Articles Posted in Medicaid and Medicare Fraud

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Recent news provides another example of the effort of medical providers, such as nursing homes, to defraud the government through healthcare fraud. The agencies are Adonis Inc. and BestMed-Care Services Ltd., headquartered in Dolton, Illinois. The operator of two nursing home agencies in Illinois was arrested and charged with healthcare fraud. The allegations specified that he stole over $5 million “for unnecessary home care services” for nearly four years. The charge carries a maximum penalty of 10 years behind bars and a fine of the greater of $250,000 or twice the amount of the fraud.

The charges stem from the agencies paying a marketing company to refer patients to them for ostensibly “free services” only to tell the patients they needed certain care from skilled nurses, and then billing Medicare for providing that unnecessary care. This also included filing falsified nursing assessments for these patients. This most recent case again puts the spotlight on the importance of Medicare and Medicaid Fraud Units. In this case, the Medicare Fraud Strike Force’s investigation led to this arrest. It also highlights the importance of our laws in combating Medicare and Medicaid fraud to protect the system and patients:

False Claims Act
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The False Claims Act is a law that allows for the government to sue those who have allegedly defrauded the federal government. These lawsuits can also be filed by individual citizens who believe they have uncovered evidence of fraud against the federal government, and the United States Department of Justice has the option to get involved and prosecute the matter.

Medicare & Medicaid Fraud in Nursing Homes

In the healthcare industry, there are often many examples of fraud in the context of Medicare and Medicaid. Medicare and Medicaid are of course programs administered by both federal and state governments, largely with federal dollars. In exchange for accepting money for either program, states and healthcare providers must follow certain rules and regulations as to how they conduct themselves and do business. If all goes well, those providers can then submit for reimbursement from Medicare and Medicaid. However, many providers unfortunately will overbill these programs in order to get back more money, which is pure and simple a fraud perpetrated on the government. Many states have their own versions of the False Claims Act, and can also be the target of fraudulent activity.
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Earlier this week we shared information about programs which train seniors to identify questionable items on medical bills in the hopes of rooting out errors and fraud. As mentioned, even individual mistakes on simple items–like accidentally billing for double medication–can add up over the long-term. It is important to constantly improve billing efficiency to ensure all public money is well spent.

But even more invidious are those cases where there are systematic problems in billing. Nursing homes are frequently the site of these Medicare and Medicaid fraud schemes. When left unchecked, hundreds of millions of dollars or more can be filtered to service providers for services that were not performed adequately or at all. It is vital that those with information about these schemes–including seniors, nursing home care workers, and others–to come forward, speak with an attorney, and ensure the fraud is stopped.

Nursing Home Bill Inflation Case

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Senior citizens are uniquely familiar with the large healthcare programs Medicare and Medicaid. Medicare in particular is available only for seniors. Alternatively, Medicaid is based on financial need–one must have assets below a set figure to qualify. Medicaid is critical for many seniors, as it pays for permanent long-term care at nursing homes, whereas Medicare does not pay for extended stays. Any way you look at it, however, these programs are critical to the health and well-being of seniors in Illinois and throughout the country.

That is why the elderly–and their family members–have a huge stake in the financial stability of the programs. Lawmakers are constantly discussing possible changes, mostly spurred by concerns about budgets. One easy way to help the budget problems is to root out fraud and ensure that all funds spent on the programs are effective and useful. Unfortunately, billions of dollars allegedly are lost each and every year as a result of mistakes and outright fraud. The losses accrue when the programs are billed for services that are not provided, unnecessary, or provided inadequately.

Training Seniors to Spot Problems

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There is often a close relationship between hospitals and certain nursing homes. Seniors who live in nursing homes usually have various medical issues which may require hospital care on a frequent basis. In fact, some of the most common forms of nursing home neglect is when caregivers fail to call an ambulance to rush a resident to a hospital to receive emergency care. It is critical to remember that nursing homes, while providing some skilled care, are not hospitals. These facilities are limited in what care they can provide, and it is incumbent upon caregivers at these homes to know when it is necessary to transport a resident to a hospital.

But therein opens another problem. Because nursing homes are such a large referrer of patients to hospitals–and both may be for-profit facilities–there is a risk of fraudulent relationships developing. That may include situations where residents are referred to certain facilities at certain times in order to boost the bottom line of both operations. In the worst cases, administrators may actually provide kickbacks to nursing homes for referring residents to one hospital over another.

Illinois Example

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As nursing home resident advocates often point out, there is an inherent conflict between proper operation of these facilities and financial incentives for owners. Running the long-term care home to maximize quality for residents requires ensuring full staffing, adequate equipment, full supply shelves, high quality food, safe upkeep of the structure, and more. Yet, all of those demands cost money. This means that private operators may be tempted to skimp, increasing their own revenues while sacrificing patient care.

At other times, perverse financial incentives may affect outside agreements that nursing home operators make with fellow, ancillary caregivers. For example, the Chicago Tribune reported last week on a settlement in a local kickback case between nursing home operators and a large pharmaceutical company. It is another example of how lining the pockets of owners was prioritized over the best interests of the nursing home residents.

Omnicare Settlement

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With the crossing into March, the official deadline for the “sequester” cuts took effect. That means that over the rest of the year a series of automatically spending cuts will hit many different areas of the federal government, ultimately totalling $85 billion this year alone. When discussing health care issues specifically, Medicare faces some smaller reductions but Medicaid is mostly untouched by the sequester. However, that can be somewhat misleading, because steep financial cuts to both program remain on the table for any compromise that might be reached in the coming months between the parties.

For that reason it remains critical for all of us to be vigilant about how funds are spent for these programs. Both Medicare and Medicaid funds are spent in different ways on nursing home care, but Medicaid constitutes the bulk of support for seniors (and others with various disabilities) who need long-term care.

Our attorneys continue to encourage all those with knowledge of fraudulent Medicaid claims to come forward and speak with a legal professional to learn how the law allows citizens to hold those committing these acts accountable.

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When poor (or unnecessary) care is provided to seniors at long-term care facilities, it is not just senior and their loved ones who suffer. The truth is that all taxpayers are taken advantage of in those situations. The vast majority of elder care is paid for via Medicare and Medicaid funds. That means that all of us actually contribute to the payment for long-term care. When that care is substandard–or we are paying for services that aren’t actually needed–then all of us have a personal stake.

Considering that public budgets are stretched to the max, and significant cost cutting is always on the table, it is absolutely critical that unlawful billing of Medicare and Medicaid funds be addressed. That is exactly what federal officials intended when they passed the False Claims Act. The law includes qui tam provisions–also known as “whistleblower” provisions. Essentially, this means that there are incentives for those with knowledge of misspent funds at these facilities to come forward. The individuals who provide information ultimately receive a portion of the recovery of misspent funds via either a settlement or successful lawsuit.

$700,000 Example

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The Wall Street Journal recently published an article that shed light on a widespread problem that plagues the care given to nursing home residents everywhere: corrupt deals between nursing home administrators and drug companies.

The article focuses on Joel Gemunder, the former CEO of Omnicare, the largest distributor of pharmaceuticals to nursing homes. Mr. Gemunder officially announced his retirement last week, taking almost $130 million in pension benefits on his way out. The amount is a staggering sum of money for a single individual, especially considering that the stock value of the company he is leaving dropped over 60% in his final years running the enterprise.

The mammoth pension amount is consistent with how Omnicare has prioritized values: cash over quality–profits over care. Over the course of its history, the company has even shown a willingness to break the law in order to make as much money as possible. A recent Chicago example has made headlines.

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For many years, the Medicare Payment Advisory Commission has reported that the Medicare program overpays skilled nursing facilities (SNFs) for rehabilitation services and underpays SNFs for certain residents needing specialized services and skilled nursing care. Significant changes will be made to Medicare payment policy and rein in wasteful spending and overpayments. Many times SNFs are paid for services they do not provide. Additionally, the programs were supposed to be budget neutral, but SNFs placed more residents in the highest assessment categories which resulted in overpayments. To read more about the overpayment, please visit the center for Medicare advocacy’s website.