Since our last Weekly Enforcement Report, the U.S. Department of Justice has announced several key healthcare-related cases. In one lab-related case of note, an arrest warrant was issued on May 6 for a former lab co-owner, who had previously been convicted and sentenced for his role in a kickback scheme, after he failed to report to prison.
Several False Claims Act (FCA) related cases were also announced.
Key Healthcare-Related Enforcement Actions Announced from April 26 – May 10, 2023
|Date Action Announced||Defendant(s)||Allegations/Charges/Convictions||Result|
|April 26, 2023||David Lyle Shehi||Owner of an Alabama-based pain management clinic pled guilty to conspiracy to pay kickbacks and commit healthcare fraud relating to his referrals for items/services, including electro-diagnostic testing, that were then billed to Medicare.||Shehi awaits sentencing, but could see up to five years in prison.1|
|April 26, 2023||Dr. Charles Lieber||Convicted of two counts of failing to file reports of foreign bank and financial accounts with the Internal Revenue Service (IRS), two counts of making and subscribing a false income tax return, and two counts of making false statements to federal authorities relating to his participation in China’s Thousand Talents Plan and affiliation with the Wuhan University of Technology in Wuhan, China.||Sentenced to two days of time served in prison, two years of supervised release with six months’ home confinement, a fine of $50,000, and $33,600 in restitution to the IRS.2|
|April 28, 2023||Northwest Arkansas Hospitals, LLC||Following an audit by the Arkansas Foundation for Medical Care, the hospital was accused of not providing the proper documentation to support or justify the medical necessity requirement for hospitalizations in 246 cases, thus violating the Arkansas Medicaid False Claims Act. The hospital cooperated with the investigation.||Will repay the state Medicaid program $1,112,631.54.3|
|April 28, 2023||Hearing Screening Associates, LLC (HSA)||Allegedly submitted claims for audiology services under CPT code 92585 “that were not provided as claimed because audiologists did not read, interpret, or sign automated test results,” thus violating the Civil Monetary Penalties Law. HSA self-disclosed the conduct to the OIG.||Settled for $4,015,227.04.4|
|April 28, 2023||· Dr. Fadi El-Atat|
· Dr. Sarah Abdul-Sater
· FA CV Consultants P.C.
|Two doctors and their medical practice allegedly violated the False Claims Act by performing and billing medically unnecessary procedures to Medicaid and Medicare. The allegedly unnecessary tests include allergy, cardiology ultrasound, autonomic nervous, pulmonary function, and balance tests.||Settled for $1 million.5|
|May 6, 2023||Richard Reid||The former co-owner of medical testing company Northwest Physicians Laboratory (NWPL) was convicted in March 2022 of five felonies related to an illegal $3.7 million urine drug testing kickback scheme.||After being sentenced to two years in prison in January, a warrant was issued May 6 for Reid’s arrest after he failed to report to prison the previous week. According to an update, he was apprehended by police on May 7 “without incident” and “remains detained.”6|
|May 9, 2023||Steven Donofrio||The California citizen was found guilty of his role in a more than $28 million kickback scheme relating to the referral of pharmacogenetic (PGx) testing to clinical labs in that state.||A sentencing date has not yet been set.7|
|May 9, 2023||Dr. Gautam Jayaswal||Pled guilty to one count of conspiracy to commit healthcare fraud related to his involvement in a roughly $16 million telemedicine scheme in which he ordered medically unnecessary genetic tests and orthotic braces for thousands of patients, which were then billed to Medicare.||In addition to repaying the fraudulently obtained funds, Dr. Jayaswal could face up to five years in prison, a maximum fine of $250,000, or both.8|
|May 9, 2023||· Blue Waters Assessment and Testing Services, LLC (BATS) |
· VerraLab JA, LLC (doing business as BioTap Medical)
|The two Kentucky-based businesses are accused of improperly billing Medicare and the state Medicaid program for urine drug testing ordered by the Fayette County family courts. BATS collected and sent the specimens to BioTap for testing, which then billed the federal and state health insurance programs. However, because Medicare and the Kentucky Medicaid program only pay for tests used for medical diagnosis and treatment, the companies are accused of violating the FCA.||Settled for $1,740,620, $1,490,620 of which will be paid by BioTap, and $250,000 of which will be paid by BATS and its owner.9|
|May 9, 2023||· Yale New Haven Health Services Corp. · Northeast Medical Group, Inc.||Accused of violating both the federal and state FCA by submitting Medicare and Medicaid claims for services billed by physicians when those services should have been billed by mid-level providers at a lower reimbursement rate.||Settled for $560,718.48.10|