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Patient Recruiter Pleads Guilty in Louisiana Health Care Fraud Scheme
On July 15, 2010 a federal grand jury in the Middle District of Louisiana named Fred Belcher, among others, in a five-count indictment. The indictment specifically charged Mr. Belcher with (1) Conspiracy to Commit Health Care Fraud and (2) Conspiracy to Defraud the United States and to Receive and Pay Health Care Kickbacks. On January 31, 2012 Mr. Belcher pled guilty to one count of Conspiracy to Commit Health Care Fraud, effectively dropping one of the conspiracy charges against him in return for his plea.
Mr. Belcher’s plea admitted to the court that he worked as a recruiter for Healthcare 1 LLC, Medical 1 Patient Services LLC, and Lifeline Healthcare Services Inc., Louisiana-based companies that fraudulently billed durable medical equipment (DME) to the Medicare program from 2004 to 2009. He and other recruiters were hired to obtain prescriptions for DME such as leg braces, arm braces, power wheel chairs, and wheel chair accessories. Specifically, Belcher recruited Medicare beneficiaries to attend “health fairs” that he organized at churches and other locations in the beneficiaries’ communities. At these fairs, he obtained information from the beneficiaries and paid a doctor to prescribe medically unnecessary DME for the beneficiaries. Belcher then sold these prescriptions to the three Louisiana companies listed above to bill Medicare.
Unlike traditional criminal cases, defendants involved in criminal activity related to government health care programs (i.e. Medicare, Medicaid, etc.) must be conscious of potential enforcement actions by the Office of Inspector General (OIG) of the U.S. Department of Health & Human Services (HHS) in addition to any criminal consequences. OIG’s mission is to protect the integrity of HHS programs as well as health and welfare beneficiaries. The OIG accomplishes this primarily by conducting audits, investigations, and evaluations. Perhaps most importantly, OIG has the power to exclude persons from participating in or providing services for or on behalf of HHS programs such as Medicare and Medicaid. In essence, to be excluded by the OIG means being black-listed from the medical industry.
Exclusions are a serious and potentially devestating consequence of pleading guilty to criminal activity involving HHS programs. A quick search of OIG’s database on January 31, 2012 shows that Mr. Belcher has yet to be excluded from the Medicare program. This however, does not mean that he won’t eventually be excluded. OIG exclusions tend to happen subsequent to a guilty plea or criminal investigation and in addition to any imprisonment, forfeiture, or fines levied in the criminal case. In many ways, exclusion by the OIG can be worse for the defendant than many criminal consequences because it denies the defendant the ability to earn a livelihood in the only industry the defendant is familiar with.
Therefore, defense counsel should immediately engage in a dialogue with OIG on behalf of a client facing health care fraud charges to dicuss whether a potential exclusion is being considered. Exclusions are regularly for a term of years, thus there would seem to be room to negotiate more favorable terms for one’s client if an exclusion is inevitable. Moreover, defense counsel should be conscious of an individual client’s exposure to exclusion whenever a corporate entity in the medical field is being investigated or enters into a non-prosecution agreement. Even in instances where a particular client is not charged with criminal conduct, OIG may unilaterally move to have that person excluded from the Medicare program depending on the scope of the entity’s admissions about the client. Nonetheless, defendants in such cases must be made aware of the potential for exclusion so that they can make an informed decision about accepting a plea agreement or going to trial.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Massive Healthcare Fraud Takedown: 91 Defendants, $295 Million Scheme
Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced that a nationwide takedown by Medicare Fraud Strike Force operations in eight cities has resulted in charges against 91 defendants, including doctors, nurses, and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $295 million in false billing.
In recent years the government has ramped up enforcement to bring an end to Medicare fraud. The joint DOJ-HHS Fraud Strike Force is comprised of a multi-agency team of federal, state and local investigators. Accordingly, this massive takedown involved the work of approximately 400 law enforcement agents from the FBI, HHS-Office of Insepctor General, and other federal, state and local agencies. In addition to the 91 arrests, the Strike Force also executed 18 search warrants in connection with ongoing investigations. As if this massive takedown wasn’t already enough, the Strike Force arrested an additional 45 defendants the same day in Miami and in the past couple of months has charged 10 defendants in Baton Rouge, 6 defendants in Los Angeles, 18 defendants in Detroit, and 2 defendants in Houston.
This level of coordination is unmatched in other white collar/fraud related crimes. Thus, the government’s stubborn focus on preventing fraud should not be taken lightly by anyone in the healthcare industry. As Assistant Attorney General Breuer said at the press release, “as charged in these indictments, the defendants cover nearly the entire spectrum of healthcare providers, and perpetrated a variety of fraudulent schemes.” Since its inception in 2007, the Strike Force has operations in nine major cities across the nation and has charged more than 1,140 defendants who account for nearly $2.9 billion in false billings.
The best way to avoid being ensnared by a federal investigation is for healthcare providers to maintain aggressive Medicare fraud and abuse compliance programs. These internal corporate policies should, at the very least, be written and cover a wide range of corporate functions susceptible to fraud and abuse. Other critical elements to a successful compliance program include the designation of a compliance officer, conducting effective training and education, developing effective lines of communication, establishing internal enforcement procedures, auditing and monitoring, and maintaining a whistleblower/non-retaliation policy. Preventing all violations may be impossible, but that shouldn’t stop healthcare providers from establishing and faithfully administering an anti-fraud compliance program. With such a program in place, the government will tend to look the other way when technical violations of the law occur. This is a much better, and cheaper, outcome than being charged in a federal indictment.
Since Medicare is a federally funded program most defendants are charged with federal crimes and required to make appearances before a U.S. District Court judge. Indictments in these cases usually include “white collar” charges such as health care fraud, conspiracy to commit health care fraud, receipt of health care kickbacks, and money laundering. In addition, practically all of the defendants are subject to criminal forfeiture proceedings and required to pay restitution if convicted. These charges are very complex, time consuming, and expensive to defend against. Therefore for both compliance and defense purposes, healthcare providers should employ the services of an attorney that has an intimate understanding of the intersection between federal regulatory compliance and federal criminal defense.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
