Physician-Owned Hospital to Pay $7.5 Million to Settle Kickback Allegations to Physicians in Exchange for Surgical Referrals

Healthcare Compliance Perspective:

The Anti-Kickback Statute makes it a crime for healthcare providers to pay or receive any remuneration to induce referrals for services reimbursable by a federal health care program. Remunerations can include but are not limited to, marketing services, advertising, cash, vacation stipends, or below market value rent. Violating the Anti-Kickback Statute may result in false claims, Corporate Integrity Agreements, Civil Monetary Penalties, imprisonment, or exclusion.

A physician-owned hospital serving the Dallas/Fort Worth area, has agreed to pay $7.5 million to resolve claims that it violated the False Claims Act by paying physicians kickbacks in the form of marketing services in exchange for surgical referrals.

The government alleged that, between 2009 and 2014, the hospital engaged in an illegal kickback scheme to pay for marketing and/or advertising services for some physicians. These paid advertisements included local and regional publications, radio and television, internet pay-per-click campaigns, billboards, website upgrades, brochures, business cards and other marketing venues. In return, the physicians would refer their surgical patients, including Medicare and TRICARE beneficiaries, to the hospital.

As part of the settlement, the hospital has agreed to enter into a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which obligates the defendants to undertake substantial internal compliance reforms for the next five years.

The settlement resolves allegations originally brought in a lawsuit filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The whistleblowers, two former employees of the hospital’s marketing department, will receive $1,125,000.

A 70-year-old Woman Arrested for Possession of Toxic Ricin Poison

Healthcare Compliance Perspective:

Residents have the right to personal items only if the items do not interfere with the rights, health, or safety of others. If these personal items are found to be unsafe, facilities may confiscate the items if it is safe to do so and promptly contact the proper authorities.

FBI agents arrested a 70-year-old woman living in a continuing care community and charged her with possession of an unregistered select agent, ricin. How authorities became aware that the deadly substance was on the premises of the facility was not disclosed. A search of the facility that included the woman’s living quarters uncovered the ricin in a bottle labeled “ricin.” A forensic lab confirmed that the bottle contained ricin, a toxin regulated by the federal government due to the severe threat it poses to public health.

Ricin is found in the seeds of the castor oil plant and is very toxic. A few grains of pure powder-no larger than a few grains of table salt-can cause death in an adult.

During her questioning by the authorities, the woman said she was interested in plant-based poisons, and conducted internet research on how to make them. The four to six tablespoons of ricin she made came from 30 to 40 castor beans she found growing on facility’s property. She tested the poison’s potency, by placing it in the food or beverages of other residents on at least three occasions. At least one victim became ill, but no one died from the poison. The woman said that she wanted to harm herself and planned to take the ricin herself.

A team of specially trained FBI agents from across the Northeast were brought in to complete the searches of the facility and the woman’s vehicle. The searches turned up no ricin or other hazardous material outside the confines of the woman’s residence. Inside her residence, the FBI located the poison, along with components from several plants, including apple, yew, cherry, castor and foxglove, which can all be used to produce toxins.

Nursing Home Resident Dies After Van Accident

Healthcare Compliance Perspective:

Employees can only perform at the level of the equipment provided to them. Without proper equipment, such as seatbelts that accommodate for size differences, staff members in the following news article were only able to secure the resident’s wheelchair and not the resident. Compliance Officers must audit equipment regularly as well as maintain open, ongoing communication with staff members to ensure the appropriate equipment is available to provide high quality care.

A resident in a NY nursing home died after the van taking him to a hospital was involved in an accident. The resident’s wheelchair was securely fastened in the van, but the resident was not securely fastened to the wheelchair. Staff from the nursing home reported that the reason the man was not secured in his wheelchair was because they “did not have a belt that fit the man comfortably in the wheelchair.”

The van driver told police that he swerved suddenly to avoid hitting another car that pulled in front of the van. The unsecured resident was injured from the sudden movement that caused him to be flung from the wheelchair. The resident died soon after the accident from injuries that were not specifically identified. An autopsy is scheduled to be performed on the man to determine the exact cause of his death.

The police report that no charges have been filed, but the investigation is continuing.

The incident has stirred up concerns about the facility’s care competency because of the new owner’s purportedly “dubious track record” at its other facilities. Before it was purchased by the current owner in 2015, the facility had a four-star rating from the state; now, it has a one-star rating. The facility’s spokesperson attributed its current downturn in rating to the fact that starting this past August, it now accepts residents with more medical issues than those accepted by other facilities in the county.

The New Survey Process: What is it, and Why?

November 28, 2017 was the Centers for Medicare & Medicaid Services’ (CMS) deadline for implementing the “new survey process”—but the good news is that the authorities have granted a grace period of 12 months during which there will be no penalties for certain selected F-Tags in order to give all long-term care facilities (LTCs) the time to fully convert to the new system.

The obvious question which commonly arises is why is the CMS new survey process being implemented at all?

The simple answer is that it has been designed to establish a computer-based, nationwide survey process to ensure patient/resident well-being and quality of care.

As readers will know, nursing home surveys are conducted in accordance with protocols and federal requirements to determine eligibility for participation in the CMS’s ongoing programs. However, a lack of a uniform standard in conducting this survey has produced its own set of problems.

Currently, about half of all LTCs use the Quality Indicator Survey (QIS), and the other half use the traditional survey process, according to CMS data.

While the traditional processes have both positive and negative attributes, the reality is that the survey systems have not been updated in nearly a quarter of a century—and the time for such an update is well overdue, given the advances in administrative processes and technology, the CMS has said.

The QIS system, while computer-based, can seem too regimented or inflexible, while the traditional process allows the surveyor “a little more flexibility,” a recent CMS handout on the process said, adding that the new survey process “leverages best practices of both.” In other words, it will be completely computer-based, but incorporate the flexibility of the traditional paper process.

The computer-based QIS proved to be better at identifying unnecessary medications, while traditional, paper-based surveys proved better at identifying infection control issues, the CMS said.

The new process will be split into two parts: a resident sample selection, comprised of 70 percent of residents chosen offsite and 30 percent selected onsite, followed by an investigation.

The launch of the new process will also mean changes to the F-Tag system, with some tags splitting into more than one tag, others being combined, and some being completely new.

Coming on top of QAPI and a host of other administrative changes, CMS has acknowledged that forcing all LTCs to immediately comply with the CMS new survey process might cause internal problems.

On November 24, 2017, therefore, the CMS announced that following the implementation of the new LTC survey process on November 28, 2017, they would hold constant the current health inspection star ratings on the Nursing Home Compare (NHC) website for any surveys occurring between November 28, 2017 and November 27, 2018, thus effectively giving facilities twelve extra months under the CMS new survey process before their results become public.

Man Sentenced on Health Care Fraud Conviction

Healthcare Compliance Perspective:

Medicare Fraud is knowingly submitting false claims to obtain Federal healthcare payments for services either no rendered or billed for at a higher complexity that services actually provided. Making claims for services either not provided or not provided by a required certified, licensed healthcare professional can result in false claims and constitutes healthcare provider fraud.

A 49-year-old man from Texas, who pled guilty in August 2017 to one count of health care fraud, was sentenced today by a U.S. District Judge to 41 months in federal prison and ordered to pay $514,576.29 in restitution, joint and severally with his co-defendant. The announcement was made last week by a U.S. Attorney of the Northern District of Texas.

As part of the plea agreement the former chiropractic clinic operator agreed to forfeit a total of $84,750.23, and to surrender to the Bureau of Prisons on January 9, 2018.

According to the plea agreement factual resume, from July 2012 through July 2015, the man operated a chiropractic clinic in Texas, without a license issued by the Texas Board of Chiropractic Examiners. A co-defendant assisted the man in billing insurance companies for services legally billable only by a licensed chiropractor. They also billed for services not rendered and for services rendered in lesser quantities billed.

The two defendants would deliberately omit the man’s name or national provider identifier on their clinic’s itemized billing statements. The pair also listed the specific type of procedure or service the clinic provided by misrepresenting to insurance companies that the procedures being billed were performed by a licensed health care provider in good standing with their state board.

An estimated $524,547.29 in payments was issued by health care providers to the clinic from 12 insurance companies.

Social Media and HIPAA Violations: A Risk for Healthcare Providers

Social Media and HIPAA

The time when social media involved only Facebook and Myspace has changed, and with that change comes a risk to healthcare providers for HIPAA violations. Not only can employees access patient information on their desktop and laptop computers, but they can also access it via their portable devices like smartphones and tablets. The addition of Snapchat and Instagram to the social media arena further expands the potential for breaches of personal health information (PHI) and violations of HIPAA rules. Social Media and HIPAA are closely related and their direct relationship needs to be addressed.

Recently, a news media poll conducted by CNBC found the “instant gratification” provided by Snapchat and Instagram was favored by younger millennials. The danger and concern for healthcare providers come from the medical personnel and employees working for healthcare providers who fall into this category of younger millennials. There is a misconceptSocial Media on a smart phoneion that content shared on these formats does not remain and that it disappears after the sharing. The fact is that Snapchat posts and Instagram stories are not temporary.

For example, it was believed that Snapchat had a security breach in 2014 where 100,000 photographs and videos were made public, and this had the potential of violating HIPAA rules. The breach did not occur on Snapchat servers; however,  a third party site called was identified as the source. There is still concern regarding applications that allow the user to save pictures, videos and information on their devices.

There are two ways that the relationship between social media and HIPPA intersect when using Snapchat and Instagram. The first involves an innocent posting by a person who has no awareness that what they are sharing has PHI. The other is when a person is knowledgeable that what they are posting is a violation of HIPAA regulations, but they post it because they think the content is temporary. Both of these violations are punishable under HIPAA.

Due to the popularity of these new social media platforms and the potential danger of PHI breaches that violate HIPAA regulations, healthcare providers need to educate their employees—especially millennials—who like to use Snapchat and Instagram that the things they post with the belief that they are temporary is a misconception and they should take steps to ensure that it does not happen.

Woman Pleads Guilty to Stealing from Nursing Home Residents

Charged with 20 criminal counts of “theft and receiving stolen property” from the elderly residents in the nursing home where she was employed, a former employee pled guilty in the Pennsylvania County Common Pleas Court. She indicated to the Judge that she thought “it was in her best interest to plead guilty” to the charges that ranged from stealing money and jewelry, to writing forged checks on two residents’ accounts and pocketing the money.

The woman committed the thefts during a four-month period in 2016. The thefts were discovered by nursing home administrators who notified the police that they suspected the woman. The police confronted the woman about the thefts and she admitted to forging the two resident’s names on the checks, but she said she had only done so because the residents requested it. The jewelry she took from the residents included-wedding rings, earrings and religious items-all of which she pawned. One of the checks she forged was for $400.

The woman will be sentenced in three months; and, in the meantime, is out of jail on a bail bond.

EEOC’S Final Judgment Finds Health Center Guilty of Sexual Discrimination

Healthcare Compliance Perspective:

Harassment based on specific characteristics is unacceptable conduct for any employee working in healthcare. Healthcare providers can ensure that employees are aware this behavior is not tolerated and the associated consequences by integrating a code of conduct into new hire orientation as well as in-servicing staff on appropriate conduct in the workplace. All allegations of harassment are to be taken seriously, investigated fairly, and promptly handled.

In its first sexual discrimination lawsuit filed by the Equal Employment Opportunity Commission (EEOC) based on sexual orientation, a U.S. District Court has found a pain management and weight-loss healthcare center guilty, and fined them $55,500. The healthcare provider will also be required to report to the EEOC for five years on any future sexual harassment complaints lodged against the provider the agency receives.

The lawsuit was based on claims by a gay male employee that he received “persistent and egregious harassment” because of his sexual orientation, and that he was forced to quit his job because the healthcare center refused to provide protection against further sexual discrimination.

Before going to trial, the EEOC unsuccessfully tried to resolve the lawsuit through its “conciliation process.” The $55,500 awarded in the case included compensatory and punitive damages of $50,000 and backpay of $5,500. Although the EEOC was able to prove that the man was entitled to $125,000 in damages, provisions in the Title VII law limit the amount that can be awarded; so, the damages were reduced to $50,000

Operator of Purported Durable Medical Equipment Providers Pleads Guilty

Healthcare Compliance Perspective:

Compliance Officers must focus on ensuring that products and services are provided for which Medicare/Medicaid reimburses for.

An operator of multiple, purported durable medical equipment (DME) companies pled guilty last week to fraud charges for her role in a scheme to defraud a non-profit, New York-based health maintenance organization that administers Medicare Advantage plans and New York Medicaid Managed Care plans.

The accused woman from Maryland pled guilty to one count of conspiracy to commit healthcare fraud before a U.S. District Judge in the Eastern District of New York. Sentencing has been scheduled for March 21, 2018 before the judge.

As part of her guilty plea, the woman admitted that she operated a series of purported DME companies that did not in fact provide equipment to any beneficiaries. She further admitted that she and others called the healthcare non-profit, falsely representing themselves as vendors in the organization’s network. The companies the woman operated submitted almost $1 million in false claims to the non-profit for reimbursement, and she admitted to receiving more than $300,000 related to those false claims.

Lawsuit Accuses Senior Living Facility of Elder Abuse and Negligence

Healthcare Compliance Perspective:

Healthcare Providers can work in partnership with local agencies, such as fire department, law enforcement, and community emergency response teams, to orchestrate fire prevention, planning, training, and response drills in order to prevent a situation similar to that below with untrained staff and unorganized response that result in unfortunate, avoidable harm to residents.

A senior living facility in the Santa Rosa, California, area was recently destroyed by an out of control fire that burned acres of forest and swept into several communities. Recently, a lawsuit was filed on behalf of several of the nearly 70 elderly residents living in that facility-some of them with dementia-who narrowly escaped the approaching fire. The lawsuit makes allegations of elder abuse, emotional distress and negligence by the facility’s management, and calls into question concerns about understaffing, the lack of an evacuation plan and possible abandonment of some elderly residents.

The lawsuit claims that when the incident occurred, only three staff members were left in the facility to care for the nearly 70 disabled residents-almost a dozen of them with dementia who resided in a locked area of the facility. About two-thirds of the facility’s total residents had been previously removed to different locations.

It was reported that the facility had earlier made public declarations via an email that, “All of our communities have evacuation plans.” However, when some of the family members arrived at the facility around 2 a.m. as the fire approached, they asked the staff specifically how they could help with the facility’s evacuation plan. They were told there was no plan, but staff were waiting for the facility’s director. The family members of the residents are credited with getting the nearly 70 residents out of the facility to safety.

The facility’s administration emailed this statement in response to reports that they had abandoned some of the residents, “While we were in the process of shuttling residents to a designated location, authorities refused to allow staff to reenter the area because of the existing danger ….”

A captain in the Santa Rosa Police Department later made this statement to reporters, “We were not stopping anybody from helping save lives that night.”

Another issue raised by the families and the residents involved the facility’s dumping of the remains of the destroyed facility into a landfill without giving the residents or their families an opportunity to check the remains for personal belongings.