Articles Posted in Medicare/Medicaid Fraud

You may have heard of an event called a “Botox party”. The basic concept is that a group of people get together and “share” a vial of Botox to address signs of age which may appear on a person’s face. These “events” are paid for individually and do not in any way utilize taxpayer dollars.

Dr. Raymond Brown of Cleveland, Tennessee has now reinvented the “Botox party”. Unfortunately for him, the party will now result in 20 months in prison and the forfeiture of $6 million as reimbursement for fake billing.

Dr. Brown set a record for billing Medicare for the most Botox injections. The doctor billed Medicare for 17,000 vials of Botox in one year. The math didn’t work for a number of reasons. Reason one: Cleveland, Tennessee has about 41,000 residents. The doctor would have had to inject one out of three residents of the entire city to get to this number. Reason two: the doctor would have to see one patient every 15 minutes, 10 hours per day for six days a week and he still would not have used the entirety of the 17,000 vials billed to Medicare. Reason three: when the search warrant was executed, the inspectors determined that the doctor had in fact only purchased 254 vials of Botox.


Just when you think fraudsters can’t reach a new low, you read about Michael Mann, the owner of Seattle-based Wheelchairs Plus. Mr. Mann has been ordered to pay $2.7 million for fraudulently billing the Medicaid program for 119 new wheelchairs. Unfortunately, what Mann delivered were actually used wheelchairs purchased from nursing homes or off of websites such as Craigslist. Mann would actually go so far as creating a new serial number after cobbling together rebuilt chairs from various sources.

Mann applied the serial numbers because Medicaid will not pay for a used or rebuilt chair, but, rather, will only reimburse for a “new” chair. In fact, Medicaid would pay several thousand dollars for a “new chair” when the chairs would only cost a couple of hundred dollars to rebuild used.

The Department of Justice announced a settlement with nearly 500 hospitals related to the implantation of cardioverter defibrillators (ICD’s). The surgeries did not meet the appropriate medical conditions for Medicare coverage established in the National Coverage Determination (NCD). Medicare will generally exclude coverage for ICD procedures when a bypass or angioplasty has been performed within the last 90 days or within 40 days of a heart attack.
Continue reading

In what has to be one of the more bizarre cases of alleged Medicaid fraud, a Florida dentist has been accused of needlessly pulling children’s teeth as part of a Medicaid fraud scheme. The case has not yet been litigated; however, 58 notices of intent to sue by angry patients are known to exist. As an example of the level of anger and frustration, protests were held outside the offices of Dr. Howard Schneider in Jacksonville. A Medicaid fraud investigation has been opened by the Florida Attorney General’s Office.
Continue reading

We had always been of the opinion that the correct saying is “you are what you eat”, however, a recent False Claims Act case seems to infer that a food supply company has changed that old saying to “you are what you bill”.

A federal trial has been set for 2015 against a frozen meal delivery company that is being accused of Medicaid fraud. The complaint alleges nearly $900,000 in improper bills to Medicaid.

The company, Homestyle Direct, is accused of delivering meals to deceased clients, lying to clients about Medicaid requirements and, in some cases, delivering only desserts to the homebound clients and billing Medicaid for a full meal. Medicaid does not reimburse for desserts that don’t meet nutritional requirements.

Just before year-end, GE healthcare agreed to pay $30 million to the United States Department of Justice. The case was filed by a salesman in Michigan. James Wagel alleged that a company owned by GE healthcare marketed a diagnostic drug used in cardiology testing improperly. The drug involved in the case is named Myoview.

The case is very interesting in that GE healthcare acquired Nycomed Amersham. Nycomed, a New Jersey company, allegedly told doctors how to “stretch” the drug. The drug enables doctors to see blood flow in a patient’s heart and helps the doctor detect coronary heart disease. Some doctors were using less than the total amount of the solution during the diagnostic procedure. By using less than the total amount of the solution, the doctors were able to “stretch” the number of procedures completed with the same amount of solution. The doctors then charge Medicare for the procedure.

Unfortunately, the diluted product sometimes resulted in false positives during cardiology testing and exposed the patient to additional and unnecessary testing.

It seems that some companies never learn when it comes to false claims against the United States government. Omnicare is in the business of providing prescription drugs to elderly patients, and, has a particular pedigree in supplying nursing homes. Omnicare operates in at least 16 states, and, has 2 locations in New Jersey.

In 2010 Omnicare paid nearly $100 million to settle a whistleblower and kickback lawsuit. According to a recently filed lawsuit in The Federal Court, Omnicare has developed a new way to overcharge the United States and individual state governments.

A whistleblower, Peter Ordeanu, alleges that while working for the company or its predecessors, he learned that Omnicare regularly inflated the amount of money billed for dispensing drugs. The fraud involved Omnicare changing the National Drug Code number (“NDC” number) on the drug dispensed to the patient. By changing the NDC number the actual name or type of the drug dispensed was masked. The whistleblower claims that by changing the label, the US and state governments were overcharged by millions of dollars.

A number of recent cases have shown that the drug companies are prepared to pay millions and, sometimes, billions of dollars to settle cases involving prescribing drugs for unapproved uses. These “Qui Tam” matters are brought by individuals who have learned information that is not otherwise available to the Federal Government. New Jersey has a similar “Whistleblower Law” technically referred to as the “False Claims Act“.

Of interest in the recent cases with settlements is the fact that there has been no real action taken against the doctors who may be the worst offenders in prescribing the drugs. According to ProPublica, statistics show that 15 drug and medical device companies have paid $6.5 billion since 2008 to settle accusations of either marketing fraud or payment of kickbacks. In the various suits, approximately 75 doctors were named as being involved but none of the doctors were sanctioned in any way.

Drug maker Eli Lilly pleaded guilty to illegally marketing an anti-psychotic drug “Zyprexa”. Eli Lilly paid $1.4 billion in criminal penalties and settlements in the various civil lawsuits. Interestingly, one doctor, psychiatrist George Jerusalem, prescribed more than $1 million a year worth of Zyprexa. Dr. Jerusalem was a consulting psychiatrist to more than 100 nursing homes and was treating between 3,000 and 5,000 residents. Among other allegations, it was alleged that Eli Lilly had paid Dr. Jerusalem in excess of $50,000.00 in “consulting fees”.
Continue reading


Over the past couple of weeks, the Federal Courts have passed on a spate of fraud allegations against hospitals. In the past, New Jersey hospitals have been hit with similar claims and, in fact, some New Jersey hospitals have settled with the Federal Government for these allegations of fraud. The claims allege what amounts to improper or inflated billing practices. The terms of art for inflated billing is “upcoding”. Upcoding is basically where the hospital bills for a procedure which may have been more intricate and provides for a larger reimbursement from the Federal Government. The “upcoding” refers to a different billing “code” that the Federal Government assigns to certain procedures. By submitting a claim for a more difficult or intricate procedure, the hospital is reimbursed a larger amount of money. Although there are variants on this upcoding issue, a qualified fraud attorney can explain the intricacies.

“Upcoding” can occur in hospitals as well as physician’s offices, nursing homes or, for that matter, dental offices and counselors’ offices. The upcoding can come in the form of billing for a more difficult procedure but it can also come in the form of billing for a longer procedure. For example, a false claim was brought against a counselor for billing for one-hour sessions when in fact the sessions were only lasting 45 minutes. After the fraud was reported, the investigators engaged in some simple math. The accumulation of the hours billed by the professional far exceeded that which was possible.

Contact Information