Tag Archives: fraud

Life Care Centers Investigated for Medicaid Fraud

CLEVELAND, Tenn. (AP) — Federal prosecutors claim a Medicare fraud scheme at Cleveland-based Life Care Centers of America was cooked up and enforced by management.
According to recently unsealed court records obtained by the Chattanooga Times Free Press (http://bit.ly/TkQ7wF) managers are accused of instructing therapists to assign patients to the highest level of therapy regardless of whether it was needed.
The “Ultra High” level and can pay a provider as much as $564, while the lowest rate of therapy pays $231.
The whistleblower lawsuits claim that employees who questioned the policies were often fired within weeks.
Company representatives declined comment to the newspaper, referring reporters to a letter stating that Life Care’s therapy programs improve patients’ conditions and quality of life.
If found guilty, Life Care could face hundreds of millions in fines.

Psychiatrist to Pay $325K for Overbilling TennCare

News release from Tennessee attorney general’s office:
A Madison psychiatrist will pay the State of Tennessee more than $325,000 for allegedly overbilling TennCare patients for visits, Tennessee Attorney General Bob Cooper announced today.
Named in the agreement is psychiatrist A.K.M. Fakhruddin who is alleged to have overbilled patients for psychotherapy visits. Such practices are illegal under the Tennessee Medicaid False Claims Act. The settlement, which included substantial penalties, represents nearly three times the amount Fakhruddin is alleged to have taken from the program.
An investigation by the TennCare Provider Fraud Task Force revealed that from May 2007 to December 2010, Dr. Fakhruddin billed for extensive 45-50 minute psychotherapy visits when in most cases he was performing brief medication management services with minimal psychotherapy.
“In a few instances, he billed for more than fifteen hours in a day when the actual time spent with patients was a fraction of that amount,” Attorney General Cooper said. “The Task Force takes very seriously the misuse of taxpayer dollars and will continue to work diligently to end such practices. ”
The fraud concerned billings for over 150 patients. The Task Force includes the Attorney General’s Office, TennCare, the Tennessee Bureau of Investigation’s Medicaid Fraud Control Unit and the Office of Inspector General. It is charged with pursuing fraud by any TennCare provider. General Cooper noted, “The Task Force concentrates on every aspect of Medicaid Fraud, which includes not only physicians and drug companies but also mental health services.”
Inspector General Deborah Faulkner stated, “The State of Tennessee is aggressively investigating TennCare fraud and abuse from every angle by working in unison to achieve the overarching goal of protecting taxpayer resources. The cooperation between our Offices is an example of a successful collaboration to stop TennCare fraud.”
Dr. Fakhruddin, who intends to retire and sell his practice, has denied any wrongdoing. There were no allegations of patient harm.

On Teachers Cheating on Tests

By Adrian Sainz, Associated Press
MEMPHIS, Tenn. — It was a brazen and surprisingly long-lived scheme, authorities said, to help aspiring public school teachers cheat on the tests they must pass to prove they are qualified to lead their classrooms.
For 15 years, teachers in three Southern states paid Clarence Mumford Sr. — himself a longtime educator — to send someone else to take the tests in their place, authorities said.
Each time, Mumford received a fee of between $1,500 and $3,000 to send one of his test ringers with fake identification to the Praxis exam. In return, his customers got a passing grade and began their careers as cheaters, according to federal prosecutors in Memphis.
Authorities say the scheme affected hundreds — if not thousands — of public school students who ended up being taught by unqualified instructors.
Mumford faces more than 60 fraud and conspiracy charges that claim he created fake driver’s licenses with the information of a teacher or an aspiring teacher and attached the photograph of a test-taker. Prospective teachers are accused of giving Mumford their Social Security numbers for him to make the fake identities.

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GOP State Senate Candidate Accused of Tearing Up Dying Woman’s Will

The state Democratic party is emailing media copies of a story by West Tennessee radio station WCMT on allegations about Republican state Senate candidate John Stevens, raised by his Democratic opponent, Brad Thompson. It starts thusly:
MARTIN – Carol Andrews, Campaign Manager for District 24 State Senate Candidate Brad Thompson, today released official court documents showing that candidate John Stevens admitted to an unethical and unlawful act involving interference with the wishes of a dying woman to leave her estate to helping sick and troubled children.
In 2010, Stevens signed an official affidavit admitting to his wrongdoing. Andrews made the following statement and provided background materials on the story:
“Some disturbing news has come to my attention regarding our opponent in this race. This is an incredible story and one that voters deserve to know. It illustrates that John Stevens is a man who simply cannot be trusted.
“The story I am relating is all readily available in the Circuit and Chancery Court Clerks’ offices in the Carroll County Courthouse just across the street from John Stevens’ law office.
Official court documents show that John Stevens broke Tennessee law by interfering with a dying woman’s wish to leave her estate to St. Jude’s Children Hospital – to a hospital known around the world for caring for children with cancer — and Youth Town of Tennessee, a center here in West Tennessee that helps troubled youth.
“According to official court documents, John Stevens lied to nurses in a Jackson hospital to gain access to the dying woman’s bedside to tear up her will.
“Her name was Ruth Karas.
“Mrs. Karas was in a coma. John Stevens had already drawn up other papers putting other people in control of the woman’s estate.
“Mrs. Karas died a day after John Stevens tore up her will.
“John Stevens’ acts were unethical and according to the Tennessee Code Annotated, a felony.
“On his web site, John Stevens claims that “he is an attorney in private practice helping families and farmers with elder law and estate planning,” yet he helped prey upon an elderly woman as she lay dying.
“John Stevens later signed an official affidavit admitting that he committed this act. He agreed with a nurse’s deposition that he tore up the will of an elderly woman as she lay dying in a coma. John Stevens had even been so craven as to ask this nurse to video his act on his telephone.
“John Stevens was not the dying woman’s attorney and had not previously been involved in her will.
“According to Tennessee Code Annotated, Stevens’ act is against the law. It is most certainly unethical and heinous to interfere with a dying woman’s wish to leave her estate to an interest to help children with cancer.
“Voters deserve to know this about John Stevens. This shows that he certainly cannot be trusted.”

State Sets Up New Identity Theft Law Enforcement Unit

NASHVILLE, Tenn. (AP) — Tennessee’s safety department is creating a new unit to investigate identity theft crimes that local law enforcement agencies don’t have the resources to target.
Commissioner of Safety and Homeland Security Bill Gibbons announced on Tuesday that the 14-member unit would be made up of personnel from the Tennessee Highway Patrol, the state Office of Homeland Security and the Driver Services division.
The unit will also work with the U.S. Secret Service in Memphis and Nashville, the federal Homeland Security Investigations department and the FBI’s Memphis division.
Gibbons said identity theft and fraud crimes are a growing problem in Tennessee, but many local law enforcement agencies don’t have enough resources or manpower to investigate these crimes.
“When you go to local law enforcement agencies across the state, they will pretty much tell you that identity crime is one of the toughest types of crimes for them to investigate,” he said. “Very few police departments have investigators that have the expertise to investigate these types of crimes.”

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TN Getting $5M More from Abbot Laboratories

News release from Attorney General’s office:
Tennessee Attorney General Bob Cooper and Health Care Finance and Administration (HCFA) Deputy Commissioner Darin Gordon announced Tennessee will receive at least $5 million as part of a $1.5 billion settlement with a major pharmaceutical company. The announcement comes on the heels of a separate consumer protection agreement announced Monday with Abbott Laboratories of almost $2 million designated for Tennessee.
The agreement resolves allegations by Tennessee, several other states and the federal government that Abbott Laboratories illegally marketed Depakote. The states contend that from January 1998 through Dec. 31, 2008, Abbott promoted the sale and use of Depakote for uses that were not approved by the Food and Drug Administration as safe and effective. This alleged conduct resulted in false claims to Medicaid and other federal healthcare programs.
In addition, Abbott is alleged to have made false and misleading statements about the safety, efficacy, dosing and cost-effectiveness of Depakote for some unapproved uses; improperly marketed the product in nursing homes; and paid illegal remuneration to healthcare professionals and long term care pharmacy providers to induce them to promote and/or prescribe Depakote.
The $1.5 billion settlement is the second largest recovery from a pharmaceutical company in a single civil and criminal global resolution. Abbott Laboratories will pay the states and the federal government a total of $800 million in civil damages and penalties to compensate Medicaid, Medicare, and various federal healthcare programs for harm suffered as a result of its conduct. In addition to the civil settlement, Abbott Laboratories has pleaded guilty to a violation of the Food, Drug, and Cosmetic Act (FDCA) and agreed to pay a criminal fine and forfeiture of $700 million. Further as a condition of the settlement, Abbott Laboratories will enter into a corporate integrity agreement with the U.S. Department of Health and Human Services, Office of the Inspector General. By law, the whistleblowers will receive a portion of the proceeds.
“Our Office will continue work diligently with our state and federal partners to pursue any company that attempts to illegally divert funds designated for TennCare,” Attorney General Cooper said.
“The hard work from state and federal authorities to ensure taxpayer dollars are not misused is vital to the success of the TennCare program,” Deputy Commissioner Gordon said. “The continued investigation and prosecution of Medicaid fraud is a significant component in keeping TennCare’s trend well below national levels.”
This settlement is based on four whistleblower cases that were consolidated and are pending in the United States District Court for the Western District of Virginia in Abingdon, Virginia. The cases were filed under Federal and State false claims statutes. A state team appointed by the National Association of Medicaid Fraud Control Units participated in the investigation and conducted the settlement negotiations with Abbott on behalf of the participating states.

Court of Appeals Rules Against Shelby Election Challenge

JACKSON, Tenn. (AP) — The Tennessee Court of Appeals has ruled against several losing candidates who filed suit against the Shelby County Election Commission claiming the 2010 county election races were rigged.
The appellate court on Monday said the candidates failed to show that “fraud or illegality so permeated the conduct of the election as to render it incurably uncertain.”
The unanimous opinion upholds the ruling of a lower court in Shelby County.
All but one of the losing candidates ran as a Democrat, the other running in a nonpartisan judicial race. They filed the lawsuit after Republicans, who control the county election commission, unexpectedly won the races.
The lawsuit asked a court to void the election and prevent the winners from taking office.

Former State Legislator Sued for $80 Million

MEMPHIS, Tenn. (AP) — A West Tennessee financial adviser and former state representative is the target of an $80 million lawsuit that claims plaintiffs were duped.
Larry Bates of Hardeman County is among the defendants in the suit filed Wednesday in U.S. District Court in Memphis. Bates served in the Tennessee General Assembly 1971-76 as a Democrat.
The website of First American Monetary Consultants lists Bates as the company’s founder and “political economist.”
WMC-TV in Memphis reported the lawsuit against Bates and others claims the company fraudulently persuaded customers to buy gold and silver coins, but withheld delivery (http://bit.ly/vW2aFq ).
The plaintiffs claim FAMC targets Christians and uses Bible quotations in its pitch.
Bates told the station the lawsuit is “pure nonsense” and said it was motivated by a disgruntled former employee and political opponents.

Health Care Fraud Prosecutions Up Under New Law; $100 Million in TN

After last year’s health-care reform law gave prosecutors expanded enforcement tools, President Barack Obama pledged that auditors would cut deeply into fraud he estimated at tens of billions of dollars each year.
Since then, according to the Tennessean, efforts in Tennessee alone have netted court orders and settlements recouping more than $100 million this year, up from $3 million.
“It used to be that if you were a U.S. attorney, the fraud cases didn’t seem like the sexiest thing in the world,” said Patrick Burns of the Washington, D.C.-based nonprofit Taxpayers Against Fraud. “Suddenly, fraud fighting, instead of having been a career liability, is in fact a career-maker.”
U.S. Attorney Jerry Martin, in interviews and speeches, has vowed to prosecute fraud cases of all sizes in Middle Tennessee, from individuals running sham storefronts to elaborate false-billing schemes. Prosecutors here have closed several cases in recent years, ranging from an $82.6 million judgment against a company charged with overbilling for equipment to a probation sentence for a Nashville-area psychiatrist and minister who billed Medicare for prayer sessions described as psychotherapy.

TN Insurance Scams Reported Today

$6 Million Fraud in Kingsport
KINGSPORT — A former Kingsport MetLife broker, who stole more than $6 million from MetLife customer accounts, has pleaded guilty to federal wire fraud and money laundering charges, according to the Kingsport Times-News.
Mark Edward Salyer, 47, pleaded guilty to the charges in U.S. District Court in Greeneville on Wednesday and faces up to 30 years in prison and a $500,000 fine. A sentencing hearing has been scheduled for March 19.
Some Fraud Victims Repaid
State officials plan to distribute $300,000 to roughly 172 consumers nationwide related to complaints against a company accused of selling bogus health insurance, reports the Tennessean.
The money comes from funds recovered or collected by the court-appointed receiver that oversees United States Benefits LLC. The company, which also went by names that included United Benefits of America LLC, was shut down and its assets frozen a year ago as part of a nationwide crackdown on sellers of bogus discount health plans disguised as major medical insurance.
U.S. District Court Judge Kevin Sharp in Nashville, meanwhile, this week agreed to ban United States Benefits’ owners and officers Tim Thomas and his wife, Keenan Dozier Thomas, and their defunct companies from selling health benefits and health insurance.
They could face more legal action if the U.S. attorney’s office in Nashville chooses to pursue a criminal contempt case related to violation of a court order that froze their assets
.