alex-boyd-260321-copy-300x200Sentencing for four California residents who pleaded guilty to conspiracy to commit health fraud was recently handed down. Geoffrey Ricketts, 49, Marla Ricketts, 38, Samuel Kim, 41, and Sunyup Kim, 40, all pleaded guilty in late 2016 and early 2017 after being indicted in June 2015.

Glucose Meter Fraud Scheme

These individuals created a fraudulent scheme regarding the sale of “talking glucose meters,” which were not medically needed or requested by consumers. They did so through the operation of Care Concepts, LLC and Choice Home Medical Equipment and Supplies (“Care Concepts”). The main corporate business was based out of Louisiana, while Care Concepts had its principal place of business in Chatsworth, California.

daan-stevens-282446-copy-300x191Michael Mirando, 40, previously a resident of Aliso Viejo, CA, was found guilty in May of 2017 on 15 counts of health care fraud. It took a federal jury less than half an hour to reach a verdict following the trial. At the end of October, Mirando was sentenced to eight years in prison and $3 million in restitution. Mirando’s current home in Portland is also being forfeited to the authorities since he admitted it was purchased by the financial proceeds of the fraud.

Medical Facility Owner Submits False Bills

Mirando owned Holter Labs, which offered patients cardiac monitoring services using what was called a Holter monitor. It is an ambulatory electrocardiography device, also known as an EKG device that can be used while a patient walks and performs normal activities. Holter Labs would provide these devices to physicians who then prescribed the devices to patients in order to monitor their heart rates for 24 to 48 hours. Mirando would bill the patients’ insurance companies for the day or two of use of the device. However, at the same time, he would tack on additional services that were not ordered or provided, like 30-day EKG tests, brain scans, and oxygen studies.

how-soon-ngu-34-copy-199x300The Department of Justice (DOJ) for the Eastern District of California announced in October that two individuals pleaded guilty to health care fraud charges. These announcements continue to prove that the DOJ is focused on prosecuting all forms of health care fraud throughout the state and federal levels.

If you have information regarding health care fraud, contact an experienced San Francisco health care fraud lawyer at Brod Law Firm to learn about your rights and options. You may be in the position to file a qui tam lawsuit on behalf of California or the federal government. Call us today at (800) 427-7020.

Fresno Podiatrist Pleads Guilty

hush-naidoo-382152-copy-300x200The California Division of Workers’ Compensation (DWC) announced new suspensions twice in October. It suspended eight medical providers from participating in the state’s workers’ compensation system in early October and then three more shortly after. The total suspensions for 2017 are now up to 49.

These suspensions are part of the DWC’s new policy passed into law in 2016 by Assembly Bill 1244. The new law, which went into effect on January 1, requires the DWC to suspend any medical provider that is convicted of any offense involving abuse or fraud of the federal Medicare program, the state Medi-Cal program, any workers’ compensation system, or a patient. Medical providers can also be suspended for other types of misconduct that led to their license being revoked or surrendered.

The Suspended Medical Providers  

samuel-zeller-360588-copy-200x300In early October, a California federal judge dismissed without prejudice a False Claims Act (FCA) lawsuit against UnitedHealth Group Inc. (UHG). The suit, U.S. ex rel. Swoben v. Secure Horizons, et al., alleged UHG ignored questionable diagnoses that led to higher reimbursements through the Medicare Advantage program. This is significant news for the U.S. Department of Justice (DOJ). The UHG case was the first FCA suit related to the Medicare Advantage program that the DOJ joined. This was essentially a test case to determine the strength of the DOJ’s position and the ability to bring similar cases in the future. Unfortunately, this dismissal signals there were numerous weaknesses in the DOJ’s FCA case.

The Basis for the FCA Claim

This qui tam suit was brought by a whistleblower who alleged UHG knowingly ignored questionable patient charts reviewed by another company, Healthcare Partners LLC. These charts, whether or not they had appropriate evidence, contained diagnoses that would increase the insurer’s risk adjusted payments under the Medicare Advantage program. Under Medicare Advantage, healthcare providers receive higher reimbursements for caring for sicker patients.

andres-de-armas-103880-copy-300x200On Sept. 22, the U.S. Department of Justice announced that drug manufacturer, Aegerion Pharmaceuticals Inc., a subsidiary of Novelion Therapeutics Inc., has agreed to plead guilty to criminal charges and pay a multi-million settlement of to resolve allegations of civil false claims.

The Criminal Charges

The criminal charges against Aegerion state that the manufacturer introduced the prescription drug, Juxtapid, into interstate commerce when it was misbranded under the Federal Food, Drug, and Cosmetic Act (FDCA). Juxtapid was approved by the U.S. Food and Drug Administration (FDA) to treat patients suffering from a rare disorder, homozygous familial hypercholesterolemia (HoFH). This condition prevents the body from removing LDL-C, the “bad” cholesterol, from the blood and causes high levels of LDL-C in the body. The drug carried a black box warning for potential liver toxicity and gastrointestinal side effects.

vladimir-kudinov-71455-copy-300x241There is a misconception that the U.S. Department of Justice (DOJ) is mainly interested in health care fraud and violations of the False Claim Act (FCA) from large corporations like major insurers or pharmaceutical manufacturers. However, this is not true. The DOJ is on a mission to uncover health care fraud at all levels of care, including with individual physicians, local hospitals, regional insurers, and multi-national businesses. This is evidence by two recent DOJ announcements regarding settlements with a family practice chain in South Carolina and a hospital operator in New York.

South Carolina Family Medicine Centers

The Family Medicine Centers of South Carolina LLC (FMC) agreed to pay the U.S. $1.56 million to resolve allegations of FCA violations. FMC is a physician-owned chain of five, previously six, medical practices located in Columbia, South Carolina, and the surrounding area. FMC’s principal owner and chief executive officer Dr. Stephen F. Serbin and FMC’s former laboratory director Victoria Serbin will pay $443,000 to personally resolve allegations of FCA violations.

alex-vasey-225127-copy-300x200In early September, the U.S. Department of Justice announced that Galena (Galena) Biopharma Inc. will pay more than $7.55 million in a False Claims Act (FCA) settlement. The U.S. alleges that Galena paid various types of kickbacks to encourage physicians to prescribe Abstral, which is a fentanyl-based drug, also known as an opioid.

This settlement, along with the DOJ announcement regarding the expansion of opioid awareness training programs on Native American land, demonstrate that the DOJ and other government agencies are continuing to fight the opioid crisis on multiple fronts.

Galena’s FCA Settlement

andres-de-armas-103880-copy-300x200In early September, the U.S. Department of Justice (DOJ) announced pharmaceutical manufacturer Novo Nordisk Inc. has agreed to pay $58.65 million for failing to comply with a Food and Drug Administration (FDA) mandated Risk Evaluation and Mitigation Strategy (REMS) program. The REMS was for Novo Nordisk’s Type II diabetes medication Victoza, which created a risk of a rare form of cancer in humans known as Medullary Thyroid Carcinoma. Novo Nordisk was required to take steps to mitigate this potential risk, including providing information about MTC to physicians. By failing to mitigate the risk as prescribed in the REMS, the FDA determines the drug is misbranded under the law.

Novo Nordisk’s Alleged Misconduct

The DOJ claimed in a complaint that Novo Nordisk violated the Federal Food, Drug, and Cosmetic Act (FDCA) between 2010 and 2014 and violated the False Claims Act (FCA) between 2010 and 2014. According to the complaint, Novo Nordisk sales representatives gave physicians the false or misleading impressions regarding the Victoza REMS was not important. The representatives framed the information in such a way as to make the warning appear irrelevant.

daan-stevens-282446-copy-300x191CHRISTUS St. Vincent Regional Medical Center, located in Santa Fe, New Mexico, and CHRISTUS Health, located in Irving, Texas, have agreed with the U.S. Department of Justice to resolve allegations of violating the federal False Claims Act (FCA) with a settlement of $12.24 million plus interest.

A Qui Tam Suit

The allegations against the CHRISTUS health care companies were made by a former indigent healthcare administrator under the qui tam provision of the FCA. This whistleblower provided information that the two health care companies were making illegal donations to county governments. Between 2001 and 2009, the CHRISTUS companies allegedly made donations in bad faith to various counties, which in turn caused New Mexico to present false claims to the federal government through the Medicaid program.