HEALTH CARE FRAUD INSTITUTE. Supplemental Materials

Transcription

1 HEALTH CARE FRAUD INSTITUTE Supplemental Materials

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19 United States v. Houser

20 GEORGE HOUSER Graduate of Harvard College and Harvard Law School Sentenced to 20 Years in Prison SHUT DOWN Moran Lake & Mount Berry - Involuntarily closed down by Medicare (CMS) and Georgia Medicaid June 2007 Residents were transferred out of the facilities in June and July 2007 Wildwood - Involuntarily closed down by Medicare (CMS) and Georgia Medicaid September 2007 Residents were transferred out of the facilities in September 2007

21 FAILURE OF CARE Potential Criminal Charges: HCF (18 USC 1347) 10 year max unless results in serious bodily injury (18 USC 1365) Mail Fraud (18 USC 1341) Wire Fraud (18 USC 1343) False Statements (18 USC 1001) False Claims (18 USC 287) FAILURE OF CARE GEORGE & RHONDA HOUSER Healthcare Fraud Conspiracy (18 USC 1349) Failure To Account For And Pay Over Payroll Taxes (26 USC 7202) Failure To File Individual Income Tax Return (26 USC 7203)

22 THEORY OF CASE Healthcare Fraud Conspiracy: Two Parts (1) Worthless Services: Houser submitted false or fraudulent claims to the Medicare and Georgia Medicaid programs for services that were worthless in that they were not provided or rendered, were deficient, inadequate, substandard, and did not promote the maintenance or enhancement of the quality of life of the residents of the Nursing Facilities, and were of a quality that failed to meet professionally recognized standards of health care INDICTMENT (2) Services Not Provided: Houser fraudulently caused more than $30 million in claims to be paid by Medicare and Georgia Medicaid for care and services that were either not rendered or were so inadequate or deficient as to constitute worthless services. Tax Fraud (a) Failure To File Personal Returns (b) Failure to Pay Employees' Payroll Taxes to IRS

23 INTENT HOUSER S KNOWLEDGE NO MISTAKE OR GOOD FAITH EVIDENCE / WITNESSES POSSIBLE EXPERT TESTIMONY ADMINISTRATOR / NURSE MEDICAL EXAMINER MEDICAL DIRECTOR STATE OMBUDSMAN COST REPORTS SURVEYORS

24 EVIDENCE / WITNESSES EMPLOYEES (ADMINISTRATORS) RESIDENTS FAMILY MEMBERS PHYSICAL EVIDENCE PICTURES RECORDS (Medical, Surveys, s, Faxes, etc.) SUBSTANDARD CONDITIONS Lack of Dietary Supplies & Food Lack of Diapers, Gloves & Linens Laundry Issues Trash Dishwasher not Working Heat/Air Not Working Leaking Roofs Computer & PC Supplies Emergency Supplies Nursing Supplies Lab Work Biohazard Materials Prescription Drugs Freezer & Cooler not Working Housekeeping Supplies

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29 SUBSTANDARD CONDITIONS LACK OF FOOD Mount Berry: $1.83 Cost Per Patient Per Day (February 2007) NATIONAL AVERAGE: $5.60 Per Day (75% Of Nursing Homes In Country Were Above This Amount) Autopsy Photo

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31 STARVATION The judge commented that the autopsy photos were: A true reminder of those poor creatures that I've seen on television who were rescued when the prison camps were located by Allied soldiers or looked like bodies that were in the graves uncovered. Administrator s

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34 INTENT HOUSER S KNOWLEDGE NO MISTAKE OR GOOD FAITH $$$$$$$$$$$$$$$ DIVERSION OF FUNDS

35 PAYROLL ISSUES Employee Checks Bounced Constantly Race to the Bank Rome Banks Quit Honoring Checks Cartersville Banks Quit Honoring Checks No One Will Honor Checks Money Van (Fee) Used Employees Insurance $$$

36 DIVERSION OF FUNDS What was Defendant Doing? Used Nursing Homes as His Own Personal Checking Account Water Place in Roma Marriott Hotel The Guild Medicaid Checks Commercial Real Estate Properties

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38 VERDICT Houser was found guilty of Conspiracy to Commit Health Care Fraud and multiple Tax Fraud Counts. The district court issued a 471-page order that described in detail the horrible conditions existing at the nursing homes. The Court's order stated that the evidence showed a longterm pattern and practice of conditions at [Houser's] nursing homes that were so poor, including food shortages bordering on starvation, leaking roofs, virtually no nursing or housekeeping supplies, poor sanitary conditions, major staff shortages, and safety concerns, that, in essence, any services that [Houser] actually provided were of no value to the residents. SENTENCING Houser was sentenced to 20 years of federal prison and was ordered to pay $6,742, in restitution to Medicaid and Medicare, and $872,515 in restitution to IRS. Houser s 45 Minute Speech The district judge described the conditions at the nursing homes as cruel, atrocious, barbaric, inhumane and uncivilized."

39 5 Week Bench Trial STATISTICS 678 Government Exhibits Admitted 80 Witnesses Testified for the Government 2,922 Transcript Pages 471 page Verdict written by Judge Murphy (Findings of Fact and Conclusions of Law) APPEAL 754 F.3d 1335 (11th Cir. 2014) Houser s Vagueness Argument: Engrafting a worthless services' concept onto the federal health care fraud statute renders the statute unconstitutionally vague and, therefore, void because determining at what point health care services have crossed the line from merely bad to criminally worthless would leave many men of common intelligence guessing.

40 APPEAL 11 th Circuit on Worthless Services: We do not believe that Mr. Houser's conviction requires us to draw the proverbial line in the sand for purposes of determining when clearly substandard services become worthless. 11 th Circuit Affirms: APPEAL Mr. Houser was not prosecuted solely on the basis of the deficient nature of some of the services provided. It is clear both from the indictment and the district court's order of conviction that Mr. Houser also was prosecuted and convicted for failing to provide services that he had certified to Medicare and Georgia Medicaid had been provided to the residents in his homes.

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43 Is Medical Judgment Sacrosanct: AseraCare and the Fight Over Medical Necessity ICLEG Health Care Fraud Institute Atlanta, Georgia December 8, :30 2:30 Panelists: Lena Amanti Assistant U.S. Attorney Atlanta, Georgia Jamila M. Hall Jones Day Atlanta, Georgia S. Craig Holden Ober Kaler Baltimore, Maryland Jay D. Mitchell King & Spaulding Atlanta, Georgia Moderator: Kirk Ogrosky Arnold & Porter Washington, DC 1 False Claims Act Origins For sugar, it often got sand; for coffee, rye; for leather, something no better than brown paper; for sound horses and mules, spavined beasts and dying donkeys; and for serviceable muskets and pistols, the experimental failures of sanguine inventors or the ruse of shops and foreign armories. United States ex rel. Newsham v. Lockheed Missiles and Space Co. Inc., 722 F Supp. 607, 609 (N.D. Cal. 1989) (quoting 1 F Shannon, The Organization and Administration of the Union Army, at 5456 (1965) (quoting Tomes, Fortunes of War, 29 Harpers Monthly Mag. 228 (1864))). 2

44 False Claims Act Basic Elements of a False Claim: Submit or cause to be submitted, a claim for payment; Claim is false or fraudulent (false statement); and Scienter: knew or should have known or reckless disregard for the truth or falsity of the claim. No specific intent needed 3 False Claims Act Theories Traditional Theories: Services not rendered, medically unnecessary services, upcoded services, quality of care, false certifications, retention of overpayment, unbundling, services not covered (e.g., wound care kits, urinary incontinence devices), duplicate payments Themes present in cases: Special treatment to big admitters Fraudulent documentation Poorly structured, or failure to follow, internal process Underlying regulatory violations Kickbacks 4

45 Medically Necessary Care [N]o payment may be made... for any expenses incurred for items or services which... are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member [or]... in the case of hospice care, which are not reasonable and necessary for the palliation or management of terminal illness. 42 U.S.C. 1395y(a)(1). 5 Medically Necessary Care In 1998, the American Medical Association published this patient-and-physician oriented definition of medical necessity: Health care services or products that a prudent physician would provide to a patient for the purpose of preventing, diagnosing or treating an illness, injury, disease or its symptoms in a manner that is: (a) in accordance with generally accepted standards of medical practice; (b) clinically appropriate in terms of type, frequency, extent, site, and duration; and (c) not primarily... for the convenience of the patient, treating physician, or other health care provider. AMA Policy, H

46 AseraCare Current Status: Case is on appeal to the 11th Circuit to review District Court s entry of summary judgment for AseraCare after a jury verdict in favor of the Government in excess of $200 million. Allegations: AseraCare allegedly submitted false claims for patients who did not have a terminal prognosis of six months or less based on the documentation in the patient s medical record. Medicare payment rules: Reimbursement only for hospice care that is reasonable and necessary for the palliation or management of terminal illness. 42 U.S.C. 1395y(a)(1)(c). Must have a medical prognosis of a life expectancy of 6 months or less if the illness runs its normal course. 42 U.S.C. 1395x(dd); 42 C.F.R Certification of terminal illness must be accompanied by clinical information and other documentation that support the medical prognosis in the medical record. 42 C.F.R District Court bifurcated trial into falsity and knowledge/scienter phases. What are medical requirements? Who decides? How are decisions reviewed? 7 Careful Accurate Documentation Accurate and complete medical documentation is a key factor in predicting the likelihood of the outcome of a case Educate on appropriate process for updates to the medical record and late entries Build a strong UR plan and UR Committee UR Committee is mandatory and charged with the task of creating and evaluating the UR plan. The Medicare CoP states the hospital must have a UR plan in effect that provides for review of services furnished by the institution and by members of the medical staff to patients entitled to benefits under the Medicare and Medicaid programs. Use up-to-date screening criteria medical necessity rules and guidance are constantly evolving and screening criteria change along with standards of care. 8

47 Internal Investigations Critically important to understand the facts as expeditiously as possible. Also, must understand the government s claims and the law and governing regulations. When providers fully understand the underlying facts and applicable law and regulations, they may be able to sit down with the government to have an informed discussion of each side s views. Initial stages of a government fraud investigation present a unique opportunity to develop a relationship with the investigating agency. Few things are more important than a provider s credibility during a government investigation. A provider should act in good faith and be responsive to the government s investigation. In some circumstances, internal investigations may serve as an indication of corporate responsibility and good citizenship. 9 Alienating Practitioners Administration and medical staff both have important roles to play. Collaboration and cooperation will be key. Don t wait until after you ve received a subpoena to involve practitioners in compliance and education process. Direct employment of physicians and acquisition of physician practices makes ongoing education even more important. Practitioners will likely respond negatively to internal investigative efforts and try to create separation from facility. Particularly disgruntled practitioners may be relators or cooperating witnesses. Again, no confusion over who is the client. 10

48 QUESTIONS? 11 Is Medical Judgment Sacrosanct: AseraCare and the Fight Over Medical Necessity ICLEG Health Care Fraud Institute Atlanta, Georgia December 8, :30 2:30 Panelists: Lena Amanti Assistant U.S. Attorney Atlanta, Georgia Jamila M. Hall Jones Day Atlanta, Georgia S. Craig Holden Ober Kaler Baltimore, Maryland Jay D. Mitchell King & Spaulding Atlanta, Georgia Moderator: Kirk Ogrosky Arnold & Porter Washington, DC 12