of such substances by individuals – be it by patients, non-patients, or by medical professionals, contributes to this escalating problem, poses a danger to the user and to others, and constitutes a violation of law. 

This case is part of a continuing Organized Crime and Drug Enforcement Task Force (OCDETF) investigation focused upon the unlawful diversion of pharmaceutical controlled substances within the Western District of Washington and elsewhere.  This case was investigated by the Drug Enforcement Administration, the Food and Drug Administration Office of Criminal Investigation (FDA-CI), the Washington State Department of Health, and the Bellevue Washington Police Department.    

The case was prosecuted by Assistant United States Attorneys Patricia Lally and Ronald J. Friedman.

More information on the U.S. Attorney's Office for Western District of Washington -- http://www.justice.gov/usao/waw/

October 5, 2009

South Sound Doctor, Accused of Health Care Fraud, Returned to U.S. After Being Detained in Madagascar (U.S. Attorney for the Western District of Washington)

ANTOINE JOHNSON, 38, a former resident of Aberdeen, Washington, was expected to make an initial appearance in U.S. District Court in Atlanta on Oct. 5, 2009, following his brief detention in Madagascar, an island country off the southeastern coast of Africa. JOHNSON has been charged in a criminal complaint issued in the Western District of Washington with Conspiracy to Commit Health Care Fraud. JOHNSON was initially detained by Madagascar law enforcement, who had learned that his U.S. Passport had expired, and that there was a U.S. warrant out for his arrest. After spending a short time in local custody in Madagascar pending deportation proceedings, JOHNSON agreed to return to the United States voluntarily. Johnson was accompanied on the flight to the United States by a U.S. law enforcement agent, and was arrested October 3, 2009, on his arrival in the United States. It is expected that Johnson will be transported by the U.S. Marshal Service to Western Washington.

According to the criminal complaint filed in late January 2009, and unsealed this morning, JOHNSON owned four medical clinics in Western Washington. The clinics are located in Aberdeen, Olympia, Lakewood and Tacoma, Washington. The investigation began following an audit by the Washington State Department of Social and Health Services (DSHS) of Medicaid billing practices at the clinic. In addition, law enforcement investigated information obtained by the Grays Harbor County Drug Task Force that the clinics were dispensing narcotic prescriptions for cash payments, without examining the patient. Undercover agents visited the clinics on multiple occasions posing as patients. A review of bills received by the state following those visits indicate that the clinics billed for a higher level of service than was actually provided, and for services not provided. LAWANDA JOHNSON, the mother of ANTOINE JOHNSON, is also charged in the criminal complaint, for her involvement in the billing practices at the clinic. LAWANDA JOHNSON remains a fugitive whose last known residence was in Madagascar. The JOHNSONS closed their clinics and left the United States shortly after search warrants were executed at the four clinics and the residence of LAWANDA JOHNSON in January 2009.

Conspiracy to Commit Health Care Fraud is punishable by up to five years in prison and three years of supervised release.