Connecticut

April 6, 2010

Pediatric Practice Pays $74,644 to Settle Allegations Under The False Claims Act (U.S. Attorney for the District of Connecticut) 

Connecticut: Nora R. Dannehy, United States Attorney for the District of Connecticut, today announced that Fairfield County Healthcare Associates, P.C., doing business as Pediatric Healthcare Associates (PHA), a pediatric medical practice with a business address at 15 Corporate Drive, Trumbull, Connecticut, and with offices in Bridgeport, Fairfield, Shelton, Southport, Stratford, and Trumbull, has entered into a civil settlement agreement with the Government in which it will pay $74,644 to resolve allegations that it violated the False Claims Act.

U.S. Attorney Dannehy explained that the allegations against PHA involved improper billing of a “special services” code.  When services such as office visits are provided on days when the office is normally closed or after a provider’s usual office hours, a provider is permitted to bill an add-on code and receive an extra payment, in addition to the payment for the underlying service. At various times between 2004 and 2008, the so-called “after hours” billing code (CPT code 99050) was defined as services requested after a medical provider’s “posted office hours,” and/or services provided “at times other than regularly scheduled office hours, or days when the office is normally closed (e.g. holidays, Saturday or Sunday).”

In 2006, the American Medical Association provided the following guidance as to when this add-on code could be properly billed: “A patient develops severe ear pain that is unresponsive to home treatment.  Late Monday evening after the office is closed, the physician agrees by telephone to meet the patient in the office to provide treatment.  CPT code 99050 is reported in addition to the basic service.” The American Academy of Pediatrics also issued guidance on this and other add-on codes in 2004: “[I]f routine office hours are advertised as 7:00 a.m. to 11:00 p.m. the after-hours code (99050) would not apply until after 11:00 p.m. In addition, the AMA further clarifies the use of these codes by indicating they cannot be used when the physician and staff ‘plan’ to be at the office ready and available to address patients who may require care, albeit previously unscheduled.”

The Government alleges that PHA routinely billed for the special add-on code when the practice was not closed, but instead was open for business and regularly scheduling patients.  During part of the time period in question, PHA had hours posted on its web site indicating that its offices were open in the evenings until 9 p.m. on most weekdays, and that the practice was open and had regular hours on Saturdays and Sundays.  Although PHA was regularly open during these time periods, it routinely billed Medicaid for the add-on code and received additional payments, above and beyond the usual payments for the services in question.

To resolve its liability under the False Claims Act, PHA will pay double damages, in the amount of $74,644, in order to reimburse the Medicaid program for conduct occurring between January 1, 2004 and March 31, 2009.  The False Claims Act provides for treble damages and penalties of $5,500 to $11,000 per false claim submitted to the Government.

 “The U.S. Attorney’s Office is committed to vigorously pursuing those who defraud the Medicaid program,” U.S. Attorney Dannehy stated.  “Health care providers who improperly charge for care will be held accountable.”

In entering into the civil settlement agreement, PHA did not admit liability.

This case was investigated by the Federal Bureau of Investigation and the Office of Inspector General for the Department of Health and Human Services and was prosecuted by Assistant United States Attorney Richard M. Molot, along with Auditor Kevin A. Saunders.

People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 785-9270.

March 2, 2010

Health Care Facilities that Employed “Excluded Providers” Settle False Claims Act Allegations (U.S. Attorney for the District of Connecticut)

Nora R. Dannehy, United States Attorney for the District of Connecticut, today announced that The May Institute, a Massachusetts-based behavioral health care provider with a facility located at 360 Tolland Turnpike in Manchester, Connecticut, has entered into a civil settlement agreement with the Government in which it has agreed to pay $109,688.96 to resolve allegations that it violated the False Claims Act. The allegations against The May Institute involved claims that the Manchester facility caused claims to be submitted to federal health care programs for services performed by two individuals who had been excluded from Medicare and Medicaid.

U.S. Attorney Dannehy explained that when the United States Department of Health and Human Services, Office of the Inspector General (HHS-OIG) excludes an individual or entity from federal health care programs, no program payments may be made for items or services furnished by that excluded individual or entity. In September 1999, HHS-OIG issued a Special Advisory Bulletin in order to provide guidance to health care providers who might employ or contract with an excluded individual or entity. The Special Advisory Bulletin advised that in order to avoid potential liability, health care providers should check the List of Excluded Individuals/Entities on the HHS-OIG web site (www.oig.hhs.gov/fraud/exclusions.asp). In September 2005, the Connecticut Department of Social Services issued a similar bulletin, warning providers of their responsibility to perform appropriate due diligence to ensure that payments were not being made for services provided by an excluded individual or entity.

The May Institute failed to check the HHS-OIG online exclusion database before hiring the two individuals. The individuals are no longer employed by The May Institute.

The settlement with The May Institute is the latest of several that have been entered into as a result of the U.S. Attorney’s Office and HHS-OIG’s ongoing Excluded Provider Project. In July 2009, Reliance House, a behavioral healthcare provider located at 40 Broadway in Norwich, agreed to pay $5,723.34. In August 2009, Greentree Manor, a skilled nursing and rehabilitation center located at 4 Greentree Drive in Waterford, agreed to pay $14,979.60. In September 2009, Stonington Institute, a behavioral healthcare provider located at 75 Swantown Hill Road in North Stonington, agreed to pay $21,430.54. And in January 2010, Groton Regency, a skilled nursing and rehabilitation center located at 1145 Poquonnock Road in Groton, agreed to pay $42,363.16. In each of these cases, the facility agreed to resolve allegations that it violated the False Claims Act by submitting or causing to be submitted claims to federal health care programs for services performed by an individual who had been previously excluded from Medicare and Medicaid.

To resolve their liability under the False Claims Act, The May Institute, Reliance House, Greentree Manor, Stonington Institute, and Groton Regency agreed to pay damages on the portion of the excluded individuals’ salaries attributable to federal health care programs.  The False Claims Act provides for treble damages and penalties of $5,500 to $11,000 per false claim submitted to the Government.  However, if the person or entity who violates the act promptly discloses the violation to the Government and fully cooperates with any Government investigation of the violation, the Government can recover only up to double damages.

The May Institute, Reliance House, Greentree Manor, and Stonington Institute agreed to enter into certifications promising that they have established policies and procedures to check both prospective and current employees to make sure that they have not been excluded from federal healthcare programs.

In entering into their respective civil settlement agreements, The May Institute, Reliance House, Stonington Institute, Greentree Manor, and Groton Regency did not admit liability.

“Health care providers have no excuse for failing to perform a simple check of the HHS-OIG online exclusion database,” stated U.S. Attorney Dannehy.  “The law is clear, and the Government will seek appropriate damages and penalties under the False Claims Act from health care providers that submit claims for services provided by excluded individuals.”

U.S. Attorney Dannehy noted that, to date, providers have paid the Government a total of $476,943.09 as a result of the Excluded Provider Project.

This matter is being investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and is being prosecuted by Assistant United States Attorney Anne F. Thidemann, along with Auditor Kevin A. Saunders.

People who suspect health care fraud are encouraged to report it by calling the Health Care Fraud Task Force at (203) 785-9270 or 1-800-HHS-TIPS.

January 5, 2010

Former Haven Healthcare CEO Pleads Guilty To Federal Charges (U.S. Attorney for the District of Connecticut)

Nora R. Dannehy, United States Attorney for the District of Connecticut, announced that RAYMOND TERMINI, 48, of Middletown, waived his right to indictment and pleaded guilty on Jan. 5, 2010, before United States District Judge Stefan R. Underhill in Bridgeport to one count of conspiracy to commit wire fraud and one count of monetary transaction in property derived from specified unlawful activity.

According to court documents and statements made in court, TERMINI was the Chief Executive Officer of Haven Healthcare, a defunct healthcare business with its headquarters formerly located in Middletown, Connecticut.  Beginning in 2007, TERMINI and others engaged in a scheme to defraud Omega Healthcare Investors (“Omega”), a real estate investment firm located in Maryland.  Omega owned nursing homes in Connecticut, Vermont, and New Hampshire, which Omega leased to Haven Healthcare, who operated and managed the homes. 

In September 2007, Omega agreed to provide funding to Haven Healthcare for capital improvements to the fire sprinkler systems at two of its facilities, Haven Health Center of Jewett City and Haven Health Center Soundview in West Haven.  Omega agreed to reimburse Haven Healthcare for “Actual Costs” of sprinkler improvements for the fire sprinkler systems at the Jewett City and Soundview facilities, up to an amount of $2 million.

In pleading guilty, TERMINI admitted that he and others obtained the sprinkler funds from Omega, but did not intend to use the money for the sprinklers at the facilities.  TERMINI  further admitted that upon receiving the sprinkler funding, he did not pay the vendors as he had told Omega he would, and did not spend the funds on the sprinklers.

“Individuals who operate nursing homes have an obligation to hold their conduct to the highest standards, and any criminal activity that occurs in this and other health care environments will be vigorously prosecuted,” stated U.S. Attorney Dannehy.

As part of his plea, TERMINI further admitted that in February 2005, he obtained on behalf of Haven Healthcare a $6 million loan from Allied Capital Corporation (“Allied”), a Maryland corporation with its principal offices located in Washington, D.C..  Although the purpose of the loan was to reduce Haven Healthcare’s debt, TERMINI admitted that he spent the money on other purposes, including purchasing real estate in his wife’s name and under an LLC she controlled.

As part of his plea, TERMINI agreed to forfeit $500,000, in the form of a lien on property owned by LLCs controlled by his wife.

“Today’s guilty plea and the others that have been secured in this investigation are a tribute to the outstanding efforts of all the federal agencies that worked on the Haven Healthcare case,” stated Kimberly K. Mertz, Special Agent in Charge of the Federal Bureau of Investigation in New Haven.  “This investigation also serves as a reminder to all that our joint efforts to combat health care fraud here in Connecticut will continue.”

“Raymond Termini and others responsible for the care of care of elderly patients have been held accountable for their criminal conduct,” stated Susan J. Waddell, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, Boston Regional Office.  “Greed, at the expense of our most vulnerable citizens, will not be tolerated.  The Boston Regional Office will continue to aggressively investigate those who commit health care fraud.”

“IRS Criminal Investigation welcomes the opportunity to work with our law enforcement partners on important investigations such as this,” stated Susan Dukes, Special Agent in Charge, IRS Criminal Investigation.  “To combat health care fraud, CI provides financial investigative expertise to multi-agency task forces where we follow the money trail from the crime to the culprit.”

“Anyone abusing the trust and finances reserved for operating nursing homes commits a heinous crime that can impact some of the nation’s most vulnerable people, senior citizens,” stated Kenneth M. Donohue, Inspector General for the U.S. Department of Housing and Urban Development, Office of Inspector General.

Judge Underhill has scheduled sentencing for March 26, 2010, at which time TERMINI faces a maximum term of imprisonment of 10 years and a fine of up to $250,000 on the unlawful monetary transaction count, and a maximum term of imprisonment of five years and a fine of up to $250,000 on the conspiracy count.

This matter is being investigated by the federal Health Care Fraud Task Force, including agents from the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of Inspector General; the Internal Revenue Service – Criminal Investigation Division; U.S. Department of Housing and Urban Development, Office of Inspector General; the U.S. Department of Veterans Affairs, Office of Inspector General, and the U.S. Department of Labor, Office of Inspector General.  The case is being prosecuted by Assistant United States Attorney David J. Sheldon and Auditor Susan Spiegel.

U.S. Attorney Dannehy encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at (203) 785-9270, or 1-800-HHS-TIPS.

November 24, 2009

Waterbury Medical Practice Pays Nearly $100,000 to Settle Allegations Under the False Claims Act (U.S. Attorney for the District of Connecticut)

Nora R. Dannehy, United States Attorney for the District of Connecticut, announced on Nov. 24, 2009 that THOMAS GRECO, M.D., P.C., a medical practice located in Waterbury, has entered into a civil settlement agreement with the Government in which it will pay a total of $99,886.86 to resolve allegations that it violated the False Claims Act.

U.S. Attorney Dannehy explained that the allegations against THOMAS GRECO, M.D., P.C. (“GRECO”) involved claims submitted to federal health care programs for infusion therapy services that were not rendered. As a result, between April 2006 and November 2008, Medicare overpaid GRECO $66,591.24. In order to resolve potential liability under the False Claims Act, GRECO agreed to pay a multiplier of 1.5 times damages, in the total amount of $99,886.86.

The False Claims Act provides for treble damages and penalties of $5,500 to $11,000 per false claim submitted to the Government. However, if the person or entity who violates the act promptly discloses the violation to the Government and fully cooperates with any Government investigation of the violation, the Government can recover only up to double damages.

The U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) has issued a Provider Self-Disclosure Protocol pursuant to which HHS-OIG encourages health care providers to voluntarily disclose matters that may constitute violations of federal criminal, civil or administrative law.

GRECO voluntarily disclosed the conduct in question to the Government, and fully cooperated with the Government in its investigation of this case.

“The health care system relies on health care providers to bill Medicare honestly and accurately,” U.S. Attorney Dannehy stated. “Billing Medicare for services not provided results in excessive payments and damages the fiscal integrity of the Medicare program.”

In entering into the civil settlement agreement, GRECO did not admit liability.

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and was prosecuted by Assistant United States Attorney Anne F. Thidemann, along with Auditor Kevin A. Saunders.

People who suspect health care fraud are encouraged to report it by calling the Health Care Fraud Task Force at (203) 785-9270 or 1-800-HHS-TIPS.

For more information, visit the website of the United States Attorney's Office for the District of Connecticut: http://www.justice.gov/usao/ct/

November 3, 2009

Former Haven Healthcare Director Pleads Guilty to Federal Fraud Charge (U.S. Attorney for the District of Connecticut)

Nora R. Dannehy, United States Attorney for the District of Connecticut, announced that FREDERICK J. DALICANDRO, JR., 45, of Bidwell Street, Glastonbury, waived his right to indictment and pleaded guilty today before United States District Judge Stefan R. Underhill in Bridgeport to one count of wire fraud.

According to court documents and statements made in court, DALICANDRO was formerly employed as director of cash management at Haven Healthcare.  Beginning in August 2007, DALICANDRO and another member of Haven Healthcare’s senior management, identified in court as “Individual A,” engaged in a scheme to defraud Omega Healthcare Investors (“Omega”), a real estate investment firm located in Maryland.  Omega owned nursing homes in Connecticut, Vermont, and New Hampshire, which Omega leased to Haven Healthcare, who operated and managed the homes. 

In September 2007, Omega agreed to provide funding to Haven Healthcare for capital improvements to the fire sprinkler systems at two of its facilities, Haven Health Center of Jewett City and Haven Health Center Soundview in West Haven.  Omega agreed to reimburse Haven Healthcare for “Actual Costs” of sprinkler improvements for the fire sprinkler systems at the Jewett City and Soundview facilities, up to an amount of $2 million.

In pleading guilty, DALICANDRO admitted that he and Individual A submitted invoices and checks to Omega in order to obtain the sprinkler funds, but did not intend to use the money for the sprinklers at the facilities.  DALICANDRO further admitted that upon receiving the sprinkler funding, he and Individual A did not pay the vendors as they had told Omega they would, and did not spend the funds on the sprinklers.

Judge Underhill has scheduled sentencing for January 22, 2010, at which time DALICANDRO faces a maximum term of imprisonment of 20 years and a fine of up to $250,000.

This matter is being investigated by the federal Health Care Fraud Task Force, including agents from the Offices of the Inspectors General of the U.S. Department of Health and Human Services, the U.S. Department of Veterans Affairs, the U.S. Department of Labor, and the U.S. Department of Housing and Urban Development, along with agents from the Internal Revenue Service – Criminal Investigation Division and the Federal Bureau of Investigation.  The case is being prosecuted by Assistant United States Attorney David J. Sheldon and Auditor Susan Spiegel.

U.S. Attorney Dannehy encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at (203) 785-9270, or 1-800-HHS-TIPS.

More information on the U.S. Attorney's Office for the District of Connecticut: http://www.justice.gov/usao/ct/index.html

August 27, 2009

Former Pharmacy Technician Admits Stealing Prescription Medication (U.S. Attorney for the District of Connecticut)

Nora R. Dannehy, United States Attorney for the District of Connecticut, announced on Aug. 27, 2009, that Karima Mohamed, 22, of Ashford, waived indictment and pleaded guilty today before United States Magistrate Judge Stefan R. Underhill in Bridgeport to one count of possession with intent to distribute hydrocodone mixed with acetaminophen, a Schedule III controlled substance.

According to documents filed with the Court and statements made in court, in late 2006, while employed as a pharmacy technician at CVS Pharmacy, located at 1200 Main Street in Willimantic, Mohamed removed bulk amounts of prescription medicines containing the controlled substance hydrocodone. Mohamed has admitted that she possessed with the intent to distribute 21 bottles of 100-count hydrocodone tablets.

Judge Underhill has scheduled sentencing for November 13, 2009, at which time Mohamed faces a maximum term of imprisonment of five years and a fine of up to $250,000.

This investigation was conducted by the Drug Enforcement Administration and is being prosecuted by Assistant United States Attorney David J. Sheldon.

More information on the U.S. Attorney's Office for the District of Connecticut: http://www.justice.gov/usao/ct/press.html.

August 7, 2009

Former VA Nurse Admits Stealing Narcotics (U.S. Attorney for the Western District of Connecticut)

Nora R. Dannehy, United States Attorney for the District of Connecticut, today announced that AGAVIE OSBEY, 32, of New London, pleaded guilty on Friday, August 7, before United States Magistrate Judge Joan G. Margolis in New Haven, to one count of theft of government property.

According to documents filed with the Court and statements made in court, on several occasions between June 2007 and October 2007, while working as a licensed practical nurse at the Veteran Affairs Medical Center in West Haven, OSBEY diverted various narcotics that were intended for patient care. In pleading guilty, OSBEY admitted that she stole narcotics, including Percocet, Fetanyl patches and oxycodone, from a PYXIS drug-dispensing machine by signing the narcotics out under the names of different VA patients with standing orders for narcotics.

Judge Margolis has scheduled sentencing for October 26, 2009, at which time OSBEY faces a maximum term of imprisonment of one year and a fine of up to $100,000.

This matter was investigated by the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division and the VA Police. This case is being prosecuted by Assistant United States Attorney Douglas P. Morabito with the assistance of law student intern Nicole Fernandes.