Audit: State overpays $11.4M in medical costs

Comptroller's audit reveals continuing pattern of problems

Rick Karli, Times Union Copyright 2013 Times Union. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

By Rick Karlin     Updated 9:51 pm, Tuesday, July 9, 2013

New audits from the state comptroller's office find that the state Department of Health is consistently misdiagnosing how much it should pay for Medicaid services, resulting in millions of dollars in annual overpayments to doctors and others who send in the wrong bills.
"Year after year, my auditors identify the same types of Medicaid errors due to weak controls," Comptroller Tom DiNapoli said in a statement accompanying audits that found some $11.4 million in overpayments.
The findings, released Tuesday, reached back to 2009 and focus on Medicaid and Medicare.
Medicaid is the insurance program for the poor, while Medicare pays for seniors and the disabled. Some New Yorkers receive both. In those cases, Medicare pays most of a charge and Medicaid pays the balance.
Auditors looked at more than 201,000 claims and found that care providers had incorrectly reported the charges — posting their own stated rates rather than the lower rate Medicare allows. That added up to more than $7 million in overpayments in 2009.
The health department responded that it refined its billing system at the end of 2009, just as the audit period was ending.
But in a six-month audit looking at a period that ended on March 31, 2012, the comptroller's office found $4.1 million in overpayments.
The findings included billings for duplicative procedures, bills for "high (intensive) levels of care" when less costly treatments would have sufficed, and improper payments for physician administered drugs.
In one case, a Pennsylvania provider charged that state's higher rates for transportation. In another case, a nursing home and hospice both charged for services given to the same patient.
Of the $4.1 million, $3.8 million was recovered, the audit said.
Assemblyman Richard Gottfried, D-Manhattan, who heads the chamber's health committee, said he wasn't surprised by the findings given the size and complexity of the Medicaid system.
"Running a $50 billion system and trying to make corrections while it's running 24-7 is tough," he said.
Gottfried also suggested that the health department could use more people to track Medicaid.
"Nobody ever marched on Albany demanding that there be more clerks in the health department," he said, "although when you squeeze those budgets down, inaccuracies happen."

rkarlin@timesunion.com • 518-454-5758 • @RickKarlinTU
http://www.timesunion.com/local/article/Audit-State-overpays-11-4M-in-medical-costs-4655865.php

 

Supervisor of $63 Million Health Care Fraud Scheme Sentenced in Florida to 10 Years in Prison

U.S. Department of Justice July 08, 2013

WASHINGTON—A former supervisor at defunct health provider Health Care Solutions Network Inc. (HCSN) was sentenced today in Miami to serve 10 years in prison for her central role in a fraud scheme that resulted in more than $63 million in fraudulent claims to Medicare and Florida Medicaid.
The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Wondera Eason, 51, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to her prison term, Eason was sentenced to serve three years of supervised release and ordered to pay $14,985,876 in restitution.
On April 25, 2013, a federal jury found Eason guilty of conspiracy to commit health care fraud.
Eason was employed as the director of medical records at HCSN’s partial hospitalization program (PHP). A PHP is a form of intensive treatment for severe mental illness. In Florida, HCSN operated community mental health centers at two locations. After stealing millions from Medicare and Medicaid in Florida, HCSN’s owner, Armando Gonzalez, expanded the scheme to North Carolina, opening a third HCSN location in Hendersonville, North Carolina.
Evidence at trial showed that at all three locations, Eason, a certified medical records technician, oversaw the alteration, fabrication, and forgery of thousands of documents that purported to support the fraudulent claims HCSN submitted to Medicare and Medicaid. Many of these medical records were created weeks or months after the patients were admitted to HCSN facilities in Florida for purported PHP treatment and were utilized to support false and fraudulent billing to government-sponsored health care benefit programs, including Medicare and Medicaid. Eason directed therapists to fabricate documents, and she also forged the signatures of therapists and others on documents that she was in charge of maintaining. Eason interacted with Medicare and Medicaid auditors, providing them with false and fraudulent documents, while certifying the documents were accurate.
The “therapy” at HCSN often consisted of nothing more than patients watching Disney movies, playing bingo, and having barbeques. Eason directed therapists to remove any references to these recreational activities in the medical records.
According to evidence at trial, Eason was aware that HCSN in Florida paid illegal kickbacks to owners and operators of Miami-Dade County assisted living facilities (ALFs) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid. Eason also knew that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia, and Alzheimer’s disease.
From 2004 through 2011, HCSN billed Medicare and the Medicaid program more than $63 million for purported mental health services.
Fifteen defendants have been charged and have pleaded guilty or been convicted by a jury for their roles in the HCSN health care fraud scheme.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney Allan J. Medina, former Special Trial Attorney William Parente, and Deputy Chief Benjamin D. Singer of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

http://www.fbi.gov/miami/press-releases/2013/supervisor-of-63-million-health-care-fraud-scheme-sentenced-in-florida-to-10-years-in-prison