Federal Agencies Raise the Heat on Physicians Accused of Healthcare Fraud

By: Kathleen Quiroz and Meagan McKeown
Monday, August 4, 2014

Increased collaboration between states and federal government organizations is leading to more charges against physicians for their alleged participation in healthcare fraud.

The charges often stem from the work of the Medicare Fraud Strike Force, part of the Health Care Fraud Prevention and Enforcement Action Team (HEAT). HEAT is a coordinated effort to investigate and prevent Medicare fraud among states, the Centers for Medicare & Medicaid Services (CMS), and the enforcement departments at the HHS Office of the Inspector General (OIG) and the Department of Justice. Supported by new tools and funding under the Affordable Care Act, these groups are using new technology to identify patterns of fraud, investigations of which could result in heavier civil and criminal penalties than in the past.

Physicians are increasingly becoming targets of these investigations and enforcement actions. In May, 90 individuals, including 16 physicians, were charged with various types of Medicare fraud as part of a nationwide “takedown” by the Strike Force team. The individuals charged are accused of a variety of fraud-related offenses, including conspiracy to commit healthcare fraud, accepting kickbacks in exchange for referrals, filing false claims and money laundering.

In June, Chikezie Onyenso, a board-certified pediatrician and internist in New Jersey, was sentenced to 20 months in prison for violating the Anti-Kickback Statute. The physician solicited and accepted cash and rental payments in return for referring his patients for diagnostic testing. Onyenso is the sixteenth doctor to be convicted as a result of the government’s investigation of fraudulent activities at a New Jersey MRI center.

Texas Physicians among Those Charged

Among the individuals charged for healthcare fraud in May 2014 were five Houston physicians accused of conspiring to bill Medicare for home health services that were medically unnecessary. Court documents allege the physicians approved orders for unnecessary services that were often never provided. Another Houston physician has been charged with 37 counts of fraudulent billing for diagnostic testing at a sleep disorder center, as well as money laundering. If convicted, the physician could face 10 years in federal prison and a possible $250,000 fine for each count against him. A Corpus Christi physician recently plead guilty to mail fraud and fraudulent billing. He was sentenced to 37 months in prison followed by three years of supervised release, fined $10,000, and ordered to pay $370,638 in restitution.

Changes Under the Affordable Care Act

Numerous provisions of the Affordable Care Act enable the federal organizations responsible for monitoring, investigating and enforcing penalties for healthcare fraud to be more proactive in investigating fraud, rather than “paying-and-chasing” fraudulent claims. When an individual or entity is suspected of fraud, CMS now has the authority to suspend payments until an investigation is complete. The Act also provides $350 million over 10 years to fund anti-fraud efforts, expands recovery efforts for overpayment to healthcare providers, and institutes tougher sentencing guidelines and higher civil and monetary penalties for those found to have committed fraud. Defendants who were charged and sentenced in 2013 face an average of 52 months in prison.

Things to Know

You can violate the federal False Claims Act (FCA) without intending to commit a violation or without even knowing of the violation. Physicians can be held accountable for fraudulent claims if it can be shown they should have known fraud or other violations were being committed.

Under the federal Anti-Kickback Statute, accepting or offering cash or other remuneration to induce or reward referrals of federal government healthcare patients can result in civil and criminal penalties and prevent you from participating in certain federal healthcare programs.

A state statute makes it a crime to accept or offer any remuneration from or to another for securing or soliciting any patient or patronage for or from a person licensed, certified or registered by a state healthcare regulatory agency.

Otherwise legitimate claims can become subject to penalties if they are related to an improper healthcare relationship, such as a kickback arrangement or an arrangement that violates the Stark Law.

A healthcare fraud investigation is not something to take lightly. If you are contacted by the OIG about a potential investigation focused on your practice or another healthcare provider, you should speak with an experienced healthcare attorney before responding to any questions. An attorney can help you understand the questions being asked by the OIG, identify the facts that could be relevant to the investigation, and determine how you should best respond.


Kathleen Quiroz and Meagan Mc Keown

Kathleen Quiroz, partner and member of Strasburger & Price, LLP’s Health Law Practice Unit in San Antonio, and Meagan McKeown, intern, are co-authors of this article. Collectively, the Health Law Practice Unit has 67 years of experience representing corporate, healthcare and life sciences clients. You can reach Quiroz at 210-250-6148.