Here’s a roundup of recent fraud cases and settlements announced by the Department of Justice (DOJ).
NY man sentenced for $336M health care fraud
A New York man was sentenced to 12 years in prison and ordered to pay over $336 million in restitution for a years-long fraud scheme in which he and his co-conspirators, including physicians throughout the country, defrauded multiple health insurance companies out of hundreds of millions of dollars.
The DOJ said Mathew James, 54, of East Northport, operated medical billing companies to provide billing services for physicians—primarily plastic or orthopedic surgeons throughout the United States—and used his companies to carry out a massive scheme to defraud insurance companies.
As a third-party medical biller, James submitted claims to insurance companies and, when necessary, requested reconsideration or appeals of denied claims, typically earning a percentage of the amount paid by the insurance companies. The evidence showed that James billed for procedures that were either more serious or entirely different than those his doctor-clients performed. In addition, James made thousands of calls in which he impersonated patients and patients’ relatives to induce insurance companies to reconsider denied claims or pay more on approved claims, resulting in tens of millions of dollars in additional reimbursement to his doctor-clients and from which he received a percentage of the fraudulent proceeds.
James also directed his doctor-clients to schedule elective surgeries through the emergency room so that insurance companies would reimburse at substantially higher rates. When insurance companies denied the inflated claims, James impersonated patients to demand that the insurance companies pay the outstanding balances of tens or hundreds of thousands of dollars.
A federal jury convicted James on July 13, 2022, of health care fraud, conspiracy to commit health care fraud, wire fraud, and aggravated identity theft.
Penn State Health to pay $11M for improper Medicare annual wellness visit billings
The United States Attorney’s Office for the Middle District of Pennsylvania announced that Penn State Health (PSH), a multi-hospital health system, has agreed to pay $11 million to resolve allegations of civil liability for submitting claims to Medicare for Annual Wellness Visit (AWV) services that violated Medicare rules and regulations.
Penn State Health voluntarily disclosed that, between December 2015 and November 2022, PSH submitted claims to Medicare for Annual Wellness Visit services that were not supported by the medical record. After PSH discovered the problems, PSH took prompt corrective action and disclosed the matter to the United States Attorney’s Office.
Pharmacy owner, administrator admit roles in multimillion-dollar fraud and kickback scheme
The co-owner and the administrator of a Union City, N.J., pharmacy has admitted their roles in conspiracies to defraud pharmacy benefit managers and health care benefit providers, including Medicare and Medicaid, of more than $65 million and to pay kickbacks and bribes to health care professionals and their staffs in exchange for referrals of prescriptions.
Samuel “Sam” Khaimov, 52, and his wife, Yana Shtindler, 48, both of Glen Head, N.Y., pleaded guilty in U.S. District Court in Trenton, N.J. Khaimov pleaded guilty to two counts of a superseding indictment charging him with conspiring to commit health care fraud and conspiring to violate the federal anti-kickback statute. Shtindler pleaded guilty to conspiring to commit health care fraud.
“These defendants admitted taking part in an elaborate and years-long scheme to use their specialty pharmacy to rip off Medicare, Medicaid, and private insurers,” U.S. Attorney Philip R. Sellinger said in the announcement. “They paid bribes, kickbacks, set up phony jobs in doctors’ offices. They took reimbursements for medications that never dispensed and falsified records, defrauding insurers via pharmacy benefits managers of more than $65 million. Protecting the integrity of our healthcare system at all levels is a top priority for this office. We will continue to work relentlessly with our enforcement partners to ensure those who commit healthcare fraud or undermine the integrity of medical decision-making through bribes and kickbacks face justice, like the defendants in this case.”