Author: WorkCompAcademy

Dr. Marco Antonio Chavez was sentenced to 21 months in custody and ordered to pay restitution of $783,764.37 for defrauding TRICARE, the health care benefits program for military service members and their dependents.

Chavez was a physician licensed by the State of California who provided psychiatry services, including therapy and prescription medications for children and adults diagnosed with ADHD and depression, for San Diego patients. He is a 2006 graduate of the University of Texas Medical School.

Chavez defrauded TRICARE by using the personal information of these patients to create and submit false and fraudulent claims for nonexistent appointments when he did not actually treat those patients. And he routinely selected the billing code for the highest-level (and highest-reimbursement) patient visit for these fabricated appointments, to maximize the fraudulent reimbursements he received from TRICARE.

Chavez became a network provider for TRICARE in 2013 under contract with United Health Care Military & Veterans, West. That August, Chavez became eligible to submit claims directly to TRICARE through XPressClaim (“XPC”), a web-based system. Chavez used that access to help his scheme to defraud TRICARE, using his unique personal security key code to avoid review by other billing staff. He then caused the payments to be electronically transferred into an account that was in his name, which he controlled.

Chavez tried to deflect attention and avoid detection of his fraudulent billing through a variety of deceptive means. For example, he notified patients that they might see entries on their Explanation of Benefit (“EOB”) forms from TRICARE that they would not recognize. This was an attempt to prevent patients from complaining to TRICARE and drawing attention to the false bills. In reality, Chavez knew that the reason the patients would not recognize the entries on their EOBs was because they had not actually occurred – Chavez had simply made them up.

When the TRICARE contractor conducted an audit and requested certain of Chavez’s patient files, Chavez falsely claimed that he had already sent the files, when he knew those files did not exist and could not have been sent. Chavez also misrepresented that a member of the office staff had stolen his TRICARE checks and deposited them without his permission.

Over the course of his scheme, Chavez submitted approximately $928,800 in false and fraudulent claims to TRICARE via XPC, and was paid $783,764.37 on those claims by TRICARE.

Separately, records of the State of California reflect that Chavez’s medical license was suspended in May 2018, upon the finding of an administrative judge that Chavez had treated patients while under the influence of a narcotic or alcohol.

Longwood Management Corporation and 27 affiliated skilled nursing facilities have agreed to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for rehabilitation therapy services that were not reasonable or necessary, the Department of Justice announced today. Longwood is headquartered in Los Angeles, and the 27 skilled nursing facilities are located in Southern California.

The settlement covers conduct that occurred from May 1, 2008 through August 1, 2012 at six facilities: Alameda Care Center in Burbank, Burbank Rehabilitation Center, Magnolia Gardens Convalescent Hospital in Granada Hills, Montrose Healthcare Center, Sherman Oaks Health & Rehab Center, and West Hills Health & Rehab Center.

The settlement also covers conduct that occurred from January 1, 2006 through October 10, 2014 at 21 facilities: Burlington Convalescent Hospital in the Westlake District of Los Angeles, Chino Valley Rehabilitation Center LLC, Colonial Care Center in Long Beach, Covina Rehabilitation Center, Crenshaw Nursing Home, Green Acres Lodge in Rosemead, Imperial Care Center in Studio City, Imperial Crest Health Care Center in Hawthorne, Laurel Convalescent Hospital in Fontana, Live Oak Rehabilitation Center in San Gabriel, Longwood Manor Convalescent Hospital in the Mid-City District of Los Angeles, Monterey Care Center in Rosemead, Intercommunity Healthcare Center in Norwalk, Park Anaheim Healthcare Center, Pico Rivera Healthcare Center, San Gabriel Convalescent Center, Whittier Pacific Care Center, Studio City Rehabilitation Center, Sunnyview Care Center in the Pico Union District of Los Angeles, View Park Convalescent Center in Baldwin Hills, and Western Convalescent Hospital in the Jefferson Park District of Los Angeles.

Longwood allegedly submitted false and fraudulent claims to Medicare for medically unreasonable and unnecessary Ultra High levels of rehabilitation therapy for Medicare Part A residents. Specifically, Longwood allegedly pressured therapists to increase the amount of therapy provided to patients to meet pre-planned targets for Medicare revenue. These targets were alleged to have been set without regard to patients’ individual therapy needs and could only be achieved by billing for a high percentage of patients at the Ultra High level.

The settlement partially resolves allegations brought in two lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery. The whistleblowers – Judy Boyce, Benjamin Monsod and Keith Pennetti – will collectively receive $3,006,000 of the settlement proceeds.

From the moment news of COVID-19 started spreading, insurance carriers knew there would be a significant business impact. Exactly what the impact would be was not immediately clear, and still leaves some room for guessing.

First, claims saw a sharp decline as the Coronavirus started hitting worldwide. For the most part, this came as no surprise. With fewer cars on the road, fewer accidents result in damage claims. There are fewer ways for people to hurt themselves if they never leave their homes. Workers’ comp claims decline when the workplace is nearly empty. This was an anticipated and completely logical result.

As the world started to come alive after 3 months and “life as normal” began to resume, claims volume started trending back toward normal. This regional trend was steady as municipalities loosened restrictions.

Friss, a Dutch tech company that provides fraud-detection software to 180 insurers, suggests that now a fraud storm is well underway.

The company said in a blog post last week that it has seen a strong uptick in the volume of fraud investigations tracked by its detection software, even though total claims volume is down. In other words, even though there are fewer claims, a higher proportion of them look suspicious.

A graphic that showed a declining volume of claims starting when coronavirus lockdowns began in March and leveling off as lockdowns eased in June. A corresponding line showed the share of claims investigated rising sharply, easing and then rising again. Exact percentages were not revealed.

“We’ve seen this before in economic downturns and other times of hardship, and sadly we predicted this at the onset of the pandemic.”

Inflated COVID-related cleaning charges, fake testing locations and non-existent telemedicine visits are just a few of the emerging fraud schemes the company is seeing. Unethical customers are aware of what they can get away with. They are also adept at coming up with new schemes – quickly. When the opportunity is available, it will be taken advantage of.

The take away from this trend is “that carriers who wish to weather the storm must remain diligent on treating their customers well. Policies must be easy to obtain at a competitive price, and claims handling must become more efficient and customer-centric. Modern carriers must adapt quickly and provide the service their customers demand.”

A judge for the U.S. District Court for the Northern District of California ruled that Amazon.com Inc.’s injury data is not confidential information.

The Center for Investigative Reporting, a journalism nonprofit based in Berkeley, California, filed Freedom of Information Act requests between with the U.S. Occupational Safety and Health Administration, seeking annual data on Amazon’s injuries, illnesses and fatalities at certain warehouses.

OSHA requires employers with more than 10 workers to annually submit data on workplace injuries and illnesses using its Form 300. The log includes the name and title of workers who are injured or contract an occupational illness, along with a description of the injury or illness, and the result of the injury or illness. Employers are required to provide copies of these records to current and former employees and their representatives upon request, and employers must retain the records for five years.

OSHA’s final rule on record keeping also stipulates that an “employer may not require an employee, former employee or designated employee representative to agree to limit the use of the records as a condition for viewing or obtaining copies of records.”

Although OSHA noted in 2016 that public access of this data could encourage employers to abate hazards and prevent injuries and illnesses, in August 2019, OSHA stated that it considered the Form 300 data to be confidential commercial information.

The DOL argued that the Form 300 logs fall under the FOIA exemption that shields from mandatory disclosure any “commercial or financial information obtained from a person.”

Judge Kim, however, disagreed in her 28 page July 6, 2020 Order, holding that Amazon itself had not customarily treated its Form 300 data as confidential, and noted that OSHA regulations require employers, including Amazon, to post such information at its facilities for a three-month period.

Although the DOL also argued that the data could be “misused,” Judge Kim dismissed this argument, noting that employees’ personal and medical information does not appear on the form, and that Amazon’s broad disclosures required under the regulations to all current employees, former employees, and employees’ representatives – with no restrictions on their further disclosures – defeats the DOL’s effort to demonstrate confidentiality.

Kim’s ruling comes just one month after another federal judge in Oakland, California, ruled against the Department of Labor in a similar lawsuit brought by the Center for Investigative Reporting. In that case, U.S. District Judge Donna Ryu ordered the department to release 237,000 workplace injury logs submitted by various employers from Aug. 1, 2017, through Feb. 6, 2018. Like Kim, Ryu also found the companies were already warned the information could be posted on a public website in 2016.

Novartis Pharmaceuticals Corporation has agreed to pay $51.25 million to resolve allegations that it violated the False Claims Act by illegally paying the Medicare co-pays for its own drugs.

When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible. Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.

The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs.

Officials say Novartis coordinated with three co-pay foundations to funnel money through the foundations to patients taking Novartis’ own drugs, As a result, the Novartis’ conduct was not ‘charitable,’ but rather functioned as a kickback scheme that undermined the structure of the Medicare program and illegally subsidized the high costs of Novartis’ drugs at the expense of American taxpayers.

Novartis used The Assistance Fund as a conduit to pay kickbacks to Medicare patients taking Gilenya, a Novartis drug for multiple sclerosis, and used the National Organization for Rare Disorders and Chronic Disease Fund as conduits to pay kickbacks to Medicare patients taking Afinitor, a Novartis drug for renal cell carcinoma and progressive neuroendocrine tumors of pancreatic origin.

In October 2012, Novartis learned from Express Scripts, which then was managing Novartis’ free drug program for Gilenya, that Novartis was providing free Gilenya to 364 patients who would become eligible for Medicare the following year.

Novartis and Express Scripts transitioned these patients to Medicare Part D so that, in the future, Novartis would obtain revenue from Medicare when the patients filled their prescriptions for Gilenya.

Knowing that these patients could not afford co-pays for Gilenya, Novartis developed a plan for it to cover their co-pays through The Assistance Fund, which operated a fund that, ostensibly, offered to cover co-pays for any MS patient who met its financial eligibility criteria, regardless of which MS drug the patient was taking.

Novartis entered into a five-year corporate integrity agreement as part of this settlement. Novartis will be required to implement measures, controls, and monitoring designed to promote independence from any patient assistance programs that it finances. In addition, Novartis agreed to implement risk assessment programs and to obtain compliance-related certifications from company executives and Board members.

To date, the Department of Justice has collected over $900 million from ten pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas, Amgen, Sanofi, and Novartis) that allegedly used third-party foundations as kickback vehicles. The Department also has reached settlements with four foundations (Patient Access Network Foundation, Chronic Disease Fund, The Assistance Fund, and Patient Services, Inc.) that allegedly conspired or coordinated with these pharmaceutical companies.