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December 2022 Enforcement Scorecard: Unusual Suspects

by | Nov 25, 2022 | Enforcement-lca, Essential, Lab Compliance Advisor

Federal enforcement actions at the end of October and first two weeks of November featured some unusual characters.

In addition to the usual suspects—durable medical equipment (DME) providers, lab test ordering physicians on the dole of telehealth companies, nursing homes, etc.—federal enforcement actions at the end of October and first two weeks of November featured an unusual cast of characters, including a data entry clerk and an electronic health record (EHR) technology provider. And it wasn’t all kickbacks, false claims, and other forms of fraud. Perhaps the most notable enforcement action of the period was the levying of a substantial fine and ban on a nursing home and its owner for not implementing the mandatory infection control measures required by state health orders during the first months of the COVID-19 outbreak.

Here's a roundup of some of the significant cases reported during the period:

Oct 27: Lab Owner Faces 20 Years in Jail for Lab Test False Billing Scheme

Clinical lab owner Billy Joe Taylor pled guilty to conspiring to bill and receive payment from Medicare for millions of dollars’ worth of lab tests that were never ordered by physicians or provided to the patients listed on the bills. According to the U.S. Department of Justice (DOJ), Taylor and his co-conspirators owned five different labs across the US: Imaginus Diagnostic Laboratory LLC in Spiro, Oklahoma; Beach Tox LLC in Torrance, California; Nations Laboratory Services LLC in Tecumseh, Oklahoma; Corrlabs LLC in Southern Pines, North Carolina; and Vitas Laboratory LLC in Barling, Arkansas. The guilty plea covers one count of money laundering and one count of conspiracy to commit healthcare fraud for Taylor’s role in submitting over $130 million in false claims for these labs, of which he and his co-conspirators received $38 million from Medicare. He faces up to 20 years in prison.1

Nov 1: EHR Company Settles False Claims Act Charges for $45 Million

Florida-based EHR technology company Modernizing Medicine Inc. (aka ModMed) will pay a hefty $45 million to settle claims of violating the False Claims Act by:

  • Referring its clients to Miraca Life Sciences Inc. (now called Inform Diagnostics) for pathology lab services in exchange for kickbacks
  • Conspiring with Miraca to “improperly donate ModMed’s EHR to health care providers” to both boost its user base and Miraca’s number of lab orders
  • Paying kickbacks to key players in the healthcare industry, as well as to its healthcare provider clients “to recommend ModMed’s EHR and refer potential customers to ModMed.”

The settlement only partly resolves claims in a whistleblower lawsuit brought by a former ModMed vice president of product management, according to the DOJ.2

Nov 3: Massachusetts Slams Nursing Home, Owner for COVID-19 Health Violations

Massachusetts-based nursing home Sea View Retreat, Inc. and its owner Stephen Comley II agreed to pay the state Attorney General (AG) $175,000 to settle charges of failing to “implement appropriate infection control procedures at the start of the COVID-19 pandemic in spring 2020.” The laundry list of violations includes failure to:

  • Ensure “consistent staffing teams dedicated to COVID-19-positive residents to prevent further infection”
  • Provide staff with COVID-19 competency training
  • Train its staff on proper PPE use
  • Screen staff entering the facility
  • Perform surveillance testing of staff and residents
  • Properly cohort residents

According to the AG, multiple people were infected and at least one died as a result of these violations. Sea View and Comley have also agreed “to no longer own, operate, or manage a long-term care or assisted living facility in Massachusetts,” the office adds.3

Nov. 4: Data Entry Specialist Sentenced for COVID-19 Vaccination Fraud

A data entry specialist for medical and hospital services provider Griffin Health Services Corporation was fined $5,000 and sentenced to 200 hours of community service for falsifying COVID-19 vaccine records. According to the DOJ, Zaya Powell used her access to the company’s blank COVID-19 vaccination cards, EHR system, and Vaccine Administration Management System to create fake COVID-19 vaccination records for 14 different people who hadn’t actually been vaccinated. Powell pled guilty to one count of making a false statement relating to a healthcare matter on Aug. 12.4

Nov. 10: KC Doctor Nailed for Telehealth Fraud

Dr. Frederick Scott Dattel, 57, owner and operator of Kansas City Pediatrics, L.L.C., pled guilty to causing claims for medically unnecessary equipment and medication to be submitted to Medicare. According to court documents, Dattel was among the physicians that accepted bribes from a telehealth company called RediDoc, L.L.C. in exchange for ordering at least $312,392 worth of high-cost prescriptions and DME that weren’t medically necessary. In addition to $211,542 in restitution payments, he’s now facing up to five years in prison without parole. The owners of RediDoc have also pled guilty of conspiracy to commit healthcare fraud.5

Nov. 14: Pennsylvania MD Billed Medicare for Services He Didn’t Provide

A Pennsylvania psychiatrist who allegedly billed Medicare for services he never provided was indicted on four counts of healthcare fraud. According to the DOJ, Muhamad Aly Rifai, 49, sole owner of Blue Mountain Psychiatry, received at least $1.36 million in payments for phantom services, including treatments for beneficiaries who were dead; he also billed for levels of care than he never actually provided. If convicted, he could face a maximum fine of $1 million and up to 40 years in prison.6

Nov. 14: Florida Health Plan Diverted Patient Claims to Medicaid

A Florida healthcare plan paid $51 million to settle False Claims Act allegations brought in a qui tam lawsuit. The Florida Birth-Related Neurological Injury Compensation Plan and its administrator, the Florida Birth-Related Neurological Injury Compensation Association (NICA), were accused of causing its members “to submit their healthcare claims to Medicaid rather than NICA, in violation of Medicaid’s status as the payer of last resort under federal law,” the DOJ said in a statement. The whistleblowers who filed the lawsuit, in which the US chose not to intervene, will collect a $12,750,000 share.7


  1. https://www.justice.gov/usao-wdar/pr/lavaca-man-pleads-guilty-conspiracy-commit-health-care-fraud-and-money-laundering
  2. https://www.justice.gov/opa/pr/modernizing-medicine-agrees-pay-45-million-resolve-allegations-accepting-and-paying-illegal
  3. https://www.mass.gov/news/ag-healey-reaches-settlement-with-rowley-nursing-home-over-pandemic-response-failures
  4. https://www.justice.gov/usao-ct/pr/waterbury-woman-who-created-false-covid-19-vaccine-records-sentenced
  5. https://www.justice.gov/usao-wdmo/pr/kc-pediatrician-pleads-guilty-300000-medicare-fraud 
  6. https://www.justice.gov/usao-edpa/pr/lehigh-valley-psychiatrist-charged-stealing-medicare-through-improper-billing-scheme
  7. https://www.justice.gov/opa/pr/florida-birth-related-neurological-injury-compensation-plan-and-association-pay-51-million

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