Compliance Perspective – Healthcare Fraud:
The Compliance Officer should review the facility’s policies and procedures with the Administrator and the Compliance Committee to ensure that vendor contracts, e.g., durable equipment providers, meet the requirements that ensure compliance with laws governing referrals and kickbacks. Also, to prevent double billing in instances where the facility must submit consolidated bills to the Medicare program, the vendor has agreed in writing not to submit bills directly for those residents. Background checks should also be performed to ensure that no vendor has been convicted of a criminal offense related to healthcare. Administrative staff must be trained in the background check procedure and about the required documents to be signed and included in all vendor contracts. The Administrator will request a periodic audit of all vendor contracts to ensure that required documentation is in place and that no vendors have received a criminal conviction or been excluded from Medicare and Medicaid. The Compliance Officer with the Administrator may want to consider holding informational meetings using the Resident and Family Councils to raise awareness about the kind of fraud that they might encounter in their interaction or possible purchases from durable medical equipment providers.
A federal judge recently sentenced three family members to a total of 249 months in federal prison after the trio was convicted in February of healthcare fraud offenses involving a multi-million-dollar durable medical equipment scheme.
Sandra Bailey, 67 of Jackson, TN, was convicted of 16 counts, including conspiracy, health care fraud, and paying illegal kickbacks in connection with health care services. Her husband, Calvin Bailey, 67, was convicted of conspiracy. Their son, Bryan Bailey, 39, of Milan, TN, was convicted of conspiracy and wire fraud. The jury returned guilty verdicts on all 17 counts alleged in the in
dictment.
Over approximately 4 years, the Baileys caused more than $4 million in billing of power wheelchairs and back braces to be paid by taxpayers. During the time the Baileys worked at Jaspan Medical Systems and several other medical supply companies, they received more than $1.2 million in salary and sales commissions.
While employed at one of the companies, the Baileys began to market wheelchairs to patients and represented them as paid fully by Medicare, and at no cost to the patients. To market the equipment, the Baileys used an extensive network of illegally paid recruiters to find eligible patients. After finding the patients, the couple would forge and falsify documents to make it appear that the patients qualified for the equipment. They also enlisted a local physician and nurse practitioner to order the equipment without the required physical examinations to determine if the equipment was medically necessary. Illegal kickbacks were also paid to the medical providers.
Numerous patients—most who could walk, drive vehicles and did not need a power wheelchair—testified that equipment was offered to them at no cost, and that they never saw the doctor or nurse practitioner before the Baileys delivered the back braces and power wheelchairs. To qualify the patients to receive the equipment at no cost, the couple’s son falsified and directed others to falsify patients’ income and expenses to make it appear they were indigent.
