Massachusetts Home Health Agency Settles Improper Billing Allegations for $10M

Over the past few weeks, government officials have seemingly restarted their aggressive oversight of Medicare-certified home health agencies.

For much of 2020, government watchdogs took a measured approach to health care oversight and enforcement, allowing operators to focus their efforts on COVID-19 mitigation instead of paperwork and compliance. But multiple settlements and charges have been made recently.

On Friday, for example, Massachusetts Attorney General Maura Healey announced that her office reached a $10 million settlement with a Lawrence-based home health care company and its owner to resolve allegations that they falsely billed MassHealth for unauthorized services.

Under the terms of the settlement, Maestro-Connections Health Systems LLC and its CEO will pay $10 million to resolve allegations that — from January 2014 through August 2019 — the provider knowingly submitted false claims to MassHealth and the state’s managed care entities for home health services that had not been appropriately authorized by a physician.

Maestro has locations in Lawrence, Auburn, Athol, Framingham, Taunton, Holyoke and Lynn, according to the attorney general’s office.

“Companies like Maestro that defraud MassHealth take vital resources away from the program and the people who need them most,” Healey said in a statement. “Since 2016, my office has recovered $40 million for MassHealth by combating fraud, waste and abuse in the home health industry. Our work continues to ensure health care dollars are spent appropriately.”

To bill MassHealth for home health services, a provider must ensure that the member’s physician has reviewed and signed a plan of care certifying that home health services are medically necessary. Home health agencies are required to maintain these records for at least six years after the medical services are provided and claims have been presented for payment.

Healey’s team alleged that Maestro billed for services for which it did not have valid, signed plans of care certifying that those services were medically necessary.

In addition to the financial payment, the settlement includes a requirement that Maestro not resume providing services to MassHealth members until it has hired an independent compliance monitor to oversee a three-year compliance program. That program must include updated policies and procedures, new training for staff, and yearly audits conducted by the monitor, according to the attorney general.

Maestro and its CEO previously agreed to pay more than $1 million in restitution and penalties after failing to pay overtime to more than 600 home health aides and failing to keep accurate payroll records.

In October 2020, Altranais Home Care of Lowell similarly paid $3.1 million to resolve allegations that it falsely billed MassHealth for unauthorized services.

The attorney general’s Medicaid Fraud Division recovered more than $45 million for MassHealth in federal fiscal year 2020. Since 2016, MassHealth spending on home health services has decreased by more than 50%.

The news out of MAssachusetts is not the only oversight development from the past week.

On Dec. 15, U.S. Attorney Ryan K. Patrick announced that two Houston, Texas-area home health agency owners were set to appear in federal court on charges they fraudulently billed more than $10 million to Medicare.

Allegations against the owners, which co-owned SierCam Healthcare Services LLC, claim that they billed Medicare for home health services that were not medically necessary and often not provided as billed to Medicare from 2012 to 2020. The charges also allege the owners paid SierCam patients to sign up for medically unnecessary home health services and provided free transportation, covering the co-payments and other fees at doctor’s office visits “to facilitate their health care fraud scheme.”

Additionally, the owners allegedly created “phony medical records” to make it appear the services met Medicare’s criteria for reimbursement, according to the indictment from Patrick’s office.

If convicted of conspiracy to commit health care fraud and related offenses, the owners could face a sentence of 10 years in federal prison and a maximum $250,000 fine. If convicted of conspiracy to pay and receive health care kickbacks, they could also face up to five years in federal prison and a possible $25,000 maximum fine.

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Home Health Agency, Former Executives to Pay $5.8M to Settle False Claims Act Allegations

Doctor’s Choice Home Care Inc. and two former executives have agreed to pay $5.15 million to resolve allegations that the home health agency provided “improper financial inducements” to referring physicians through “sham medical director agreements,” the U.S. Department of Justice (DOJ) announced earlier this month.

DOJ had also alleged that the agency offered bonuses to physicians’ spouses, who were Doctor’s Choice employees

Timothy Beach and Stuart Christensen founded Doctor’s Choice and formerly served as its top executives. The Sarasota-based home health agency has branches throughout the state of Florida.

Under terms of the settlement, Doctor’s Choice will pay nearly $3.9 million, with Beach and Christensen each paying $647,000. The claims resolved by the settlement are allegations only, as there has been no determination of liability, according to DOJ.

“The Department of Justice will continue to hold companies and individuals accountable for the payment of illegal remuneration in any form,” Acting Assistant Attorney General Jeffrey Bossert Clark of DOJ’s civil division said in a statement. “Improper inducements have no place in our federal health care system, which relies on health care providers making decisions based on the health care needs of their patients and rather than their personal financial interests.”

Doctor’s Choice will reportedly pay an additional $675,000 to resolve separate allegations that employees pressured clinical personnel to increase the number of home visits for Medicare patients to avoid being hit with a Low Utilization Payment Adjustment (LUPA).

“Operating an illegal referral scheme and providing medically unnecessary services places patients at risk and jeopardizes millions of taxpayer dollars,” Special Agent in Charge of the FBI Tampa Division Michael McPherson said.

The allegations resolved in the settlement were originally brought in two lawsuits filed under whistleblower provisions of the False Claims Act by former Doctor’s Choice employees.

For their involvement in the case and subsequent financial settlement, the employees will jointly receive a share of about $145,000, specifically from the government’s recovery of the LUPA allegations.

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Home Health Provider to Pay $3.1M to Resolve Improper Billing Allegations

A Massachusetts-based home health company and its owners will pay millions of dollars to resolve allegations that they falsely billed the state’s Medicaid program, MassHealth.

The home health company is Altranais Home Care LLC, located in Lowell. Massachusetts Attorney General Maura Healey announced Friday that the company and owners Constant Ogutt and Shakira Lubega will pay a total of $3.1 million to resolve allegations associated with the medical necessity of services dating back to 2014.

Specifically, allegations claimed that Altranais Home Care submitted false claims to MassHealth and MassHealth’s managed care entities for home health services not appropriately authorized by a physician. The provider did so “knowingly” or “in reckless disregard of billing requirements,” according to the attorney general.

“Home health companies have an obligation to provide only those services that are medically necessary,” Healey said in a statement. “This company allegedly defrauded MassHealth and improperly used scarce resources for services that were not deemed necessary by a physician.”

The settlement is part of a broader home health enforcement effort in Massachusetts to combat fraud, waste and abuse.

In April 2019, Avenue and Amigos Home Care paid a combined $10 million to resolve allegations of similar false billing. In August 2019, Guardian Healthcare paid $1.95 million to resolve similar allegations, too.

Juries additionally convicted owners of home health care agencies in connection with other schemes to defraud MassHealth in May 2019 and August 2018.

As part of its business mix, Altranais Home Care provides skilled nursing, therapy and social services. The company’s founders — both nurses — opened their first location in Tewksbury, Massachusetts, before expanding throughout the east, central and western portions of the state.

Financial settlements to resolve allegations associated with the medical necessity of services are not uncommon in the industry. Such settlements are also not an admission of guilt by the provider.

Apart from its financial settlement, Altranais Home Care will be mandated to operate under a multi-year independent compliance program, according to the Massachusetts attorney general.

The program will be implemented by “an independent compliance monitor.” It will require the company to establish updated policies and procedures ensuring compliance with federal and state laws. It will also require the provider to conduct annual training for all employees and perform annual audits, the results of which will be reported to the attorney general’s office. 

“Today’s outcome is the result of MassHealth’s strong program integrity efforts to prevent fraudulent billing, and demonstrates the ongoing relationship between MassHealth and the Medicaid Fraud Division,” Dan Tsai, assistant secretary for MassHealth and the Massachusetts Medicaid director, said in a statement.

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Humana lawsuit exposes fraud risk in high-growth telehealth market

Health insurer Humana has filed a lawsuit against telemedicine company QuivvyTech that it says resulted in fraudulent prescriptions worth millions of dollars being written for duped customers.

According to the complaint, QuivvyTech hired telemarketers to cold-call Humana members, whose details were obtained using “illegal means,” and encouraged them to talk about common ailments, claiming to be calling from Humana.

The script used by the telemarketers was designed to prompt members into describing medical conditions such as “pain and inflammation, acne breakouts, eczema or psoriasis episodes, cold sores, or conditions commonly treated with antifungal medications such as athlete’s foot,” it adds.

The company is accused of then passing on the call recordings and other information to physicians – some of whom are also named in the suit – who then prescribed medicines to the Humana patients without informing them “and never having met or spoken to them.”

“They designed pre-printed prescription forms with multiple options of pre-determined categories of medical conditions with the physician marking boxes for medications, often high-dollar cost topical creams and ointments,” claims Humana and its legal counsel.

The suit also mentions “co-conspirator pharmacies” which it claims were also in on the scam and billed, dispensed and shipped the medicines to patients, often numerous times via automatic refills.

The pharmacies aren’t named as defendants in the lawsuit because of “contractual arbitration provisions” between them and Humana, but are identified in the complaint.

Humana says it paid out between $590,000 and $2.3 million to reimburse drugs prescribed by the six doctors named in the lawsuit, for a total of almost $10 million.

The suit exposes the potential for fraud with telemedicine, which has come to the fore during the COVID-19 crisis at the same time as use of digital health approaches has skyrocketed, fuelled by increased reimbursement of virtual healthcare consultations though Medicaid and Medicare.

Some of the scams identified by a recent article in Fraud magazine include “fraudulent claims using false diagnoses, phantom patients, fake telemedicine appointments and insurance reimbursement for non-essential drugs and fictitious treatments.”

Needless to say, this type of activity undermines the benefits that can accrue from greater use of telehealth services, including reduced burden on healthcare practitioners and easier access to care for people living in remote areas or those who have mobility difficulties.

Image by Sabine van Erp from Pixabay

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