Medicare Anti-Fraud Program Recovers $1.5 Billion in 2005

WASHINGTON–The Health Care Fraud and Abuse Control program
recovered more than $1.5 billion last year, and has recouped $8.8
billion since 1997, according to a report from the HHS Office of
Inspector General.

The program also returned more than $63 million in federal
Medicaid dollars to CMS.

The Health Care Fraud and Abuse Control was established by
Congress in the Health Insurance Portability and Accountability Act
of 1996 to coordinate federal, state and local law enforcement
efforts for health care fraud and abuse.

Last year, the Department of Justice opened 935 new criminal
health care fraud investigations involving 1,597 potential
defendants. Also, more than 1,600 criminal investigations involving
health care fraud were conducted in 2005, with more than 2,600
potential defendants.

During the year, more than 520 defendants were convicted for
health care fraud crimes. The DOJ also opened more than 775 new
civil health care fraud investigations with more than 1,300 civil
cases pending.

Among the DME examples cited in the report:

• Polymedica Corp. and its subsidiaries Liberty Medical Supply
  and Liberty Home Pharmacy Corp. agreed to pay the U.S. $35 million
  to resolve allegations that they submitted improper claims to
  Medicare for various diabetic and nebulizer products. Claims were
  allegedly submitted without a required doctor’s order or
  prescription, and the companies failed to obtain and maintain
  documentation verifying the necessity of the level of treatment
  rendered. The companies also allegedly billed Medicare without
  written authority from a patient to do so. Under terms of the
  settlement, Polymedica agreed to comply with a corporate integrity
  agreement negotiated by HHS/OIG.
• The owner of a California medical supply company pled guilty to
  health care fraud for billing Medicare for power wheelchairs,
  hospital beds and other equipment that was never prescribed by a
  physician, and never received by the beneficiaries. The individual
  was charged with having defrauded Medicare of $2.4 million over
  five years. As part of the plea agreement, the owner agreed to
  forfeit his home, vehicles and bank accounts to pay restitution to
  the government.
• The owner of a medical equipment company in Oklahoma was
  sentenced to serve five months in prison and to pay more than
  $340,000 in restitution after pleading guilty to health care fraud.
  She admitted to forging doctors’ names on phony CMNs. She furnished
  patients with scooters valued at $1,500, but billed the Medicaid
  program for power wheelchairs at $5,000.
• Apria Healthcare Group paid the U.S. $17.6 million to settle
  two civil FCA cases filed by former employees. The settlements
  resolved allegations that from mid-1995 through 1998, Apria
  submitted false documents certifying medical necessity; failed to
  obtain written prescriptions from physicians prior to delivery of
  equipment when required to do so; failed to notify patients of
  their option to purchase DME; and misrepresented the date or place
  equipment was delivered to patients.
• United Healthcare Insurance Co. agreed to pay the U.S. $3.5
  million to settle allegations that the company defrauded the
  Medicare program. As a former DME regional carrier, United
  contracted with CMS to process Medicare DME claims submitted by
  providers, suppliers and beneficiaries in the Northeast. The
  government alleged that United’s telephone response unit knowingly
  mishandled phone inquiries from Medicare beneficiaries and
  providers, and then falsely reported its performance information to
  CMS concerning the company’s handling of those calls.

To view the full report, click here.


Provider News
Supreme Court Won’t Hear Appeal by AHP Debt
Holders
BRENTWOOD, Tenn.–The U.S. Supreme Court has declined to hear an
appeal by American HomePatient’s senior debt holders, ending the
group’s efforts to overturn the company’s bankruptcy reorganization
plan, approved in 2003.

The provider, which operates 263 centers in 34 states, filed for
Chapter 11 in 2002 and fought with creditors over its
reorganization plan, which rejected the warrants issued to the debt
holders before the bankruptcy, the Nashville Business
Journal reported. The warrants, which represented about 20
percent of AHP’s outstanding common stock, would have allowed the
lenders to buy about 3.2 million shares of the company’s common
stock for 1 cent per share.

On July 1, 2003, the company emerged from its 11-month
reorganization with a plan giving it until 2009 to pay $250 million
in debt.

American HomePatient posted revenues of $328.4 million in 2005,
down $7.4 million from the previous year. Earlier this year, the
company, which has struggled with declining Medicare reimbursement
rates, considered a buyout bid from Highland Capital
Management.