Anchorage Doctor Sentenced to 3 ½ years for Fraudulently Billing Medicaid and Tampering with Physical Evidence

State of Alaska Press Release here

The Alaska Department of Law, Medicaid Fraud Control Unit, announced today that 40-year-old Dr. Shubhranjan Ghosh was sentenced to 3 ½ years of active incarceration. Dr. Ghosh pled guilty to Medical Assistance Fraud and Tampering With Physical Evidence, which he committed between 2010 and 2013 at his practice, Ghosh Psychiatric Services.

Judge Philip Volland also ordered Dr. Ghosh to repay $605,000 in restitution to Medicaid. After release, Dr. Ghosh will be on probation for 10 years, and there will be 3 ½ years jail time that the Court could impose if he violates probation. Dr. Ghosh was remanded to custody at sentencing today. The Medical Board will decide the future of Dr. Ghosh’s medical license.

In court papers, Assistant Attorney General Jonas Walker argued that Dr. Ghosh “is a con artist who happens to hold a medical license.” The State presented evidence at sentencing, including a video showing Dr. Ghosh urging an employee to sign false affidavits stating that medical services were provided when, in fact, they were not.

Judge Volland remarked the community should be “shocked” by Dr. Ghosh’s “unconscionable and unacceptable” crimes of “poaching” money from a program designed to provide medical care to a particularly vulnerable population.

The case was initiated by citizen complaint and jointly investigated by the Alaska Department of Law, Alaska State Troopers, Anchorage Police Department, Alaska Department of Health and Social Services, the U.S. Department of Health and Human Services, Office of Inspector General, Federal Bureau of Investigation, Immigration and Customs Enforcement Homeland Security Investigations. Mr. Walker emphasized that this case is a great example of how state and federal collaboration can work to combat fraud and abuse in the Medicaid system.

The Alaska MFCU is part of the Attorney General’s Office. The MFCU is responsible for investigating and prosecuting Medicaid fraud and abuse, neglect or financial exploitations of patients in any facility that accepts Medicaid funds.

The information filed in the Ghosh complaint can be found on the MFCU website.

Timberlawn mental hospital cut off from federal funding over safety issues

From a much long report in the Dallas News

Federal regulators are taking the rare step of kicking one of North Texas’ largest psychiatric hospitals out of the Medicare and Medicaid programs for leaving patients in “immediate jeopardy” of injury or death.

[...]

Timberlawn flunked a make-or-break inspection, a final chance to prove it could fix an array of problems after promising improvements for months.

The U.S. Centers for Medicare & Medicaid Services found that unlicensed personnel were monitoring patients and some patients were going more than 12 hours without seeing a nurse. Electrical cords and other unsafe objects remained in rooms within reach of suicidal patients.

“These practices posed an immediate jeopardy to the health and safety of patients,” inspectors said in a report.

The state said it is moving quickly to evaluate its enforcement options.

“The issues have been egregious and incredibly disheartening. We are absolutely looking at the full range of penalties, including license revocation,” said Carrie Williams, a spokeswoman for the Texas Department of State Health Services. “Our inspectors have been in and out of the facility since February, citing issues and not seeing progress. It’s turned into a critical situation.”

Much more information at the link, which includes hand wringing over what they will do when a dangerous and unsafe facility is shut down.

Poor treatment at Lehigh Valley mental health clinics was evident, patients say

From a longer report in the Lehigh Valley Live website

Photo caption:Lehigh Valley Community Mental Health Centers Inc. at 226 Northampton St., Easton, is seen July 20, 2015. It is one of 10 mental health clinics sued July 20, 2015, by the U.S. Attorney's Office for the Eastern District of Pennsylvania, along with owner Melissa Chlebowski and Melchor Martinez. Martinez is alleged to have run the Medicare- and Medicaid-funded clinics in Easton, Bethlehem, Allentown, Philadelphia and Raleigh, North Carolina, despite a 2000 ruling excluding him from participating in these and any federally funded health care programs.

Director Allison E. Frantz said the department received complaints about the delivery of care at Lehigh Valley Community Mental Health Centers Inc., now the target of a federal whistleblower lawsuit. The department forwarded the complaints, prompting an investigation, she said.

"The Northampton County DHS has taken steps to ensure the county's citizens' behavioral health treatment would not be jeopardized: the provider network was enhanced to include additional bi-cultural, bilingual treatment professionals and regular and frequent on-site clinical reviews, including additional billing audits," Frantz wrote in an email Tuesday.

After the U.S. Attorney's Office for the Eastern District of Pennsylvania announced the lawsuit Monday, patients were left with myriad questions about the care they had received and whether the five local centers in Easton, Bethlehem and Allentown would remain open.

The suit also targets the centers' owner, Melissa Chlebowski, and her husband, Melchor Martinez, both of Allentown, as well as four sister mental health centers in Philadelphia and one in North Carolina.

[...]

The suit alleges the mental health clinics used unqualified stand-ins for psychiatrists and rushed patients through "medication management" visits. Federal prosecutors also say the centers were really run by Martinez, despite being prohibited since 2000 from participating in Medicaid, Medicare or any federally funded health care programs.

The civil action seeks damages and penalties.

[...]

N.J. medical bribe scheme reached grand scale

Selections from the extensive report on NewJersey.com

The first hint of the vast bribery scheme came with the arrests of a North Jersey doctor and three businessmen who, authorities said, found a way to turn a diagnostic lab with offices in Parsippany and Garfield into a virtual gold mine.

Two years later, federal prosecutors in Newark have racked up convictions of 38 people, including 25 doctors from New Jersey, New York and Connecticut, in what is believed to be one of the largest — if not the largest — laboratory bribery prosecutions in the United States, both in terms of money and the number of physicians caught with their hands out.

“To our knowledge, this is the largest number of medical professionals ever prosecuted in the same case,” U.S. Attorney Paul J. Fishman said last week.

“It shows how pervasive this practice can be. It has also made people in the profession sit up and take notice and made the deterrent message that much louder,” he said.

In recent weeks two doctors, one weeping and both remorseful, have been sentenced after helping prosecutors catch others in cases that add to the broadening panorama of corruption.

By the numbers

• 25 doctors and one physician’s assistant pleaded guilty to accepting bribes.
• 16 of the doctors live in New Jersey; seven in New York; and two in Connecticut. The physician’s assistant is also from New Jersey.
• 12 other defendants who worked at Biodiagnostic Laboratory Services have pleaded guilty.
• The amount of bribes pocketed by individual doctors ranged from $10,500 to $1.8 million.
• In return for bribes, the doctors referred over $100 million in blood tests to the lab.
• So far, 12 doctors have been sentenced to terms ranging from one year of probation, for a cooperator, to more than three years in federal prison and fines of up to $75,000.

The government is seeking a combined forfeiture of more than $87 million from the 38 defendants, including $50 million from former BLS owner and president David Nicoll and $25 million from his brother, Scott Nicoll.

And it’s not over. Additional arrests of doctors who profited from the scheme are anticipated, prosecutors say.

Here is the section we are interested in from this extensive report on this large and complex scheme

A psychiatrist from Fort Lee, who practiced in Paterson, and a doctor from Ramsey are among 12 physicians who have already been sentenced. The psychiatrist, Claudio Dicovsky, admitted accepting $220,000 from BLS, but put a halt to the payments long before the feds came knocking. In January, he was placed on probation for three years, including one year of house arrest with electronic monitoring, and ordered to perform 1,500 hours of community service.

GAO Finds Major Overuse of Antipsychotic Drugs by the Elderly

From the Illinois Nursing Home Abuse Blog

In late 2014 we blogged about the accusations levied against Dr. Michael J. Reinstein about his improper use of antipsychotic drugs prescribed to patients in abundance, as well as taking kickbacks from the drug maker to prescribe it, and making 140,000 or more false billing claims submitted to Medicare and Medicaid for those treatments. This activity landed him in both civil and criminal hot water, and in more recent news he pled guilty to criminal charges as well as settled civil claims with the Illinois and federal governments.

The companies accused of providing those kickbacks and receiving Medicare and Medicaid dollars from the business Reinstein generated by prescribing their antipsychotic drugs. Reinstein exemplifies a holdover of a slowly diminishing practice of using antipsychotic medications, which now is viewed more as the easy way out and a method of chemical restraint when there are other methods that could more humanely calm and care for a patient, particularly dementia and Alzheimer’s patients who have historically been the recipients of antipsychotic medications. Nursing homes historically used these especially when they kept low staffing levels and did not have the manpower to aid patients. Yet antipsychotic drugs can create a cycle of drug dependency, and can even lead to death.

Changing Tides?

While the movement to eliminate the use of antipsychotic medications has gained steam in recent years, the federal government reports that elderly Americans have been overusing psychiatric drugs such as clozapine (Dr. Reinstein’s apparent drug of choice), Abilify, and others. Such drugs are meant to calm down and sedate patients that are prone to violence or outbursts, which those suffering from dementia or psychosis may be particularly prone to exhibiting. The Government Accountability Office (GAO) has released a report stating that elderly adults who live outside of nursing homes and long-term care facilities overuse antipsychotic drugs which are prescribed to them by doctors, though residents in nursing homes also fell into such dependency and overuse, and efforts to curb over-prescription and overuse must continue there as well.

Notably, according to the report, about 86% of Medicare enrollees who suffer from dementia and live outside of nursing homes are prescribed antipsychotic medications, which is a staggering statistic. It is even more remarkable when considering that only approximately 6% of total Medicare enrollees living outside of nursing homes suffer from dementia. Thus the choice of treatment has predominantly been geared toward chemical intervention. For those in nursing homes, of the elderly dementia patients living in nursing homes for over 100 days in the year 2012, approximately a third of those patients were prescribed antipsychotic drugs (and 14% of those outside of nursing homes during 2012).

Part of the problem, according to the GAO report, is the lack of oversight by the government. Medicare and Medicaid specifically take responsibility for such oversight on behalf of the federal government, and states typically have Medicaid fraud units that look into not only financial fraud related to health care, but also investigate when issues include abuse or misuse of medications (which can result in unnecessary and excessive, and thus fraudulent, payments to providers and pharmaceuticals with federal dollars). Those agencies and offices, as well as the U.S. Department of Health and Human Services as the report notes, should be vital in promoting awareness of the dangers of antipsychotic drugs and reducing that use far more than the government has in the past.

Psychiatrist Settles Pleads Guilty and Settles Civil Claims

As seen on the Illinois Nursing Home Abuse Blog

Background

A few months ago, an Illinois psychiatrist was suspended indefinitely from practicing because of his alleged abuse of an antipsychotic drug called clozapine. Dr. Michael J. Reinstein prescribed clozapine to more than half of his patients at nursing homes as well as mental health facilities. Clozapine is used to keep patients sedated when they become irritable or violent – many of them suffer from dementia or other ailments, and antipsychotic drugs such as clozapine are used to hold them down. Such drugs can be considered an unacceptable form of chemical restraint that advocates have fought against in recent years in favor of more humane methods that avoid drug dependency.

Constant drug use by patients as prescribed can put them in a stupor and can hasten their mental and/or physical demise. Clozapine adversely affects the immune system by diminishing white blood cells, and can cause heart inflammation, seizures, and problems with the blood, as well as dizziness and lightheadedness. As we profiled earlier in this space, clozapine itself is one of the most dangerous types of antipsychotic medications, and is considered “a risky drug of last resort.” Historically, Dr. Reinstein was alleged to have prescribed more clozapine in a single year (2007) than all medical providers in the large state of Texas combined, and has had patients die in the past while on substantial doses of clozapine.

Charges, Guilty Plea and Settlement

Reinstein was also accused of taking about $350,000 in kickbacks, including gifts (like travel and dinners) from a clozapine manufacturer, Teva Pharmaceuticals, which is against the law. Teva already settled with the government over those kickback allegations. The government also sued Reinstein for taking kickbacks to prescribe clozapine, and for submitting possibly more than 140,000 false claims (overbilling) for reimbursement for these treatments from the federally funded programs Medicare and Medicaid. This type of Medicare/Medicaid fraud is prosecuted civilly and criminally under the False Claims Act, and such allegations are very serious. In recent news, Reinstein, already dealing with a suspended license and a civil suit from the government for taking kickbacks and committing medication fraud, has been charged criminally by the United States for taking kickbacks from the clozapine drug maker.

As reported by the Chicago Tribune, the criminal charges have been brought on a single kickback worth $2,000, but the government was reportedly looking to take back approximately $600,000 worth of “ill-gotten gains stemming from clozapine prescriptions.” Just days ago, Reinstein pled guilty to the federal charge of accepting kickbacks for prescribing clozapine against the Medicare and Medicaid Anti-Kickback Statute. His sentencing date is as yet unscheduled, but the please agreement includes a recommendation of 18.5 months behind bars. Along with the guilty plea, Reisnstein settled the civil case with both the Justice Department and the State of Illinois (which later joined the federal government in that suit) for $3.79 million, settling claims that he accepted kickbacks to prescribe clozapine and then submitted an astounding amount of false claims for reimbursement.

Takeaway

This case demonstrates the importance of cracking down on Medicare and Medicaid fraud, as well as companies and medical providers engaging in kickback schemes. This is an illegal way to “get rich” at the expense of patients who are not prescribed what they need or do not receive the appropriate treatment because doctors are prescribing medications as part of the kickback scheme. This case also highlights the abuse of federal taxpayer dollars through reimbursement claims. And above all, it puts the spotlight on the abuse of medications for chemical restraints, and how we must continue moving toward alternative methods.

Jurors to decide fate of South Florida psychiatrist, others in Medicare fraud trial

Highlights from an extended report in the Miami Herald

Barry Kaplowitz was a psychiatrist with a “robotic” signature who signed off on thousands of bogus treatments at a Hollywood psychiatric facility that bilked Medicare for millions — even when he was out of the country, prosecutors say.

“It’s not just any kind of signing; it’s robo-signing,” Justice Department prosecutor Andrew Warren declared during closing arguments at his Miami federal trial.

[...]

On Tuesday, Miami federal jurors resumed deliberating the fate of Kaplowitz, 54, an Aventura psychiatrist who worked part-time as the medical director of Hollywood Pavilion’s outpatient facility, and two other defendants on charges of conspiring to defraud Medicare and related offenses.

[...]

The other defendants are Melvin Hunter, 63, a Broward resident who worked as an admissions supervisor for Hollywood Pavilion’s inpatient facility, and Tiffany Foster, 49, an Alabama resident accused of taking bribes to refer mental health patients.

A fourth defendant, Christopher Gabel, 62, of Davie, the former chief operating officer, pleaded guilty in November to conspiring to commit healthcare fraud and pay kickbacks to patient recruiters. Gabel, who is serving a six-year prison term, testified that Medicare beneficiaries — including drug addicts with disability status — were admitted regardless of whether they qualified for treatment or even saw a doctor.

The latest trial followed the 2013 conviction of Hollywood Pavilion's chief executive officer, Karen Kallen-Zury, of Lighthouse Point, who was found guilty along with three other employees of conspiring to bilk $67 million from Medicare by filing phony claims for mental health services from 2003 to 2012. Medicare was tricked into paying $40 million to Hollywood Pavilion. Of those defendants, Kallen-Zury received the longest sentence: 25 years.

During the six-week trial, prosecutors presented evidence showing that Kaplowitz generated $6.5 million in false claims for Medicare patients who did not need psychiatric treatment, resulting in $3 million in tainted income for Hollywood Pavilion between 2008 and 2011. The psychiatrist was paid $1,250 a month over that period for showing up one day a week to sign charts and other paperwork to justify 2,800 false claims to Medicare, prosecutors said.

[...]

The prosecution of Kaplowitz, Hunter and Foster was the latest crackdown by the Justice Department and U.S. attorney's office against operators of mental-health facilities accused of fleecing the Medicare program.

Three previous major prosecutions led to the convictions of about 100 clinic operators, doctors, therapists and patient recruiters at American Therapeutic, Biscayne Milieu and Health Care Solutions Network in South Florida.

Several of those convicted defendants testified at the latest trial. Among them: Dr. Alan Gumer, a former medical director at the Hollywood Pavilion facility who is serving a 21/2-year sentence in the American Therapeutic case, and Keith Humes, a Hollywood Pavilion patient recruiter who is serving a seven-year prison sentence stemming from another Medicare fraud offense.

Chicago psychiatrist pleads guilty to taking drug kickbacks

As reported by ABC channel 7 in Chicago

A long-time Chicago psychiatrist pleaded guilty Friday to receiving illegal kickbacks and benefits totaling nearly $600,000 from pharmaceutical companies in exchange for prescribing an anti-psychotic drug to his patients.

Dr. Michael J. Reinstein, 71, of Skokie, has also agreed to pay $3.79 million to settle a civil lawsuit alleging that he caused the submission of at least 140,000 false Medicare and Medicaid claims for the thousands of patients he prescribed Clozapine to in nursing homes and other facilities in exchange for kickbacks.

"The defendant put his patients at great risk of serious health problems to benefit his personal interests at taxpayer expense," said Attorney General Lisa Madigan, whose office handled the civil litigation.

Reinstein's plea agreement calls for the government to recommend a sentence of 18.5 months in prison when he is sentenced.

The U.S. Attorney for the Northern District of Illinois filed a single felony charge against Dr. Michael Reinstein, a Chicago psychiatrist took kickbacks for prescribing an antipsychotic drug

As reported on ProPublica

Be sure to the original for many extar links related to the story

A former Chicago psychiatrist who was the nation's top prescriber of the most powerful and riskiest antipsychotic drug intends to plead guilty to a federal felony charge of taking kickbacks from its manufacturer in exchange for prescriptions, court records show.

The U.S. Attorney for the Northern District of Illinois filed a single felony charge against Dr. Michael Reinstein this week for taking $2,000 in November 2009 from drugmaker Teva "in return for Reinstein's referrals of patients" for clozapine prescriptions.

Clozapine, also known as Clozaril and FazaClo, is approved to treat schizophrenia patients who don't respond to other medications. But it can have dangerous side effects, including seizures, inflammation of the heart muscle, and a drop in white blood cells. The drug is considered particularly risky for elderly patients.

A note in court records says that Reinstein intends to plead guilty at his arraignment next Friday. The action was first reported by the Chicago Tribune.

Reinstein's prescribing patterns have been detailed in two ProPublica reports.

In 2009, ProPublica and the Chicago Tribune reported how in one year Reinstein prescribed more of the antipsychotic clozapine to patients in Medicaid's Illinois program than all doctors in the Medicaid programs of Texas, Florida and North Carolina combined. Autopsy and court records showed that at least three patients under Reinstein's care had died of clozapine intoxication. At that time, Reinstein defended his prescription record, arguing that clozapine is effective and underprescribed.

Then, in 2013, as part of a ProPublica investigation into Medicare's failure to monitor problem prescribers, we reported that Reinstein prescribed even more clozapine in Medicare's prescription drug program for seniors and the disabled. Medicare continued to let him prescribe in the program even after the U.S. Department of Justice accused him of fraud and Illinois' Medicaid program suspended payments to him.

The U.S. Attorney's office declined to discuss Reinstein's upcoming plea. Reinstein's attorney, Terence Campbell, did not immediately return a phone call from ProPublica seeking comment. He told the Tribune on Thursday that Reinstein was "working toward resolving the issues raised by the government and hopes to put this episode behind him soon."

The Tribune reached Reinstein, as well, yesterday. He would not discuss the criminal case but denied any payments from Teva, clozapine's manufacturer, were for prescribing the drug. The doctor instead said the money was for lectures he gave.

In November 2012, the federal government filed a civil fraud lawsuit against Reinstein, saying he "received illegal kickbacks from pharmaceutical companies and submitted at least 140,000 false claims to Medicare and Medicaid for antipsychotic medications he prescribed for thousands of mentally ill patients in area nursing homes."

Last August, Illinois medical regulators indefinitely suspended Reinstein's medical license after determining that Reinstein received " illegal direct and indirect remuneration" from the maker of generic clozapine, did not consider alternative treatments for his patients, and disregarded patients' well-being. In response to the medical board's accusations, Reinstein's lawyers invoked his right against self-incrimination.

Early last year, Teva Pharmaceutical Industries Ltd., the maker of generic clozapine, agreed to pay more than $27.6 million to settle state and federal allegations that it induced Reinstein to prescribe the drug.

Reinstein's prescribing of clozapine appears to have declined after our 2009 articles about him. From 2007 to 2009, he wrote an average of 20,000 Medicare prescriptions annually for clozapine and the brand-name version, FazaClo. That figure dropped to about 8,000 in 2012, according to data obtained by ProPublica.

Psychiatrist Dr. Andrew Newton charged with healthcare fraud

As reported in the Shippensburg News Chronicle on Decenmber 5th, 2014

The United States Attorney for the Middle District of Pennsylvania, announced today that charges have been filed against Andrew Newton, a resident of Harrisburg.

According to United States Attorney, Peter Smith, Dr. Andrew Newton, 42, a psychiatrist with an office in Mount Carmel is charged in a six-count information with false billings for psychotherapy services. Specifically, it is alleged that between August 2010, and November 2011, Newton billed Medicare for face-to-face therapy sessions when he was in fact out of the country.

Mental Health Ranks High on Fraud Scale

A recent column by Richard Kusserow

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Kusserow’s Corner: Mental Health Ranks High on Fraud Scale

Occasionally, I take time to bring attention to enforcement actions in various health care sectors. Some recent actions drew my attention back to a special enforcement problem that stretches back decades to my days as Inspector General—mental health. Billions of dollars are spent to address the ever-increasing demand to treat mental stress and illness. The primary purpose of mental health treatment must be the therapeutic care and treatment of individuals who are suffering emotional disturbance. Proper treatment therefore demands the highest level of trustworthiness and integrity in the practitioner, who treats some of the most vulnerable patients. Two sources of funding are Medicaid and state general fund dollars, which on average fund 90 percent of the system. However, about 10 percent is funded by Medicare, federal mental health services block grant funds, and county or municipal funds. As with other areas of health care, a significant portion of these funds are diverted to fraud within the mental health industry. Many health care fraud investigators believe mental health caregivers, such as psychiatrists and psychologists, have the worst fraud record of all medical disciplines. Much of that is attributable to prescriptions for narcotic drugs and taking advantage of some of the vulnerable individuals who suffer from mental illness or Alzheimer’s disease.

Last year the HHS Office of Inspector General (OIG) issued a report focusing on one aspect of the problem: detecting and deferring mental health fraud in community mental health centers (CMHCs). CMHCs provide partial hospitalization program services to approximately 25,000 Medicare beneficiaries. The OIG report cited numerous arrests by Medicare Fraud Strike Forces evidencing significant levels of CMHC fraud. The OIG review found that one of nine MACs reviewed performed activities to detect and deter CMHC fraud, and most of these were part of a CMS-led special project. Activities to detect and deter CMHC fraud varied substantially among ZPICs with many performing minimal activities to detect and deter fraudulent CMHC billing. The report provided a number of recommendations to increase control and enforcement in this arena. However, this is only one area of Medicare that addresses mental health. Other areas are equally prone to fraud and abuse.

The latest in the Medicare enforcement arena comes from Louisiana where the owner of three mental health centers was sentenced to pay $43.5 million in restitution and serve 8-and-one-half years in federal prison for a Medicare fraud scheme. A psychiatrist, who served as medical director and co-owner, was sentenced to 86 months in prison for his role in admitting mentally ill patients to the facilities, some of whom were inappropriate for partial hospitalization, and then re-certifying the patients’ appropriateness for the program in an effort to continue to bill Medicare for services. These were among 17 people who worked at the three facilities in a variety of roles who also been charged in the fraudulent operation that stretched seven years and involved over a quarter-billion dollars in Medicare fraud. They included therapists, marketers, administrators, owners, and the medical director. The companies billed Medicare for unnecessary or never provided partial hospitalization program services for the mentally ill. The companies, collectively, submitted more than one-quarter-billion dollars in claims to Medicare during this period. The scheme also involved falsifying records indicating patients had treatment they never received and paying recruiters to, in turn, pay patients to attend hospitalization programs at the facility in order to make Medicare claims.

The fraud problem is actually larger and more pervasive in the Medicaid program, which provides significantly more funding to this area. For example, last year New Mexico was in the midst of a sweeping criminal investigation into 15 of its largest mental health providers, suspected of defrauding Medicaid of $36 million over three years.

Examples of Fraud in the Mental Health Sector

• Altering and/or falsifying records to match services billed
• Billing for services not actually performed
• Errors and falsification of patient charts
• Fabricating patient files
• Paying kickbacks paid to recruiters to find beneficiaries
• Lack of a referral form from an approved provider source
• Lack of documentation for service provided
• Service notes lack specific treatment goal
• Billing for service not covered by Medicaid as a covered service
• Billing for a more expensive service than was actually rendered
• Prescribing category narcotic drugs to addicts or for selling on the street
• Changing the billed date of service to match client dates of eligibility
• Deliberately applying for duplicate reimbursement in order to get paid twice
• Inappropriate billing that results in a loss to the Medicaid program
• Providing services which are not necessary
• Billing for services performed by unqualified persons

Mental health scams target Medicare and Medicaid

As seen in this report

Fraud involving Medicare and Medicaid mental health benefits has been "a special enforcement problem that stretches back decades," according to former Department of Health and Human Services Inspector General Richard P. Kusserow. "Many healthcare fraud investigators believe mental health caregivers, such as psychiatrists and psychologists, have the worst fraud record of all medical disciplines," Kusserow wrote. That belief is largely based on numbers of prescriptions for narcotics and exploitation of patients diagnosed with mental illness or Alzheimer's disease.

One fraud hotspot is community mental health centers (CMHCs) that offer partial psychiatric hospitalization programs. In Medicaid, there's been "an explosion of fraud in community-based treatments," including billing for services not rendered, services provided by unlicensed staff or services tainted by kickbacks, according to Assistant U.S. Attorney Ted Radway.

The Medicare Strike Force made arrests for significant CMHC fraud involving programs serving about 25,000 beneficiaries, Kusserow noted. Yet just one out of nine Medicare Audit Contractors reviewed last year by the Office of Inspector General worked to thwart CMHC fraud, Kusserow noted. This finding led the agency to recommend increased controls and enforcement in this area.

A recent case involved Louisiana psychiatrist Zahid Imran who was sent to prison for his role in a Medicare scam involving partial hospitalization services. Imran admitted patients who didn't need partial hospitalization and then recertified their appropriateness for the program to keep the Medicare reimbursement flowing. Imran's crimes were part of a $258 million fraud scheme in which 17 people were convicted, including therapists, marketers, administrators, and owners of facilities in two states. Perpetrators paid recruiters to round up patients and altered documentation to make it look like they received treatment.

Mental health fraud is more pervasive in Medicaid, Kusserow wrote, since Medicaid and the states provide more funding to this area than Medicare. Last year, for example, New Mexico investigated 15 of its largest mental healthcare providers who were suspected of cheating Medicaid out of $36 million in three years.

Mental health provider shuts doors after state pulls Medicaid payments

Another Chapter in the Decline of Psychiatry, from a report by the Arkansas News Bureau

A Southeast Arkansas child mental health provider closed its doors Wednesday, a day after a judge cleared the way for the state to terminate Medicaid payments to the facility.

Lawyers for Gilead Family Resource Center, a McGehee-based provider cited by the state for billing irregularities and improper medical practices, had argued in court last week that the facility could not survive without Medicaid payments covering treatment for the bulk of its patients.

Pulaski County Circuit Judge Jay Moody advised lawyers in a brief letter Tuesday he was dissolving a temporary restraining order he issued June 6 that blocked the state Department of Human Services from cutting off payments to Gilead.

DHS moved quickly to terminate the payments to the company, which operated seven facilities in four southeastern Arkansas cities.

[...]

Moody's earlier order allowed Gilead to receive Medicaid reimbursements while appealing DHS' decision to terminate payments. Lawyers for Gilead filed an administrative appeal Wednesday with DHS.

In a June 2007 audit, just weeks before Gibson and others bought Gilead, the state questioned the appropriateness of some clients' diagnoses and medications and found billing problems that included multiple charges for services to the same client.

Auditors also found the facility used uncertified staff for counseling and therapy services, and said there appeared to be no oversight of services by a child psychiatrist.

[...]

DHS spokeswoman Julie Munsell said Gilead was reimbursed about $80,000 a week for providing mental health services to about 430 clients, mostly preschool children. DHS may try to recover the $160,000 or so the center received after Moody's initial order, along with the more than $800,000 the agency contends it is due from alleged billing irregularities, she said.

Gilead operated two facilities in both Hamburg and McGehee, and one each in Dumas, Lake Village and Monticello.

[...]

Prior to state sanctions, Gilead provided treatment for nine children in state custody. After those children were moved and re-evaluated, just two were deemed to need any sort of continued treatment, Munsell said.

New And Improved Drugs? No Thanks

As seen on CNN Money

New York psychiatrist Jeffrey Lieberman has heard Johnson & Johnson's (JNJ) sales pitch for the new anti-schizophrenia drug Invega, but he's not too impressed.

Problem is, Invega isn't much different than one of J&J's best-selling drugs, the antipsychotic Risperdal. In late June, Risperdal is scheduled to lose its U.S. patent protection, clearing the way for competing generic copies that are cheaper than Invega, which could further diminish Invega sales, already characterized as a disappointment by J&J.

"I don't think they have a strong case to make," says Lieberman, chairman of the psychiatry department at Columbia University's medical school. "It's basically a me-too drug, and the company hasn't done the studies that would be required to really distinguish it."

Lieberman's skepticism is shared by health insurers and points to a rising challenge for drug makers: a tougher market for so-called follow-on drugs. As a result, some companies - including Wyeth (WYE) and Shire PLC (SHPGY) - are setting prices lower or emphasizing improved dosing for the newer drugs to help overcome any skepticism that they're not much more effective than the older drugs set to lose patent protection.

The growing disdain for follow-on drugs also should reinforce the need for drug makers to come up with truly innovative products, not just marginally better ones, industry watchers say.

Drug companies have used follow-on drugs to try to offset some of the revenue lost when older, top-selling drugs lose patent protection and become exposed to generic knockoffs. The goal is to convince patients, doctors and drug plans to switch to the newer drug that carries a brand-name price and patent protection for years.

A successful example was AstraZeneca PLC's (AZN) promotion of the Nexium heartburn pill when its older drug, Prilosec, became exposed to U.S. generic competition in 2002. Nexium went on to become a huge blockbuster despite being chemically similar to Prilosec, which became available as both a cheaper generic and over-the-counter product.

Such tactics, however, might not work as well in today's environment, in which drug-benefit plans are demanding steeper discounts and pushing use of generic drugs in order to lower costs and bolster profit margins.

"We don't think those opportunities are really going to fly," Deutsche Bank pharmaceutical analyst Barbara Ryan said. "I think managed-care sees them for what they are, extending the franchise."

The skepticism around Invega has contributed to a financial disappointment for J&J. The New Brunswick, N.J., healthcare giant hasn't broken out Invega sales but acknowledges they've been below expectations. Invega's share of U.S. antipsychotic prescriptions was only around 2% for the week ended May 9, according to Verispan, a drug-data marketer. In comparison, Risperdal, which had 2007 sales of more than $4 billion, held a 21% market share.

Insurer Pressure

Some insurers aren't putting certain follow-on drugs on their lists of preferred drugs, or they're requiring members to pay higher out-of-pocket costs for these drugs than for other branded and generics.

"It's a marketing scheme that is not looking at improving healthcare, it's looking at maintaining their revenues coming in," said Mirta Millares, in commenting on the industry's follow-on drug strategy.

Millares is manager of drug information services at Kaiser Permanente, a California health insurer that doesn't include Invega on its list of preferred drugs. The active ingredient of Invega is derived from that of Risperdal, Millares noted, though it was different enough to get a new patent and regulatory approval.

Minneapolis-based UnitedHealth Group Inc. (UNH), the nation's largest health insurer by revenue, has Invega on the "third tier" of its preferred drug list, which means members have to pay higher copays than if they were to use other schizophrenia drugs on the first and second tiers. The insurer deemed Invega clinically similar to other atypical antipsychotics.

Clinical studies supporting Invega's December 2006 Food and Drug Administration approval primarily compared it with a fake drug, or placebo, but not with Risperdal. In 2007, J&J released data showing Invega improved symptoms over AstraZeneca's Seroquel antipsychotic, which is the market leader for U.S. antipsychotic prescriptions. Also, J&J touts Invega's long-acting formulation and once-daily dosing.

J&J says it's not encouraging patients who are stable on Risperdal to switch to Invega. But it had hoped for Invega's performance to be better by now, making Risperdal's loss of U.S. market exclusivity next month less painful. "We need to do a better job at drawing a differentiation in a difficult-to-treat population, " David Norton, J&J's group chairman of pharmaceuticals, said earlier this month.

Norton said J&J should have ensured Invega had more favorable coverage by drug plans at the time of market launch. Still, he noted that new antipsychotics have historically taken a while to gain acceptance.

J&J has said it plans to seek FDA approval for Invega as a treatment for bipolar disorder, which could bolster sales. It also has applied for FDA approval of a long-acting, injectable version of Invega.

New Marketing Strategies

Despite the challenges, drug-company marketing remains a powerful tool, and it might be too early to write off follow-on campaigns such as that for Invega. The real test may come when Risperdal goes off patent, and J&J reduces its active promotion of Risperdal, leaving sales reps to focus on Invega.

"There are plenty of studies showing physicians are susceptible to marketing practices in their prescribing patterns," said Aaron Kesselheim, an instructor in medicine at Harvard Medical School who researches drug marketing. "My perception is that hasn't changed substantially."

A new marketing campaign that might be meeting with more success is underway at Shire, Basingstoke, U.K., which last year began selling a new drug for attention deficit hyperactivity disorder, Vyvanse. Shire's top drug, Adderall XR for ADHD, will face generic competition beginning next year.

So far, Vyvanse has captured about 7% of U.S. ADHD drug prescriptions, according to Verispan, which Chief Executive Matthew Emmens calls good progress. Although Shire recently said it expected 2008 Vyvanse sales to come in at the lower end of its forecast range of $350 million to $400 million, Emmens said in an interview he was confident that Vyvanse's market share will eventually surpass Adderall XR's peak market share of about 26%.

Emmens noted that Vyvanse is a different chemical entity than Adderall XR, and he thinks its pricing is attractive to health insurers. "In a general nature, the market has become more price sensitive in the last 10 years," he said. Not incidentally, in the 1990s, Emmens headed the AstraZeneca partnership with Merck & Co. (MRK) that marketed Prilosec and he was involved in the planning for Nexium's marketing.

The next test of the drug-switch campaign?

Wyeth, Madison, N.J., recently began selling Pristiq, an antidepressant that is chemically similar to Wyeth's older antidepressant Effexor XR, which is expected to face limited generic competition this year. Deutsche Bank's Ryan thinks the odds of Pristiq's success are slim because it appears to offer few benefits beyond those of Effexor.

Wyeth has said Pristiq is effective at treating depression, offers a convenient dose regimen for most patients, and is being priced at a 20% discount to Effexor.

Screening brings labeling, drugs

Of Interest is this letter to the editor in the Boston Globe by a psychiatrist from the State of New York, regarding the recent start of mental health screening for children under the care of the Medicaid program.

As a psychiatrist since 1947, I am appalled that mental health screening is now being required of Massachusetts children on Medicaid ("Mental screening for young to begin," Page A1, Dec. 27). Such screening greatly exaggerates the significance of the normal variations in psychological state.
more stories like this

Normal kids will therefore be labeled "sick" and referred for "treatment." That labeling is often harmful in itself; once tagged, how does a kid prove he's not mentally ill?

In some middle-class families, treatment may be individual or family counseling. Whether it helps or is merely wasteful, it usually causes relatively little harm. For Medicaid kids, however, treatment will almost always involve powerful drugs whose serious side effects can include the stunting of growth. Mental health screening is thus a harmful invasion of the privacy of Medicaid youngsters.

Dr. NATHANIEL S. LEHRMAN
Roslyn, N.Y.

See also Our own earlier report

More on the NY state audit of Mental Health Care Providers

Further details on a NY state audit. As seen in this report, with a link to our earlier story here.

A psychiatrist improperly billed Medicaid on eight separate occasions for more than 24 hours of treatment in a single day and appears to have billed for patients he never treated, among other improper practices, according to an audit released by State Comptroller Thomas P. DiNapoli.

"Most doctors work hard, but it is difficult to imagine how anyone can put in more than 24 hours in one day on multiple occasions," DiNapoli said. "This should have immediately raised red flags and the psychiatrist should never have been paid. Better systems must be put in place by the Department of Health to prevent these types of payments from being made in the first place."

In an analysis of payments for mental health services from August 1999 to October 2006, auditors identified more than $1.3 million in Medicaid overpayments for mental health services - many of which could have been prevented with additional controls in the eMedNY Medicaid claims processing system. The State Department of Health (DOH) administers Medicaid and the eMedNY system.

Among the audit’s primary findings:

One mental health provider who was paid more than $436,000 billed Medicaid on eight separate occasions for more than 24 hours - and as high as 42 hours in one instance - of service in a single day. He admitted to auditors he did not see certain patients for which he billed Medicaid. Auditors also discovered his clinical social worker saw certain patients but Medicaid was billed at the higher psychiatrist’s rate.

389 providers submitted more than 27,000 claims valued at $662,000 for mental health services and pharmacologic management provided on the same day. Under Medicaid rules, psychiatrists who provide mental health evaluation and management services for patients cannot bill the program for prescribing medication - known as pharmacologic management - on the same day.

106 clinic-based mental health practitioners received 21,132 payments totaling more than $381,000 from June 2002 through December 2005 for services for which the clinic also received payment. When services are provided at clinics, only the clinic not the individual service provider is permitted to bill Medicaid.

1,898 instances were identified in which 27 different clinics had billed Medicaid twice at different rates for the same services. From June 2001 through October 2006, the overpayments totaled $302,568.

Auditors met with nine of these providers who double billed, eight of whom indicated that they were confused about the rules and misinterpreted DOH policy. The auditors recommended that DOH add a control to the eMedNY system to block payment for pharmacologic management when it is billed in conjunction with other mental health services. Auditors made a similar recommendation to improve the eMedNY system to block duplicate payments.

DOH indicated in its response to the audit that it would implement recommended controls and other strategies to avoid many of the overpayments found by auditors and would seek to recover any funds paid to providers in error. The complete response is included in the audit.

The findings of the audit have been referred to the Office of the Attorney General.

For a copy of the audit visit

http://www.osc.state.ny.us/audits/allaudits/093008/06s53.pdf

NC Psychiatric Hospital Fails Surprise Inspection, Could Lose Accreditation. Director Replaced

Report from Asheville, North Carolina.

A new director was appointed at Broughton Hospital on Monday after the hospital failed a surprise accreditation inspection last week.

Dr. Art Robarge, who was director of Broughton from 1986-89, has been named interim director, replacing Seth P. Hunt, who had been director since 1995.

Inspectors from the Joint Commission on Accreditation of Healthcare Organizations, an independent nonprofit, have notified Broughton they will recommend a preliminary denial of accreditation. That will give Broughton 45 days to address the problems found by inspectors, or it will lose its ability to receive payment from private insurance companies.

The hospital also did poorly in a recent mock run-through of a Center for Medicare and Medicaid Services inspection by N.C. Department of Health and Human Services staff.

Broughton cares for about 300 patients a month. It is the westernmost of the state’s four psychiatric hospitals and serves people from 37 counties.

The hospital lost certification to receive payment from Medicaid and Medicare in August, and the state has been paying roughly $1.3 million a month to make up for the federal money lost.

[...]

Among the problems the Joint Commission found at Broughton Hospital:

Restrained patients

• There was insufficient proof that staff consistently does a daily physical exam on people who are in restraints to verify a continued need.

• The hospital had insufficient proof that staff had attempted nonphysical techniques before using manual restraint or seclusion.

Cleanliness and safety

• Infection control plans were inadequate, and there was inadequate risk analysis of infection-control data.

• The hospital provided insufficient documentation for fire alarm testing. Fire department connection tests had not been completed, and hospital plans did not show that the local fire department was called when a fire alarm sounded.

Documentation

• The hospital had inadequate proof that a patient had given informed consent for medication with psychotropic drugs.

• Legal guardianship of a patient was not always determined.

• Development of individualized treatment plans was inadequate.

• More than 50 percent of the discharge summaries that documented patient assessment, care, treatment and services were late.

Adobe Acrobat PDF Report from the state on the mock run-through of a Center for Medicare and Medicaid Services. (40 KB)

Antipsychotic Drugs Abused as Chemical Restraints for Elderly

The WSJ Health Blog is carrying this item pointing to this expose in The Wall Street Journal

Nursing homes are loading up patients on antipsychotic drugs and regulators have started to take notice, the WSJ reports.

Almost a third of patients in nursing homes are receiving powerful antipsychotic drugs, the feds say. And patients can be given the medicines, whether they are psychotic or not. The drugs are often used to calm demented patients, some with Alzheimer’s disease, and to help maintain order in nursing homes, which are often understaffed and reluctant to use physical restraints. But the FDA hasn’t approved the drugs for these uses, compounding the ethical questions.

Nearly 21% of the nursing-home patients who receive the drugs don’t have a psychosis diagnosis and some think that’s too much. “You walk into facilities where you see residents slumped over in their wheelchairs, their heads are hanging, and they’re out of it, and that is unacceptable,” says Christie Teigland, director of informatics research for the New York Association of Homes and Services for the Aging, a not-for-profit industry group.

Commenting on the WSJ article, the blog Furious Seasons notes that the “numbers are alarming, especially since there is no scientific proof that these drugs work well in dementia patients and are, in fact, outperformed by placebo,” according to a federally funded study known as CATIE.

[...]

Massachusetts finds 35 children on excessive psychiatric drugs, more to come

From a longer report in the Boston Globe

Following the death of a 4-year-old Hull girl from an overdose of psychiatric drugs last December, state officials have set up a unique early-warning system to spot preschoolers who may be getting excessive medication for mental illness. In just the first three months, the system has flagged the cases of at least 35 children for further investigation, and the number is sure to rise.

The state Medicaid program is analyzing records of 82,900 children under age 5, looking for those taking at least three psychiatric drugs or a single prescription of a powerful antipsychotic drug. Mental health professionals will review the care of these children and, if necessary, contact the prescribing doctor for an explanation, say officials of the state insurance program for lower-income families, known as MassHealth.

Although cases like the overdose of Rebecca Riley are rare, the prescription of psychiatric drugs to young children is not. Doctors last year prescribed Clonidine - a drug sometimes used to treat hyperactivity that was found in lethal quantities in the Hull girl's bloodstream - to 955 children under age 7 in MassHealth. Doctors also prescribed antipsychotic drugs, which raise the risk of diabetes and obesity, to 536 children under age 7, according to MassHealth records. MassHealth could not say how many of these cases involve children under age 5 and might be subject to review.

Some psychiatrists have been concerned for years about the rise of psychiatric drug treatment of young children, largely because few preschoolers are old enough to show clear signs of mental illness and there are almost no studies on how the chemicals affect their developing brains. But until Riley's death from three drugs she was taking to treat bipolar disorder and hyperactivity, the state provided little oversight of doctors' prescribing practices.

Riley's death "was a wake up call," said Dr. John Straus, vice president for medical affairs at the Massachusetts Behavioral Health Partnership, one of the organizations that manage mental health care for children in MassHealth. He said MassHealth managers want to make sure that doctors have good reason for prescribing psychiatric drugs to such young patients and that they are not relying solely on the parents or guardians for information about each child's condition. Riley's parents have been charged with deliberately giving her a fatal overdose.

[...]


Riley's death focused attention on the growing use of drugs among preschoolers for another condition, bipolar disorder, which is characterized by wide mood swings and was once thought to begin in late adolescence. Her doctor, Kayoko Kifuji, diagnosed the girl with the condition when she was 2 1/2 years old. Kifuji has voluntarily given up her license to practice medicine while regulators investigate her treatment of Riley, and the girl's mother, Carolyn Riley, said on "60 Minutes" last Sunday that she no longer believes her daughter was bipolar. The parents blame Kifuji for their daughter's death, though she denies wrongdoing.

Despite unease over the amount of psychiatric drugs being prescribed to preschoolers, few states have tried to rein in prescriptions beyond drug educational programs for doctors or other forms of doctor assistance, such as Massachusetts' popular network of psychiatrists who are available for instant phone consultations concerning young patients.

[...]

Psychologist guilty of fraud

from this report out of Corpus Christi

A 53-year-old psychologist with a professional office in Corpus Christi has been convicted of defrauding Medicare and Medicaid for millions of dollars, officials with the U.S. Attorney's Office and Texas Attorney General Greg Abbot said Friday.

A jury in a Corpus Christi federal courtroom found Joe Luis Lerma guilty Wednesday of nine counts of health care fraud. Lerma was accused of billing Medicare and Medicaid for services not performed by a licensed psychologist, not provided under the supervision of a licensed psychologist, or not provided at all, or for double billing for services over a 2 1/2-year period beginning in September 2002, officials with the U.S. Attorney's Office said.

Between January 2002 and June 2006, Lerma billed Medicare/Medicaid more than $1.7 million for two procedures, according to a press release by the U.S. Attorneys' Office.

An Oct. 24 sentencing hearing has been set by U.S. District Judge Hayden Head, who presided over the trial. Lerma faces as many as 10 years in prison for each of the nine counts. He also could face up to $250,000 in fines on each count, a spokeswoman for the U.S. Attorney's Office said.

"Texans will not tolerate the abuse of our Medicare system and those who depend on it for their health care," Abbot said in a press release.

According to evidence presented in the five-day trial, federal investigators found Lerma hired people with master's degrees in the psychological field to do psychological testing on a contract basis. Some were licensed by the Texas State Board of Psychologists and some were trainees, the press release states.

Under Medicaid regulations, psychologists cannot bill for services performed by others, officials with the U.S. Attorney's Office said.

Furthermore, Lerma used the subcontractors to perform testing, paying them $125 to $150 to perform examinations, the press release states. Medicaid was billed $750 for each test and $150 for the interview session.

Lerma is free on bond until his sentencing hearing, the release added. A phone call to his office went to a voice mailbox for the practice.