RISE summarizes recent regulatory-related headlines.
CEO of diagnostic lab in Louisiana charged in $148M Medicare, Medicaid fraud scheme
A federal grand jury in Baton Rouge, La., last week charged the Louisiana man for his role in a scheme to defraud Medicare and Medicaid of over $148 million in medically unnecessary definitive urine drug testing services.
The Department of Justice said Brad Paul Schaeffer, 48, was a co-owner and chief executive officer of MedComp Sciences LLC (MedComp), a diagnostic laboratory located in Zachary, La.
According to court documents, for nine years beginning in January 2013, Schaeffer allegedly directed staff at the laboratory to bill Medicare and Medicaid for definitive testing of at least 15 substances in urine specimens it received, regardless of the patient’s treatment plan and history, or the request of the referring provider. In addition, Schaeffer, through MedComp, allegedly wrote off patient co-pays, directing MedComp staff to fill out and submit order forms on providers’ “behalf,” concealing the true nature, permissibility, and extent of testing from providers, orchestrating a pass-through billing scheme using hospitals, and paying kickbacks to physicians disguised as laboratory ownership interests. He then allegedly used the fraudulent proceeds for his own benefit, including spending thousands of dollars to renovate a pool and on a pool house in his backyard, and to restore a truck.
Schaeffer is charged with one count of conspiracy to commit health care fraud, five counts of health care fraud, and three counts of engaging in unlawful monetary transactions. If convicted, he faces a maximum penalty of 10 years in prison on each count.
Semi-annual report to Congress: HHS-OIG audits, investigations result in $3.44B in expected recoveries
Billions of dollars in misspent Medicare, Medicaid, and other health and human services funds may be recouped thanks to investigations and audits conducted by Department of Health and Human Services (HHS), Office of Inspector General (OIG) this year, according to a new report.
The Fall 2023 Semiannual Report to Congress (SAR) reveals that work conducted during fiscal year 2023 may result in more than $3.44 billion in expected recoveries. The report finds that over $283 million is expected to be returned based on program audit findings and $3.16 billion is expected to be returned based on investigative work.
Among the other highlights of the report, in FY 2023, HHS-OIG reported:
- 707 criminal enforcement actions against individuals and entities suspected of engaging in crimes targeting HHS programs and the people they serve
- 746 civil actions, which include false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalty settlements, and administrative recoveries related to provider self-disclosure matters
- Excluded 2,112 individuals and entities from participation in federal health care programs.
- Estimated that Medicare improperly paid $1 billion for psychotherapy services and providers received $580 million in improper payments for services that did not comply with Medicare requirements, including $348 million for telehealth services and $232 million for nontelehealth services
- Found CMS didn’t accurately report on its website one or more deficiencies related to health, fire safety, and emergency preparedness for an estimated two-thirds of nursing homes
- Determined that one-third of the 1.5 million Medicaid enrollees with opioid use disorder did not receive medication essential to reducing overdose deaths in 2021 and certain demographic groups (including Black enrollees and those with a disability or blindless) were less likely to receive the medication
Doc sentenced for $1.2M pill mill scheme
A Texas doctor was sentenced last week to seven years in prison for operating a pill mill clinic that unlawfully prescribed over 600,000 opioid pills in exchange for cash.
The Department of Justice said that Dr. Oscar Lightner, 73, and Andres Martinez Jr., 29, both of Laredo, Texas, operated Jomori Health and Wellness, a Houston pain management clinic, as a pill mill.
Lightner was the owner of and a physician at Jomori and unlawfully prescribed dangerous combinations of controlled substances—including of hydrocodone, carisoprodol, and alprazolam—to his patients without a legitimate medical purpose in exchange for cash payments ranging from $250 to $500. Martinez, who is Lightner’s stepson and worked at the clinic as an office manager, coordinated with crew leaders to bring multiple people, including individuals living in homeless shelters, into Jomori to pose as patients to obtain prescriptions for opioids and other controlled substances.
The clinic received over $1.2 million in cash over 14 months through its scheme that resulted in the unlawful distribution and dispensing of over 600,000 opioids and other controlled substances. Both men were convicted on April 11 of unlawfully distributing and dispensing controlled substances and conspiracy. Martinez is scheduled to be sentenced on Dec. 12.