A federal district judge in Miami sentenced the last of five defendants for his role in a healthcare fraud scheme operated out of a physical therapy clinic. According to court records, the defendants recruited and paid off beneficiaries of Blue Cross Blue Shield (BCBS) health insurance plans, then billed BCBS for services the clinic either never provided or which were not medically necessary. The two clinic owners also used the business to fraudulently obtain COVID-19 relief funds.
The two clinic owners were each sentenced to 135 months in prison, three years’ supervised release, and ordered to pay $4,434,069 in restitution. The office manager was sentenced to 35 months in prison, three years’ supervised release, and ordered to pay $357,256 in restitution. One patient recruiter was sentenced to 46 months in prison, three years’ supervised release, and ordered to pay $73,116.61 in restitution, and the other patient recruiter was sentenced to 24 months in prison, three years’ supervised release, and ordered to pay $30,810 in restitution.
According to evidence introduced in court, the billing fraud conspiracy resulted in more than $8 million in false claims being submitted to BCBS. Most of the claims were for unneeded or never-provided physical therapy treatments, such as electrical stimulation, ultrasound therapy, and therapeutic exercise, as well as for durable medical equipment.
Additionally, the evidence showed that in 2021 the clinic owners applied for a $607,585 Paycheck Protection Program (PPP) loan as well as a $500,000 Economic Injury Disaster Loan (EIDL) from the US Small Business Administration (SBA). As a result, they received over $1 million through these COVID-19 relief programs, stealing money that was meant for legitimate small businesses suffering from the devastating effects of the COVID-19 pandemic.
FBI Miami investigated the case, and assistant US attorneys from the Department of Justice prosecuted the case and handled asset forfeiture.
Issue:
Healthcare fraud affects everyone—individuals and businesses alike—and causes tens of billions of dollars in losses each year. It can raise health insurance premiums, expose individuals to unnecessary medical procedures, and increase taxes. Healthcare fraud can be committed by medical providers, company owners, patients, and others who intentionally deceive the healthcare system to receive unlawful benefits or payments. All staff who provide skilled services must understand what constitutes reasonable and necessary skilled services. The skilled services must be based upon a patient’s ability, need, and what is reasonable for the patient. Staff should be knowledgeable and aware of what may be considered a false claim. Failure to promptly report suspected fraud can result in citations, fines, and other sanctions. In addition, staff should be knowledgeable in how to report suspicious billing practices.
Discussion Points:
- Review policies and procedures for preventing and reporting false claims and suspicious billing practices. Update your policies and procedures as needed.
- Train all staff on what can be considered a false claim or kickback. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically perform audits to ensure all staff are aware of their responsibility to identify compliance and ethics concerns and to promptly report violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline. Perform Triple Checks for all Medicare Part A claims prior to submission to ensure that medical necessity is supported by appropriate documentation, and that services meet skilled care requirements.
