[Tampa, FL] Managed health care services provider WellCare is again in the news for “allegedly” filing false Medicaid claims, lining their accounts with taxpayer funds, market abuses, and other unlawful practices.

Yesterday, United States Attorney Robert E. O’Neill announced that settlements had been reached with Tampa-based WellCare Health Plans, Inc. over four lawsuits that alleged violations of the federal False Claims Act by whistleblowers.

Note that it says alleged. The latest deal keeps WellCare from admitting guilt in any way, shape or form as a result of these lawsuit settlements.

“This settlement should serve as notice to those defrauding state and federal healthcare programs that, in addition to appropriate criminal prosecutions, we will utilize civil suits to root out their conduct and recover their ill-gotten gains,” said O’Neill.

Those lawsuits alleged – there it is again – that WellCare “engaged in a number of schemes to submit false claims to Medicare and various Medicaid programs.” The government says that WellCare …

1. falsely inflated the amount it claimed to be spending on medical care in order to avoid returning money to Medicaid and other programs in various states including Florida Medicaid and Florida Healthy Kids (Florida’s CHIP program)
2. knowingly retained overpayments it had received from Florida Medicaid for infant care
3. falsified data that misrepresented the medical conditions of patients and the treatments they received
4. engaged in certain marketing abuses, including the “cherrypicking” of healthy patients in order to avoid future costs
5. manipulated “grades of service” or other performance metrics regarding its call center
6. operated a sham Special Investigations Unit

WellCare settled a class-action suit back in 2010

For all of that “alleged” corporate malfeasance, WellCare has agreed to pony up a total of $137.5 million to the United States government and nine states (Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York, and Ohio).

This is actually a bad deal for taxpayers because it is estimated that WellCare’s alleged fraudulent billing topped $500 million, according to a former employee.

Instead of a lump sum, WellCare will pay off the $137.5 million in installments – plus interest – over a three year period. And guess what? The four whistleblowers will get a huge chunk of that. Former WellCare employee Sean Hellein will get more than $20 million, while the other three will split $4 million and change.

“The monies recovered in restitution and from this settlement agreement will go to the federal and state programs which suffered these losses, while the forfeited funds will go to law enforcement to help fund future investigations,” said O’Neill.

“In an era of decreasing federal and state budgets, and increasing healthcare costs, we must pursue all available civil remedies to recover losses suffered by government healthcare programs,” he said.

Additionally, if WellCare is sold or controlling interest in the company changes hands before they finish paying off the settlement, another $35 million penalty payment will have to be made by the company with some of that going to the whistleblowers as well.

The release also points out that this isn’t WellCare’s first slap on the wrist by the government. On May 5, 2009, WellCare paid out $80 million to head off potential criminal charges for “allegedly” ripping off the Florida Medicaid and Healthy Kids programs.

But the problems at WellCare went much deeper than that. They were systemic, actually.

Five former executives – including the CEO, CFO and general counsel – were indicted in March 2011 for their crooked ways. All are expected to be tried in court early next year. And former analyst Gregory West pleaded guilty to a conspiracy charge and is currently awaiting sentencing.

Apparently, the feds feel like WellCare can’t be trusted (and who can blame them). The troubled health-care firm is on the equivalent of corporate probation for five years, under the watchful eye of the Inspector General‘s office.

By: Mark Christopher/Sunshine Slate

WellCare

[Tallahassee, FL] In a pair of rulings that could have far-reaching implications, last Wednesday the Florida Supreme Court rejected key parts of nursing home lawsuit limits agreements that would have limited legal damages against nursing homes.

The rulings dealt with a common practice of nursing home operators asking incoming residents or their families to sign agreements that call for using arbitration – instead of going before judges and juries – to resolve legal disputes about such things as injuries.

But in cases from Hillsborough and Polk counties, a five-member majority of the Supreme Court rejected parts of the agreements that sought to limit the ability of residents to seek punitive damages or to limit pain-and-suffering damages.

“(These) limitation of liability provisions, which place a $250,000 cap on non-economic damages and waive punitive damages, violate the public policy of the State of Florida and are unenforceable,” the majority wrote in the Hillsborough case, which was filed on behalf of resident Angela Gessa against Manor Care of Florida, Inc.

But Justice Ricky Polston, joined by Chief Justice Charles Canady, wrote a stinging dissent in the Gessa case. Polston wrote that Florida law allows people to waive their legal rights, such as by signing arbitration agreements.

“The Florida Legislature, not this court, should decide Florida’s public policy,” Polston wrote.

Arbitration agreements have been a controversial issue in the nursing home industry in recent years. Nursing homes argue the agreements can hold down legal costs at a time they are struggling with cuts in Medicaid and Medicare payments; attorneys for injured residents argue the agreements take away legal rights.

That has led to a spate of lawsuits throughout the state about whether arbitration agreements are valid.

Kristen Knapp, a spokeswoman for the Florida Health Care Association, which represents the nursing home industry, said her group supports the use of arbitration agreements and has worked to make sure they are understandable for residents and their families.

But Tampa attorney Jim Wilkes, who argued the Supreme Court cases on behalf of the residents, said people are asked to sign the agreements with little knowledge of what they include. He likened it to “giving somebody divorce papers and saying, ‘Here, fill these out.’ ”

Jim Wilkes - Fighting against nursing home lawsuit limits

Attorney Jim Wilkes

Wilkes, who has gained national prominence for representing nursing-home residents, praised the court rulings.

“If I sound happy, it’s because the court did such a beautiful job of writing reasoned opinions,” he said.

Justice James E.C. Perry wrote the majority opinions in Wednesday’s rulings, which overturned decisions by the 2nd District Court of Appeal. Other members of the majority were Justices R. Fred Lewis, Peggy Quince, Jorge Labarga and Barbara Pariente.

Pariente did not sign onto Perry’s opinion in the Polk County case, which was filed on behalf of the estate of Edward Henry Clark against several defendants, including Tandem Health Care. She concurred without explanation in that case.

The rulings do not eliminate the possibility of nursing home lawsuit limits agreements. But they restrict the way they such agreements can be used.

For example, the majority said judges – and not arbitrators – should decide whether arbitration agreements are valid and do not violate “public policy” spelled out in state laws. Also, the majority ruled that arbitration agreements couldn’t remain in effect simply by eliminating, or “severing,” parts that are found to violate public policy.

In both cases, the nursing homes argued that the residents or their family members freely entered into the arbitration agreements, which they said offer advantages such as resolving cases more quickly.

“Gessa voluntarily entered into the arbitration agreement, and its execution was not a condition of her receiving the home’s services,” Manor Care argued in one brief. “The fundamental right to contract, including the right to waive personal rights to damages, permits an individual such as Gessa to contract for speedy arbitration, with the arbitrator’s fees and costs paid by Manor Care and certain limitations on monetary damages.”

But Paul Jess, general counsel for the trial-lawyers group Florida Justice Association, said Wednesday that nursing home lawsuit limits have “pretty much tested the limit in what kind of onerous and unconscionable limits” they can place in arbitration agreements.

“These kinds of provisions are really over the top,” Jess said.

By: Jim Saunders/The News Service of Florida

Images: Jim Wilkes, Florida Supreme Court (By: Tim Ross)

Nursing Home Lawsuit Limits

[Miami, FL] For far too long, pill mills operated in Florida with almost no concern for being caught. Millions were made prescribing, supplying and ultimately peddling the illegal prescription narcotics to dealer networks that distributed the pills all across the United States.

The most recent case of out The U.S. Attorney’s Office for the Southern District is an example of what has been going on in the state, a microcosm of the mega-problem plaguing Florida.

It is alleged that starting as early as 2007, a pair of Miami-Dade and Broward Counties pain clinic operators Gerardo Gomez, Juan De Dios Gomez, and Danay C. Manso ran a well-established scam to supply oxycodone and oxymorphone to patients who didn’t have a medical need for the pills.

Instead of using them for fighting pain as intended, they were selling them on the black market. And this was going on under the supervision of multiple doctors and cooperative pharmacies, and paid for on the public’s dime, via Medicare and other insurers.

In all, 24 defendants were named, including the three pain-clinic operators, Frank J. Ballesteros, M.D. (57, script-writing doctor out of Miami), Aiman Izzedin Aryan (40, a pharmacy owner out of Pinecrest), Emerson Carmona (40, a pharmacy owner from Miami), among others.

They have all been indicted on a variety of pill mill charges, including conspiracy to distribute oxycodone and oxymorphone, conspiracy to defraud Medicare, possession with intent to distribute controlled substances and attempted possession of controlled substances.

“According to recent estimates, Florida prescribes ten times more oxycodone pills than all other states combined,” U.S. Attorney Wifredo Ferrer stated. “Each day, individuals die from prescription drug overdoses. To stop this drug epidemic, we have previously charged clinic owners, operators, and doctors who deal drugs while hiding behind a medical license. Today, we have focused our efforts on those pharmacies who are churning out pills that are fraudulently prescribed at area pain clinics.”

Defendants Leroy Paige, Alyssa Lyn Paige, Cynthia Suzette Adderley, Victor D. Alexander, Aaron Lamar Allen, Henry Louis Conley, Jr., Hattie Mae Green, Petronella Smith Howard, Eric Fyke Miller and Annie Mims Simmons recruited the “patients.” They even drove these prescription-ready warm bodies to see the scam doctor and then the scam pharmacy.

Bobbie Lee Anderson, Denise Darcelle Dardy, Margaret Marie Elliott, Billy Joe McCoy, and Ronald Regains were the fake patients who sold the drugs to Gerardo Gomez, Juan De Dios Gomez, Danilo Falcon and Eliezer Salgado for distribution, so says the indictment.

According to researchers from the Centers for Disease Control and Prevention, painkillers like oxycodone cause more overdose deaths than heroin and cocaine – combined.

“Today’s multi-agency operation makes clear that drug trafficking and health care fraud make for a vile combination that simply cannot be tolerated,” said Christopher B. Dennis, Special Agent in Charge for the Department of Health & Human Services – Office of Inspector General (HHS-OIG) of the Miami-area region. “Schemes to steal from taxpayers to pay for highly addictive, highly profitable street drugs , as the government alleges in this case, will trigger investigation and prosecution.”

The indictment also seeks forfeiture of approximately $40,000,000 believed to be gained from the years-long pill mill scam.

If convicted, most defendants face 20 years in prison, while others are looking at up to 10 years of prison time.

“Operation Gotham,” as the the Organized Crime Drug Enforcement Task Force (OCDETF) investigation was named, was a result of a partnership between federal, state and local law enforcement agencies. Involved were officials and agents from the Drug Enforcement Agency, the HHS-OIG, the IRS, the Miami-Dade Police Department, the Broward Sheriff’s Office and the Florida Department of Health.

Assistant U.S. Attorney Dwayne E. Williams is prosecuting the case.

By: Mark Christopher/Sunshine Slate

[Miami, FL] It would appear that the U.S. Government is cracking down on Medicare fraud in a big way, as evidenced by the slew of indictments, convictions and sentences coming out of a federal courtroom in Miami.

In just twelve short days, the United States Attorney’s Office for the Southern District of Florida has press-released four closed, ongoing or recently opened cases involving Medicare fraud totaling hundreds of millions of dollars.

The aggressive action is welcome – the federal government’s Medicare program has long been a target of unscrupulous individuals looking to file false claims and systematically steal from the taxpayers for personal gain.

Here are the U.S. Attorney’s actions so far this month:

August 2

Nelson Fernandez, 42, a Miami-area resident, pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.

The two separate fraud schemes that resulted in the submission of more than $200 million in fraudulent claims to Medicare. Sentencing for Fernandez is scheduled for Jan. 17, 2012. Fernandez faces a maximum penalty of 15 years in prison and a $250,000 fine.

Lawrence Duran, Marianella Valera and Margarita Acevedo have also pleaded guilty for their roles in the scheme. They are scheduled to be sentenced in September. The trial against Judith Negron, is scheduled to begin next week.

The indictment charging Fernandez also charges 17 other individuals for their roles in the fraud scheme. Co-defendants Dr. Alan Gumer, Joseph Valdes, James Edwards and Adrianna Mejia have all pleaded guilty for their roles in the scheme. Trial against the remaining 13 co-defendants is scheduled to begin in November.

August 4

Gilbert Sanabria, Jr., of Hollywood has been arrested and indicted on charges of conspiracy to commit health care fraud, conspiracy to commit bribery and bribery. Sanabria, Jr., operated a Broward corporation that  sold and/or brokered the sale of medical clinics to others, who would in turn submit false claims to Medicare.

These clinics subsequently submitted approximately $27,991,634 in false claims to Medicare, of which Medicare paid approximately $9,536,298.

The false claims were for durable medical equipment including varicose vein treatments, pain management services and physical therapy.

The purchasers of these clinics had previously pled guilty to charges including conspiracy to commit health care fraud, health care fraud, money laundering, and aggravated identity theft and are currently serving sentences ranging 37 months to 235 months.

In addition, Sanabria, Jr., allegedly provided cash and valuables to a Medicare contractor employee in exchange for expedited approvals for Medicare enrollment applications and other paperwork for the fraudulent clinics. That employee has been charged with conspiracy to receive bribes.

August 8

Chief U.S. District Judge Federico Moreno sentenced Armando Santos, 46, of Miami to the maximum of 10 years imprisonment for conspiracy to commit health care fraud, four counts of health care fraud and making false statements.

Santos was a home care nurse servicing homebound, diabetic and insulin dependent Medicare patients. Santos falsified documents claiming that he injected beneficiaries with insulin when the evidence produced in court proved otherwise, as well as treating two patients at one time at different locations.

Those false reports resulted in the submission of $230,315 in false claims to Medicare.

The owners of the home-care company, Elizabeth Acosta Sanz and Luis Alejandro Sanz, both of Miami, were recently arrested and charged with conspiracy to commit health care fraud, health care fraud, conspiracy to pay kickbacks, the payment of kickbacks, conspiracy to commit money laundering, and money laundering.

The husband and wife team submitted fraudulent claims and paid kickbacks to recruiters and others. The pair also instructed nurses to falsify patient medical records. Many of those services were unnecessary or had not been provided.

The Sanzes submitted approximately $11,340,342 in false claims to Medicare, of which Medicare paid $7,317,879.

August 10

A federal grand jury in Miami indicted Elizabet Lombera, 39, of Miami Lakes on multiple counts of health care fraud for submitting bogus claims to Medicare. Five companies that she ran submitted approximately $27,383,328 in fraudulent claims to Medicare and received $12,438,952 in reimbursements.

If convicted, Lombera faces a possible maximum of 10 years in prison for the conspiracy and fraud counts and two-year mandatory minimum for identity theft.

Six of Lombera’s co-conspirators have already been sentenced for their roles in the crime. Four other individuals have been charged for their roles in laundering the proceeds of the health care fraud and are awaiting trial.

By: Mark Christopher/Sunshine Slate

Resources: 110810-01, 110808-01, 110804-01, 110802-03

This week, Gov. Rick Scott signed House Bill 7095 saying that the new law “will crack down on illegal prescription drug abuse in Florida.” He also hopes it will be a “model for the nation,” as it increases penalties for those who overprescribe Oxycodone and requires that distribution of certain pills be tracked.

In addition, law enforcement and state prosecutors will now have an additional resources – $3 million – to combat Florida’s earned reputation as the “Pill Mill Capital” (Scott’s words) and the burgeoning illegal prescription drug market known as the “Oxy Express” (also Scott’s words).

The bill bans most doctors from dispensing these controlled drugs (except under specific circumstances), requiring them to be distributed through pharmacies. It also triggers a mandatory buyback program so that doctors have to return their pill stashes back to distributors.

In his weekly radio address, Scott pointed to an alarming statistic: seven people a day die of drug overdoses, although he didn’t say how many of those deaths were due to prescription, and how many were as a result of street drugs.

The governor also said that we’re number one. Number one in the nation when it comes to the number of Oxycodone dispensaries, that is (try fitting that on a cake). And of the 100 biggest dispensers in the nation, Florida is home to 98 of them. Probably won’t find those fun statistics on the state’s VISIT FLORIDA tourism-booster website.

This overly-free market of pharmaceuticals fuels underground criminal activity. Scott acknowledged this in March when he formed, with the help of Attorney General Pam Bondi and law enforcement, the Statewide Drug Strike Force to “begin turning the tide against criminal drug trafficking in our state.”

No bones about it, the illegal prescription drug trade is a huge problem in Florida. It was such a big problem that a pro-business governor and the small government state legislature was forced to act, even against all inclinations to keep their hands off the industry, per the Republican Party line.

It was a, ahem, bitter pill for them to swallow, for sure.

The governor looks great on his radio address

The Governor’s Medical Records

The governor, himself a former medical-industry mega-player as the one of the founders of of Columbia Hospital Corporation, which later merged into health giant Columbia/HCA to become the biggest private for-profit in the industry. Scott was acting CEO when the company was fined a record 600 million and received 14 felonies for systematically committing Medicare fraud and engaging in dubious business practices.

Scott was also a former major investor in the Solantic health-services chain. He divested from the company earlier this year – pocketing $60 million for his troubles (to be fair, he actually lost a couple of million on the deal) – in an attempt to get rid of any challenges to pending legislation under the grounds of Scott having a conflict of interest in the matter.

The bill mandating drug testing of welfare cash recipients, recently signed into law by Scott, would have certainly drawn sharp criticism as Solantic performs drug screens. And in the case of the Pill Mill Bill, Scott’s possible dual role as both owner and regulator of Solantic would have been seen as the proverbial fox watching the hen house.

Even though he could have argued his case, it was politically wise for Scott to sell his substantial stake in the company.

Bondi Watches Scott Sign Pill Mill Bill

Little Help From His Friends

“… The pill mill legislation I signed this week will save lives,” proudly proclaimed Scott in his weekly radio address, available as a YouTube video here and as a downloadable mp3 here.

Sure, he signed it by himself and he wants the credit for saving lives, but it wasn’t a one-man show. There were the little people who helped along the way. His supporting cast included Bondi, legislative leaders (yes, he was that general) and law enforcement officials.

They’ve come up with, in Scott’s words, ” a comprehensive plan to tackle this issue at the source, and reverse the growing trend of illegal pill mills operating in Florida.”

- Mark Christopher