In key healthcare-related enforcement actions announced last week, the owner and operator of telemedicine and telemarketing companies, including CPL Media Group Inc. Medipak, LLC, Real Time Physicians LLC, 24 HR Virtual MD LLC, Medtech Worldwide Inc., New World Holdings Inc., and Ins Cov LLC, was sentenced to 14 years in prison for a $20 million health care and wire fraud scheme, as well as for tax evasion of just over $4 million.
According to the U.S. Department of Justice (DOJ), the owner, Florida resident Marc Sporn, used his companies “to market medically unnecessary genetic tests to Medicare beneficiaries, and to sell prescriptions (i.e., doctors’ orders) for medically unnecessary genetic tests to laboratories in exchange for kickbacks and bribes,” knowing that labs would use the doctors’ orders to bill Medicare for the unnecessary tests and services.
Sporn also controlled and operated two companies—Medi Biotech LLC and Walmol Holdings LLC—in Florida via “nominee owners” to market prescription products that were then filled by labs and pharmacies connected to Medi Biotech and billed to Medicare. Those labs and pharmacies then paid Sporn kickbacks. In addition to these offenses, Walmol Holdings LLC was a shell company which Sporn used to avoid paying more than $1.6 million in personal income taxes in 2014 and 2015. He had also previously avoided paying more than $2.5 million in personal income taxes for earlier years, using various means to conceal assets when the IRS attempted to collect back taxes.1
In other key enforcement actions announced over the last week:
June 15: A Louisville, Kentucky, psychiatrist was sentenced for her role in a health care fraud scheme. For one count of health care fraud, the federal court ordered that the psychiatrist, who operates Louisville-based Family and Children Behavioral Health Services, pay $24,217.26 in restitution to the Kentucky Medicaid program and serve 36 months of probation. As part of the fraud scheme, the psychiatrist referred patients to Pennsylvania-based clinical drug testing and drug screening lab Universal Oral Fluid Labs (UOFL). However, those referrals, though billed to Kentucky’s Medicaid program, were deemed to be unnecessary and were not properly documented, according to the DOJ.2
June 16: In a multistate settlement involving all 50 US states as well as Washington, DC, Puerto Rico, and the US government, Mallinckrodt ARD, LLC—formerly known as Questcor Pharmaceuticals—the US subsidiary of Irish pharma company Mallinckrodt plc, agreed to pay $233.7 million to settle allegations of fraudulent Medicaid claims. According to statements released by the Nevada, Florida, and New York attorneys general offices, the pharma giant allegedly underpaid Medicaid rebates for its drug H.P. Acthar Gel (Acthar), violating the federal False Claims Act (FCA) as well as various states’ FCAs and resulting in false claims to the Medicaid programs of numerous states.3,4,5