Thursday, October 23, 2008

former Minnesota Department of Health and Human Services (DHS) employee ...FRAUD

Aug. 5, 2003, through Sept. 10, 2008, ...$903,896.54 from the State of Minnesota through Medicaid health care fraud.
Hudsonite indicted for health care fraud in Minnesota
Hudson Star-Observer
Published Wednesday, October 22, 2008

A former Minnesota Department of Health and Human Services (DHS) employee was recently indicted by a federal grand jury for health care fraud and for the alleged theft of more than $900,000 in Medicaid funds.

Kim Joann Austen, 47, Hudson was charged Oct. 7 in Minneapolis with one count of health care fraud and 22 counts of theft of health care funds. Her indictment was unsealed Wednesday following her initial appearance in Minneapolis.

Austen turned herself in to authorities Tuesday. Austen remains in custody, and a detention hearing is scheduled for 4:30 p.m. Thursday at the United States Courthouse in Minneapolis.

Austen's indictment alleges that from Aug. 5, 2003, through Sept. 10, 2008, she knowingly and willfully executed a scheme to defraud Medicaid, a federal health care benefit program. It also alleges that Austen used her position to receive $903,896.54 from the State of Minnesota through Medicaid.

Austen had been a state employee since 1981, and had worked in several positions within the DHS since that time. Since approximately August 1997, Austen had been the supervisor of the Medicaid Management Information System (MMIS). The MMIS is a computerized system that processes submitted Medicaid claims for payment.

For more information see the Oct. 30 edition of the Star-Observer.

Wednesday, October 22, 2008

A federal judge today sentenced a Detroit doctor to more than 16 years in prison for health care fraud and pay more than $1.1 million in restitution

A federal judge today sentenced a Detroit doctor to more than 16 years in prison for health care fraud, saying crimes like his are making health insurance unaffordable and threatening the viability of major employers such as the automotive industry.

“I like to find some good in somebody when I sentence them and I find no good in you,” U.S. District Judge Marianne O. Battani told Dr. Zack Brown as she sentenced him to 200 months in prison.

Brown, 61, who was also ordered to pay more than $1.1 million in restitution, was convicted in May of 80 counts of conspiracy, health care fraud and mail fraud for a scheme in which he recruited phony patients to bilk Blue Cross Blue Shield of Michigan, as well as Medicare.


Tuesday, October 21, 2008


"Martin Act was used by the Attorney General with great success in prosecutions of fraud by investment banks, mutual funds and insurance companies. Those efforts led to the recovery of more than $6 billion for investors, businesses and the government. "


New Legislation Would Improve Prosecutors’ Ability to Fight Fraud
Attorney General Spitzer today proposed new Medicaid fraud legislation modeled after the statute he used to bring far-reaching reform to the financial industry.

Spitzer’s proposal, dubbed the "Martin Act for Health Care," removes limitations that hamper prosecution of health care fraud.

"New York State has been a national leader in the recovery of fraudulently obtained Medicaid funds," Spitzer said. "We could do even better if we strengthened the ability of prosecutors to prosecute obvious crimes."

In today’s health care delivery system, approaches to cheating the system by committing fraud have surpassed the dated definitions of larceny. This proposal overcomes the hypertechnical obstacles imposed by current law, and would allow prosecutors to bring cases against Medicaid providers who steal money through half-truths, omissions and deceptions.

The proposal would also help speed investigations and recoveries by providing new investigative tools for law enforcement authorities. For example, one key provision would allow the Attorney General to conduct examinations of Medicaid providers under oath and use the providers’ answers in civil recovery actions.

The Martin Act was used by the Attorney General with great success in prosecutions of fraud by investment banks, mutual funds and insurance companies. Those efforts led to the recovery of more than $6 billion for investors, businesses and the government.
Without Martin Act powers, New York still led the nation in Medicaid fraud recoveries, with $219 million recovered last year. With such powers, the Attorney General believes recoveries would increase significantly.

Spitzer previously introduced several bills aimed at improving Medicaid fraud recoveries and deterring fraud. One would provide financial incentives to those who report incidents of fraud and protects whistle blowers. Another would stiffen penalties for health care-related fraud.

The Attorney General maintains a toll-free tip-line for aid in his fight against Medicaid fraud. To report incidents of fraud or nursing home abuse contact: 866-NYS-FIGHT or (866-697-3444).

Wednesday, October 8, 2008

'Going door to door to sniff out fraud' We must!

Rampant Medicare fraud suspected in Miami
Miami may be ground zero,however this has been going on for years!

By Julie Appleby, USA TODAY
Home health care costs charged to Medicare in the Miami area have risen 20 times the national average in the past five years, prompting a federal investigation of suspected fraudulent billing.
Miami-Dade County is on track to cost Medicare a projected $1.3 billion for home health care services this fiscal year, up 1,300% in just five years, government data show.

SLEUTHS: Going door to door to sniff out fraud
Investigators suspect that fraud is helping to drive the increase because the population of Medicare beneficiaries in the county grew only 10.2% between 2004 and 2007, the latest government data show.

"You definitely have a problem down here," says Randall Culp, an FBI supervisory special agent who oversees a team that works with a Medicare Fraud Strike Force in Miami.

In South Florida, investigators say, some agencies are billing Medicare for millions of dollars in services that are unnecessary, overused or not provided at all.

Investigators elsewhere are paying attention because South Florida is a bellwether for scams that later surface in other large cities, such as Los Angeles and Houston. Scams involving fake AIDS treatments, for example, popped up in Detroit and several other cities after a crackdown in Miami, Culp and others say.

"Typically, Miami is ground zero. Then we see it move to the other high-fraud areas," says Suzanne Bradley, an investigator with the Centers for Medicare and Medicaid Service's field office in Miami.

Home health agencies send nurses and aides to assist homebound elderly and disabled beneficiaries. Nationally, Medicare expects to spend $16.5 billion on home health care this year, up 65% from five years ago.

Medicare spent six times more on home health care services in Miami-Dade County during the first five months of this year than in Los Angeles County, where the Medicare population is three times larger, agency data show.

"It jumps off the page as out of proportion," says Kirk Ogrosky, deputy chief in the Criminal Division's Fraud Section of the Justice Department.

Today, acting Medicare chief Kerry Weems says he will announce new anti-fraud efforts, some targeted at home care agencies in Miami.

"It does affect everyone because everyone is paying into Medicare," says Peggy Sposato, a nurse investigator with the U.S. attorney in the Southern District of Florida, who combs through data looking for unusual billings.

Saturday, October 4, 2008

The Bankruptcy Code Today...

The Bankruptcy Code Today
The present Bankruptcy Code, which became law in 1978, combines three previous reorganization chapters into one, Chapter 11. Chapter 11 is designed to be a flexible tool for the reorganization of the business and debts of corporations, partnerships and individuals. The goals of the reorganization process are many: to maintain the going concern value of the enterprise; to protect workers, their jobs and their retirement benefits; to realize greater value for creditors than a straight liquidation of assets would make possible; to avoid the ripple effects of a failed enterprise. In exchange for opening its books and records, a debtor obtains an automatic stay of any action to commence or continue civil litigation, or to collect an indebtedness, by any creditor in any court anywhere in the United States. Upon the filing of a petition, the previous entity or person becomes a new legal entity, called the debtor in possession, which is charged with fiduciary responsibility for the proper administration of the case for the benefit of creditors and equity holders. A trustee is appointed in a Chapter 11 case only if the debtor in possession is found to have engaged in fraudulent activities or gross mismanagement. The goal and purpose of the reorganization process is the filing of a plan of reorganization that will provide for the repayment of claims on a fair and equitable basis while at the same time permitting the debtor entity to continue its operations.

A reorganization plan must be accompanied by a disclosure statement that has been approved by the bankruptcy court as containing adequate information to enable a creditor to make an informed decision to vote to accept or reject the plan. As in the old composition agreements, confirmation of the plan requires that the majority in number but only two-thirds in amount of creditor claims in each impaired class must vote to accept it. If a debtor is unable to achieve the requisite number of votes to obtain acceptance of its plan by the acceptance method, it may ask the court to confirm the plan over the objections of creditors. The court must evaluate whether the plan is fair and equitable and does not discriminate unfairly with respect to each class of claims impaired under the plan. Upon confirmation of a reorganization plan, property of the estate vests in the reorganized debtor, and the plan becomes a new contract between the debtor and its creditors.

Chapter 11 reorganization has come to be seen as the vehicle of choice for addressing mass tort claims. Cases have been filed, for example, by manufacturers of asbestos-containing building materials, Agent Orange, and the Dalkon Shield birth control device. The focus of these cases was the development of a process that would permit all interested parties, including victims, lenders, debtors and shareholders, to come together to develop an equitable method of compensating victims while permitting the debtor to continue in operation. The formation of various official committees, each with its own advisers, facilitates the process.

Chapter 11 and the U.S. Catholic Church
These are the principles that have led to the filing of the diocesan reorganization cases. In each case, the bishops have cited the need for a process that permits equitable and compassionate treatment of victims while permitting the diocese to return to its role as a church. From its first pages, the disclosure statement in the Tucson case emphasizes that the purpose of the filing was to “fairly, justly, and equitably compensate the victims of sexual abuse by clergy or others associated with the Diocese and bring healing to victims, parishioners and others affected by the past acts of sexual abuse committed by clergy and others while allowing the Diocese to continue its ministry and mission.” The proposed plan provides for the creation of two trusts to be funded by settlements from insurers and the liquidation of certain diocesan assets, exclusive of parish and school property. Trustees for each of these trusts are to be given responsibility for resolving all pre-petition tort claims, investing and managing settlement funds, and making payments to holders of allowed claims.

One issue that has received much attention in these cases is whether the assets of the parishes are assets of the bankruptcy estates. While it does not define property rights, the Bankruptcy Code does prescribe which assets become property of the bankruptcy estate upon the filing of a petition for relief. Property of the estate is very broadly defined to include “all legal and equitable interests of the debtor in property as of the commencement of the case.” There are certain exceptions to this broad definition. Property of the estate does not include property in which the debtor holds, as of the commencement of the case, only legal title and not an equitable interest. Pursuant to canon law, all clerics and lay persons who take part in the administration of ecclesiastical goods are bound to fulfill their functions in the name of the church according to the norms of law. But the Code of Canon Law does not specify how title to the temporal goods of the church is to be held, and the practice varies from state to state.

It has been argued that pursuant to canon law, the bishop’s interest in parish assets is a bare legal title and that parish assets are therefore not property of a diocese’s bankruptcy estate. This is far from clear, however, and trial and appeal of this issue could take years. But through the plan negotiation process, it may be possible for interested parties to agree upon an adequate amount to fund a plan in lieu of liquidating parish assets. Victims and parishes, through their representatives, may fully participate in the plan negotiation process.

Other questions have arisen about the role of the bankruptcy judge in supervising diocesan activities and the administration of diocesan assets, and whether this would impermissibly interfere with the free exercise of religion. In point of fact, the bankruptcy judge has no responsibility for case administration under the present Bankruptcy Code. That role is placed upon the trustee. While it is possible under the Bankruptcy Code for a judge to appoint an operating trustee for a nonprofit debtor in the event of gross mismanagement or fraud, it is more likely that a judge would first address specific creditor concerns through the appointment of an examiner. An examiner may be a lawyer or an accountant, but need not be, and is charged with investigating allegations concerning fraud, dishonesty, incompetence, misconduct, mismanagement or irregularities in the management of the affairs of the debtor, and with making a report of his findings to the court and other interested parties. If the report of the examiner reveals the need for the appointment of a trustee, a person is elected to serve as trustee by non-insider creditors holding allowable, undisputed, fixed and liquidated unsecured claims.

In a Chapter 11 case, however, there ordinarily is no trustee. Rather, the debtor in possession is clothed with the rights, duties and powers of a case trustee. So long as a diocese remains in possession of its property, the bishop of that diocese, together with his consultors, will continue to make decisions concerning the operation of the diocese. While a debtor may not use, sell or lease property outside the ordinary course of its business without the approval of the bankruptcy court, this approval is routinely given where there are no objections to the proposed action by affected parties. Whether in connection with obtaining confirmation of a plan or during the administrative phase of a case, the role of the bankruptcy judge is limited to deciding whether a proposed action does or does not meet the requirements of the Bankruptcy Code. In deciding that question, the judge generally has no power to compel an alternative action.

Bankruptcy law is certainly not the solution for all problems, and I am not urging a rush to the bankruptcy courts. But more Catholics need to become familiar with the reorganization process and value it for the creative solution it can provide for some very difficult problems now being faced by the church in the United States.

Jennie D. Latta is a United States bankruptcy judge for the Western District of Tennessee.

Link NCFE to Financial and Healthcare FRAUD!

All you have to do is go to the trial currently in Colimbus Ohio, NCFE>
You can verify the link between the financial and healtcare industries.

No doubt one of the leading issues in this election is the question of health care coverage. For working Americans apart from losing their job there is no greater fear than inability to pay for their health care costs. Each year the number of working Americans who are uninsured gets closer to 50% and even for those that have some form of coverage it is often inadequate to their needs. The Democratic and Republican Plans are significantly different in their ways to address this issue. Which is better prescription for America?

First lets clarify what are the current problems?

Note enough people are currently covered by any plan.Any solution has to significantly include basically the whole of the population. We can longer have a system of “charity’ that assumes that providers and hospitals will donate to the needy. This system assumes the old concept of ability of pay based upon an individuals income is still in place. By definition for it to work requires that those who can pay more will pay higher prices to subsidize the care of the uninsured or under insured. This has created a disaster in health care because it makes it impossible to know what are the real prices in health care. How did it ever occur that private payers, Medicare, and health insurance can pay very different fees to the same provider for the same service. Most of the people who have health insurance are over the age of forty. The system will always be under capitalized unless the vast majority of young workers begin paying into system which is the major problem with a program that leaves too many not participating. For this reason the concept that Hillary Clinton recommended of “pay or play” is a sound construct.

Coverage varies widely too much between plans. Consumers cannot compare pricing of insurance plans because there is no real standard for what the term ‘insurance’ means. The reality is that none of us can ever be correct about what predicting our future medical expenses will be. Opting for a ‘cheap’ high deductible plan even for a healthy 20 year old can be a nightmare if out of the blue he or she is suddenly involved in a major automobile accident or delivers a premature baby. To call something a legal medical insurance plan means that it has to cover major conditions reasonably well within the income of the individual covered. Who is going to oversee this to prevent another crisis similar to the subprime loan fiasco?

Making health insurance job based limits the consumers options for alternatives and creates problems when there is a change in the job status.
The current system of job based insurance began during World War II as a simple way to give the public coverage who mostly worked in large war related industries. It did not envision that a majority of Americans would be working for small business or that adults may change jobs seventeen times or more in a lifetime. Labor unions played a great role in advocating the need for health care of their workers and often health care benefits become the key point of corporate-labor negotiations. But now it plays too much of role in the fight of whether labor should be unionized or not. The American auto industry has been rendered severely non-competitive by high health care costs which would be lower if they were shared in a larger risk pool than just one company or industry. McCain is right in not making health insurance job based.

The economy is weak and there is limited funds for health care. Every year our society gets older and our medical technology gets more expensive. Although health care is a necessity for a civilized nation it is not an industry that really improves the overall production of wealth. We can only expend so much of our overall budget as a nation on health care. Expense or overpriced treatments that are not proven to be clearly of value cannot be afforded. We have to mandate more complete coverage for proven effective treatment of conditions which are life threatening and minimize or exclude coverage of unproven treatment of conditions which are unlikely to benefit from such treatment. While many people cannot get enough coverage for the treatment of cancer, billions of dollars are wasted every year in operations and treatment of chronic pain conditions that are likely of no real benefit. However, one cannot be an advocate for health care without understanding that the most important single factor in determing whether health care is affordable is the health of the economy.

There are conflicting reports from recognized “think-tanks” about which plan would be best.

To evaluate the candidates’ proposals, the Commonwealth Fund Commission identified “several key principles for moving the health system toward high performance. They include:provision of equitable and comprehensive insurance for all;provision of benefits that cover essential services with appropriate financial protection;premiums, deductibles, and out-of-pocket costs are affordable relative to family income;health risks are broadly pooled;the proposals should be simple to administer, with coverage that is automatic and continuous;dislocation should be kept to a minimum—people could choose to keep the coverage they have; and financing should be adequate, fair, and shared across stakeholders.” Measured against these broad principles,they continue, Obama’s proposal for mixed private–public group insurance with a shared responsibility for financing has” greater potential to move the health care system toward high performance than does McCain’s proposal to encourage individual market coverage through the use of tax incentives and deregulation. Compared with McCain’s approach, Obama’s approach could provide more people with affordable health insurance that covers essential services, achieve greater equity in access to care, realize efficiencies and cost savings in the provision of coverage and delivery of care, and redirect incentives to improve quality. In the absence of a requirement that everyone has affordable coverage, however, the proposal is likely to fall short of achieving universal coverage.”

Robert E. Moffit, Ph.D., is Director of the Center for Health Policy Studies at The Heritage Foundation says the Obama Plan is “Not the Right Prescription”. He states “Proponents of government competition in a “national health insurance exchange” claim that it would enhance personal choice and health plan competition. That is highly unlikely. Rather, such a system would impose federal control over virtually every aspect of private health insurance, rendering it virtually indistinguishable from government insurance except for its direct financing. Congress would become increasingly prescriptive over benefits, the adoption of medical technology and new medical procedures, the pricing of these items, and the mechanism that plans may or may not use to manage health care risks. In other words, hardly any aspect of private health plans’ business operations would be free from government regulation and control. That is not a prescription for health care choice or competition.”

In my opinion, there is good and bad in both the McCain and Obama plans. Unfortunately, neither plan really addresses the most important issue of determining how much money will be paid for what. The medical system as it is currently structured is filled with waste and maybe some fraud. The Wall Street financial crisis may be a mouse compared to the elephant of the health care industry. Many health care insurance CEOs are actually even better paid that Wall Street executives. These days the most expensive car in the “doctor’s parking lot” does not belong to the heart surgeon but usually the hospital administrator. Even if you believe that physicians are over paid, many studies have shown that given the number of years of training and hours worked they are not, there is no doubt that nurses are severely underpaid. Yet some of the fastest growing salaries in America are those of health care executives at every level which more often than not have nothing to do with performance. Physicians must be allowed to develop appropriate standards of what care should be covered in the same manner that has resulted in the Veteran’s Hospitals going from once being thought of as substandard to now being leaders in the care of chronic conditions such as diabetes.

At the same time I agree with Dr. Moffit that making the government a competitor against insurance companies will serve no purpose.The biggest obstacle to private health care is the fact that it is appropriately a right. Mandated services to the public such as fire departments, schools, and garbage disposal must be highly regulated and overseen if they provided privately. For these types of services there is a very real issue as to whether competition is necessary or functional. Health care by definition cannot really be a “profitable” venture because it does not produce wealth it is a social good. Fostering competition in the American health care community has resulted in too many hospitals being too close together with many redundant services. Does it make sense for every doctor’s office to have its own office equipment, waiting room, and billing staff which add significantly to their overheads. False notions about competition make it very difficult for doctors to deal with insurance companies because of anti- trust laws.These types of administrative costs add trillions to the overall cost of health care and tend to make hospitals general centers of overall care but limit the possibility of creating real regional center of expertise.

Finally as Sarah Palin said in the recent Vice-Presidential debate, there is the issue of personal responsibility. As a retired physician who has practiced not only in the United States but visited in other countries I have seen that Americans are unique in demanding often unnecessary services. Injured workers go to court to ask for thousands of dollars for massage treatments that no one really feels will be of any benefit. Many chronic conditions are treated with drugs and therapy treatments which are no more effective than placebos. Obesity, smoking, alcohol abuse, and reckless behavior are more than just a drop in the bucket of overall health expenditures. Americans have to think of themselves as being members of a large extended family with only one budget that needs to be used for the good of us all and not the gluttony of one.

Go To Contempo Magazine Home Page

More Fraud Charges in Southern Florida...

U.S. Attorney's Office Announces More Fraud Charges in Southern Florida
On September 30, 2008, the U.S. Attorney's Office in the Southern District of Florida issued a Press Release announcing health care fraud charges against 41 defendants and involving more than $160 million in Medicare claims.

As part of the Press Release, the U.S. Attorney's Office also made a fiscal year comparison of the total number of health care fraud cases prosecuted by the office during fiscal years 2006, 2007 and 2008. The fiscal year comparison shows a steady increase in the number of health care fraud prosecutions (from 111 defendants in 2006 to 245 defendants in 2008). According to the Press Release, the increase in the number of health care fraud prosecutions in the Southern District of Florida is the direct result of the efforts of the South Florida Health Care Fraud Strike Force prosecutors and other Assistant U.S. Attorneys, and Federal law enforcement agencies, led by the Federal Bureau of Investigation and the Department of Health and Human Services' Office of Inspector General.

In May 2007, the Department of Justice and Department of Health and Human Services (HHS) announced in a News Release that the Medicare fraud strike force began operations in March 2007 and had already resulted in 38 arrests and indictments involving over $142 million in Medicare billings. At the time of the announcement, HHS revealed that the strike force used "real-time analysis of billing data" to identify and react to fraud schemes. Since May 2007, strike force efforts have yielded a steady stream of arrests and indictments.

Posted by Michael Apolskis on October 03, 2008 in Fraud & Abuse | Permalink
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Wednesday, October 1, 2008

44-year-old Perry Belcher, A Shelby County man who peddled home health care products

Associated Press - September 30, 2008 11:45 AM ET

MEMPHIS, Tenn. (AP) - A Shelby County man who peddled home health care products over the Internet has pleaded guilty to computer fraud.

The Commercial Appeal reported 44-year-old Perry Belcher drew a 10-year suspended sentence in state criminal court Monday and agreed to give up cash, vehicles and other property valued at more than $1 million. He must also shut down his Internet sites for outfits called Selmedica and Increase Media and several related enterprises.

Belcher was accused of using bogus scientific research and fake testimonials to sell products for treating a wide range of medical disabilities. Prosecutors say he claimed his remedies had special powers when he was actually selling products commonly found in drugstores and supermarkets.

Information from: The Commercial Appeal,

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Florida,Massachusetts, Michigan, Minnesota Medicaid program ,

Four states, federal government share $9.9 million Medicaid fraud settlement
DEERFIELD, Ill. (Legal Newsline)-Florida, Massachusetts, Minnesota and Michigan will be receiving money from Walgreen Co., an Illinois-based pharmacy chain, as part of a $9.9 million Medicaid fraud settlement.

Florida Attorney General Bill McCollum announced today his state will be receiving more than $1.5 million from the Deerfield, Ill.-based company, while Massachusetts Attorney General Martha Coakley said the Bay State would be getting more than $3.5 million.
Michigan, Minnesota and the federal government will be receiving a total of $4.9 million.
"This substantial recovery of funds will help ensure the continued availability of Medicaid funds which provide basic health care products and services for those who need it most," said McCollum, a Republican.

The settlement is a result of an investigation that found the pharmacy chain had received excessive Medicaid payments for prescription drugs given to people who had both Medicaid and private third-party insurance coverage. The billing improprieties took place between January 1998 and December 2005.

The investigation arose from a whistle-blower lawsuit filed in April 2005 in the U.S. District Court in Minnesota. The whistleblowers will receive $1.4 million of the settlement.

"Pharmacies and other medical service providers that do business with the Massachusetts Medicaid program must understand and follow the law," said Coakley, a Democrat.

"This settlement demonstrates the ongoing commitment our office has made to identify and eliminate improper billing practices that drain desperately needed funds from the state's Medicaid budget," she added.

Florida will give $300,000 of its settlement money to the state's Medicaid program in recoveries and more than $220,000 will be given to the state general revenue fund.

Filed Under: State AGs