Physicians now appear to be more than ever at a greater risk of investigation for healthcare crimes, largely due to their “gatekeeping” function concerning a patient’s need for medical services and the government’s increased willingness to pursue cases tied to questionable medical necessity. In fact, the recent Medicare fraud indictment of Dr. Solomon E. Melgen of Florida, who is also charged with Sen. Robert Menendez (D-NJ) in a separate federal corruption case, underscores recent efforts by law enforcement to pursue complex cases and high-profile targets. Dr. Melgen is not alone; federal and state authorities have pursued physicians for a wide range of conduct over the past year, and the matters that follow are but a sampling of these cases.

It must be remembered, however, that physicians are involved, as witnesses or subjects, in many other cases in which a provider is charged criminally but the physician is not. Nevertheless, physicians are particularly attractive targets for federal prosecutors due to the “special skill” and “abuse of trust” sentencing enhancements found in the U.S. Sentencing Guidelines. As a result, physicians and those employing them must be more vigilant. Compliance counsel, in particular, should consider the risks an organization faces in the development of compliance-auditing regimes, as well as the need to hire outside counsel to proactively confront a criminal investigation should one arise.

Lab Schemes

Ur-ine – You’re Out

Dr. Punyamurtula Kishore of Massachusetts was recently found guilty of fraudulently billing for unnecessary drug testing. Dr. Kishore allegedly collected urine samples from drug treatment centers and billed the Medicaid provider for testing them, even though the patients were not being treated by his clinics and the tests were not medically necessary. He was sentenced to 11 months in prison, forced to surrender his medical license, and ordered to pay $9.3 million in restitution.

Blood Money

Two New Jersey physicians recently pleaded guilty in connection with the long-term Biodiagnostic Laboratory Services LLC bribery investigation by the U.S. Attorney’s office for the District of New Jersey. Biodiagnostic paid numerous physicians thousands of dollars per month in cash in return for blood specimen referrals. Twenty-four other physicians previously pleaded guilty.

Patient-Related Offenses

Neglect

Dr. Dipak Desai of Nevada was found guilty by a state jury in July 2013 for second-degree murder and other criminal charges in connection with the use of medical instruments, supplies, and drugs contaminated with hepatitis C. Not to be left out, the federal government charged Dr. Desai with overstating the amount of time his anesthetists spent with patients on procedures related to the same hepatitis C incident. He recently pleaded guilty to federal healthcare fraud and conspiracy charges for overbilling Medicare, Medicaid, and various private insurers.

Inducements

Nine New York physicians were recently charged in a 199-count indictment along with 14 others for an alleged scheme to use a network of individuals to recruit homeless people and Medicaid recipients for medical services. Per the indictment, the patients were sent to clinics around New York City for unnecessary tests, often resulting in fraudulent diagnoses. In addition, the indictment alleges that the physicians billed for services that were not provided or that were upcoded. After their medical adventures, the patients would be given sneakers, shoes, or boots, often available in clinic basement rooms with selections that rivaled many shoe stores.

Drug Cases

Pill Mills

Dr. Mudassar Sharif of New Jersey was recently charged with illegally dispensing prescription pills. Dr. Sharif allegedly prescribed narcotics and other controlled substances without a legitimate medical purpose and outside the bounds of professional medical practice to drug seekers and drug abusers. In response to “an issue with Medicare or Medicaid,” Dr. Sharif allegedly sought to settle an outstanding debt owed by a recipient of his illegally prescribed narcotics in exchange for that person’s burning down his medical office building that housed his files.

Have I Got a Deal for You – Adulterated Drugs

Dr. Raymond Sean Brown of Tennessee was sentenced to 28 months in prison for the use of misbranded drugs with the intent to defraud. Over a four-year period, Dr. Brown purchased 254 vials of non-FDA-approved Botox but billed Medicare for legitimate Botox injections, including thousands of injections he did not provide. Dr. Brown was also ordered to forfeit $6.765 million seized from his bank accounts and pay an additional $717,000 in restitution.

Sharing Is a Good Thing – Right?

The recent federal indictment against Dr. Salomon Melgen alleges that he made exorbitant profits from the misuse of Lucentis, a costly drug for macular degeneration. The indictment alleges that Dr. Melgen split vials of Lucentis, which are intended for single use, among multiple patients and then falsely billed Medicare as if each application of Lucentis were for a single vial.

Illegal Consulting Kickbacks

Dr. Michael Reinstein of Illinois recently pleaded guilty to receiving illegal kickbacks and benefits totaling nearly $600,000 from two pharmaceutical manufacturers in exchange for regularly prescribing an antipsychotic drug to his patients. He also agreed to pay the United States and the state of Illinois $3.79 million to settle a parallel civil lawsuit. The payment scheme began when Dr. Reinstein agreed to switch his patients to generic clozapine if the manufacturer paid him under a “consulting agreement” and provided other benefits, including all-expenses-paid trips to Miami for the doctor and his wife and various employees.

False Claims

Inaccurate Service Descriptions

Dr. Roman Johnson of New York recently pleaded guilty for his involvement in a scheme to fraudulently bill Medicare for $14.2 million in claims for medically unnecessary treatments, including unnecessary vitamin infusions, physical therapy, and occupational therapy, that were ineligible for reimbursement under Medicare. As part of his plea, Dr. Johnson agreed to pay more than $5 million in restitution.

Phantom Visits

Dr. Albert Ades of New Jersey was recently indicted for healthcare fraud and making false statements. The government alleges that Dr. Ades fraudulently billed insurers for face-to-face physician office visits without ever seeing those patients, as well as writing prescriptions, authorizing refills, and/or performing other tasks. Dr. Ades allegedly altered, and instructed individuals working at his medical practice to alter, patients’ medical charts by inserting fabricated blood pressure readings, among other notations, to make it appear as if patients had visited his office.

Medicare Advantage Gaming

Dr. Isaac Thompson of Florida was recently indicted for submitting fraudulent diagnoses to Humana for Medicare Advantage beneficiaries that resulted in increased Medicare capitation payments to Humana and higher reimbursement for Dr. Thompson’s prospective claims.

Home Health

Four Louisiana physicians were among 20 people charged in a recent 26-count federal conspiracy indictment in New Orleans. The government alleges that a home health agency hired the physicians as “house doctors” who signed off on bogus care plans for patients who did not need home health services. The physicians received the kickbacks in the form of monthly payments for the fraudulent orders.

Dr. Melgen, Again

Federal prosecutors have also accused Dr. Salomon Melgen of orchestrating a Medicare fraud resulting in more than $190 million in losses. The indictment alleges that Dr. Melgen falsified patient files, including false diagnoses and fictitious drawings and diagrams in medical records that misrepresented the condition of the patients. In response to audit inquiries from Medicare, he also allegedly prepared fictitious reports regarding his “abnormal billing practices.”

Supervision

Was There a Doctor Around?

Dr. Keenan Ferrell of Illinois was recently sentenced to 88 months in federal prison for falsely billing Medicare. He represented in claims that he had provided 45-50 minutes of one-on-one psychotherapy to patients living in skilled nursing homes. In fact, unlicensed personnel, including psychology graduate students, with limited or no supervision conducted the sessions.

Where Was I?

An Ohio podiatrist who practiced at a nursing home recently pleaded guilty to Medicare fraud for claiming he provided services in a private office in order to receive higher reimbursement, based upon the site-of-service differential.

Licensure

Dr. Jopindar Harika of Pennsylvania was recently arrested for practicing medicine and writing prescriptions on a suspended license at three mental health facilities. The Attorney General of Pennsylvania is accusing Dr. Harika of unlawful prescribing, delivery of controlled substances, billing the Medicaid program for psychiatric services under a suspended license, and recording illegible psychiatric and medication management notes.

Unfair Competition

Dr. Anthony Moschetto of New York had a falling out with his former boss who then became a competitor. While most physicians would file suit or maybe start a whisper campaign, Dr. Moschetto allegedly conspired with two accomplices to burn his rival’s office. Dr. Moschetto allegedly offered weapons, blank prescription pads, and the promise of cash to coax accomplices into doing his dirty work. However, the plan fizzled out when the fire sprinklers in his rival’s office quickly extinguished the flames.

Next, Dr. Moschetto allegedly offered a hit man $5,000 in cash to put his rival in the hospital for a couple of months and $20,000 to kill him. The second plan also fell apart, not just because the hit man was an undercover officer but because of a concurrent investigation into Dr. Moschetto’s alleged sales of over 400 oxycodone pills in three months. Moschetto was recently arraigned on charges of conspiracy, criminal sale of a prescription for a controlled substance, arson, burglary, criminal possession of a weapon, criminal sale of a firearm, and criminal solicitation.