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The advice is simple: Don’t do it.
Or as Annette Smith, a self-employed Medicare reimbursement specialist in Dover, said, “You don’t mess with the federal government. Reimbursement is just like taxes, you don’t play around, you do it right.”

And most physicians and healthcare providers listen, but in some cases — some spectacular cases — they don’t. Arkansas healthcare providers have, for the most part, listened.

Not that the possibility of current investigations don’t exist.

“I cannot comment on any on-going investigation, which would obviously include any of the health care fraud investigations we currently have” said Acting United States Attorney Jane Duke. “However, the United States Attorney’s Office for the Eastern District of Arkansas is committed to doing everything possible to prevent fraud and waste within any federal health care benefit program. We encourage individuals employed in the health care field to bring forth allegations of fraud to the appropriate authorities so that those allegations can be adequately investigated and, if substantiated, vigorously prosecuted.”

A search of the Department of Justice’s Web site showed three Medicare reimbursement fraud cases in Arkansas since 1998, and none involved individual doctors. Instead, the cases involved large healthcare groups that had done business in Arkansas.

The most notable was HCA when it pled guilty in 2000 and agreed to pay more than $840 million in criminal fines, civil penalties and damages for alleged unlawful billing practices. At the time, it was largest government fraud settlement ever reached by the Justice Department.

The attorney general at the time, Janet Reno, said, “Federal health care programs operate on the good faith and honesty of health care providers. The government will not tolerate misuse of the reimbursement systems for financial gain and will hold the responsible parties accountable for their conduct.”

Another case involved Dr. Jim Naples, one of six Texarkana podiatrists who were indicted on charges of federal racketeering and healthcare fraud. Since it was in the Eastern District of Texas, it didn’t appear on the Arkansas search. The case ended up being a 134-count indictment for Naples and Drs. Frederick Day, Glenn Feeback, Phillip Hahn, Gregg Petty and John White. Also indicted were Linda Velvin, Cynthia Capps, Shannon Richardson and New Boston (Texas) General Hospital.

Why the hospital?
Naples co-owned and controlled the facility and the scheme was audacious, according to the court documents. Naples, Velvin, an RN, and two unindicted co-conspirators, Drs. Nicholas Bachynsky and Joseph Greenspan, billed Medicare and private insurance companies for treating cancer patients at New Boston General.

The court documents lay it out: “Naples allegedly treated patients with an experimental and non-approved treatment commonly known as DNP (2,4-dinitrophenol), which is a Class V poison used in pesticides and wood preservatives, then billed Medicare and Medicaid for the treatment. As a Doctor of Podiatric Medicine, Naples is unqualified to treat cancer patients because it is beyond the scope of his training and license.”

And if that wasn’t enough: “Each defendant engaged in acts of mail fraud, wire fraud and obstruction of justice. In particular, Naples, Capps, and Richardson are accused of conspiring to obstruct the investigation by means of bribery, falsifying or concealing documents, resisting Grand Jury subpoenas, intimidating witnesses, and perjury.”

The results came quickly.

“Dr. Naples entered a plea of guilty to obstruction and a two-year probationary period,” said Wes Rivers, the assistant U.S. attorney for the Eastern District of Texas. The pleading came at the end of 2004, and Rivers, who works in the Tyler, Texas office, prosecuted the case. “The remaining podiatrists entered into pre-trial diversions.”

This is the legal equivalent of lifetime probation, or, in other words, you aren’t in trouble now, but if you do it again, prison awaits.

Rivers added that while the U.S. Attorney’s office looks into cases of Medicare fraud “fairly often,” he typically did not prosecute those cases.

Assets were also forfeited from facilities including New Boston General, Specialty Foot Clinic in Texarkana, El Dorado Foot Clinic and Regional Foot and Ankle Clinic in Texarkana. Also seized were two other buildings, plus a Beechcraft airplane that belonged to Naples.

The 63-bed hospital was closed June 30, 2006, according to the Texas Department of Health. The hospital, first opened in 1987, was also known as Doctors Hospital since its ownership group comprised physicians. On June 28, 2004, the facility became known as the Living Hope New Boston Medical Center and was operated by Living Hope in Texarkana. A year later, the hospital sits empty and its phone number is disconnected.

None of the doctors indicted in the case are currently licensed to work in Arkansas or Texas.

The Case in Florida
What happened in Texarkana pales in comparison to the case in South Florida.
The Southern District of Florida was called by The Washington Post, “the nation’s largest hot spot for health-care malfeasance.”

The case centers on a billing scheme by a variety of medical equipment companies, which the government alleges billed more than $142 million in illegal Medicare charges.

And that’s just the first phase of the investigation.

The government formed a multi-agency team to investigate Medicare fraud, using real-time analysis of billing data as an investigative tool in cases involving infusion therapy and durable medical equipment sales.

“Through the collaborative efforts of federal, state and local law enforcement and other agencies, we will concentrate our efforts,” said Attorney General Alberto Gonzales. “The Medicare Fraud Strike Force will allow us to have real-time access to Medicare billing data and provide authority to move quickly to make arrests and bring prosecutions as quickly as possible. With better tools and information sharing, we can expect greater levels of enforcement.”

A total of 38 people have been arrested so far, and the government plans on starting the second phase soon.

One example in the Florida case provided by both the Department of Justice’s press release and The Washington Post story was Eduardo Moreno, a medical equipment supply company owner.

Moreno was named in a six-count indictment on fraud charges for allegedly billing Medicare for more than $1.9 million in services that were not medically necessary. For example, Moreno was billing the government $868.85 for air mattresses.

As a result, the FBI seized some of Moreno’s assets, including his Rolls Royce Phantom, worth $200,000.



July 2007

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