DOJ Settles False Claims Act Allegations with Seattle Physician, his Pain Clinics, and his Drug-Testing Lab
Agrees to pay $2 .85 million to settle allegations his clinics ordered medically unnecessary urine tests at his lab, paid for by government healthcare programs
Dr. Frank Danger Li agreed to pay $2.85 million to state and federal authorities to settle allegations his companies billed government entities for medically unnecessary urine drug tests. Dr. Li’s seven pain clinics closed in July 2016 when the Washington State Medical Quality Assurance Commission suspended his medical license for improperly monitoring prescriptions of powerful opioids. The settlement is a civil resolution unrelated to any criminal investigation or any action by state health regulators.
The investigation helped stop Dr. Li and the providers he supervised from continuing to prescribe dangerous and excessive amounts of opioids. As a result, the government is reclaiming more than one million Medicaid dollars for the unnecessary drug tests he ordered for his opioid prescription practice.
According to the settlement agreement, in addition to his pain clinics, Dr. Li owned drug-testing labs in Seattle and Everett. Northwest Analytics did urine drug testing for Li’s clinics. In July 2013, Li instituted a policy that, in nearly every instance, each patient being treated at Seattle Pain Centers had to have a full urine drug test panel every time they were seen by a provider. This policy resulted in thousands of medically unnecessary tests. The testing protocol did not follow state standards which recommended random testing of up to four times per year.
The settlement funds are divided as follows: restitution to Medicare of $1,590,265; restitution to TriCare of $123,000; restitution to the Railroad Retirement Board of $2,672, and restitution to Medicaid of $1,134,151 ($453,796 federal funds and $680,354 state funds). The settlement agreement details how the funds are to be paid over five years and various ways that the government claims are secured. The settlement amounts are based in part on Dr. Li’s ability to pay.
Dr. Li does not admit any wrongdoing as part of this settlement.
Woman Sentenced To 10 Months for Soliciting Kickbacks and Obstructing Justice
Theresa C. Merced , 81, of Kentucky was sentenced to five months imprisonment to be followed by five months of home detention, and was ordered to pay a $55,000 fine, by Chief U.S. District Judge Danny C. Reeves, following her convictions for soliciting kickbacks from a toxicology laboratory in exchange for urine drug testing referrals, lying to law enforcement agents about the kickback she received, and then attempting to cover up the kickback by requesting the alteration of certain financial records.
Merced, the office manager of a substance abuse treatment clinic in Jackson, Kentucky previously admitted that, between December 2018 and August 2019, she solicited kickbacks from the CEO of a toxicology lab in exchange for urine drug test referrals. In August 2019 the CEO delivered to Merced a $4,000 check as part of a larger package of promised inducements, which she caused to be cashed. When Merced was questioned about the check by law enforcement agents in September 2019, she denied knowledge of it, and stated that the $4,000 was probably a loan from the lab CEO to her husband. Shortly after her interview with the agents concluded, Merced called the lab CEO and asked that he alter the lab’s financial records so that the entry for the $4,000 check would say “rent/loan,” consistent with the lie she told the agents.
Under federal law, Merced must serve 85 percent of her prison sentence and will be under the supervision of the U.S. Probation Office for three years. As a special condition of her supervised release, Merced is prohibited from working in any capacity in which she influences referrals for medical testing.
Insurance fraud is not a good method of funding retirement.
$4.6 Million Health Care Fraud and Kickback Schemes Related to Genetic Testing
Kacey C. Plaisance , 38, of Altamonte Springs, Florida, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti in Newark federal court to an information charging him with two counts of conspiracy to defraud the United States in connection with schemes to commit health care fraud and violate the Anti-Kickback Statute. Plaisance and five co-defendants were previously charged by indictment in September 2019 in connection with the conspiracies.
Plaisance admitted his role in using his company to defraud the Medicare Program in connection with fraudulent orders for genetic tests. According to documents filed in this case and statements made in court:
Plaisance and his conspirators operated Ark Laboratory Network LLC (“Ark”), a company that purported to operate a network of laboratories that facilitated genetic testing. Ark partnered with Privy Health Inc., a company that another conspirator operated, and another company to acquire DNA samples and Medicare information from hundreds of patients through various methods, including offering $75 gift cards to patients, all without the involvement of a treating health care professional. A co-defendant, Matthew S. Ellis, a physician based in Gainesville, served as the ordering physician who authorized genetic testing for hundreds of patients across the country that he never saw, examined, or treated. These included patients from New Jersey and other states where Ellis was not licensed to practice medicine. Ellis, Plaisance, and their conspirators submitted and caused to be submitted fraudulent orders for genetic tests to numerous clinical laboratories. These orders falsely certified that Ellis was the patients’ treating physician and, in some cases, falsely indicated that a patient had a personal or family history of cancer. In 2018 alone, Medicare paid clinical laboratories at least $4.6 million for genetic tests that Ellis ordered in this manner.
Plaisance and his conspirators entered into kickback agreements with certain clinical laboratories under which the laboratories paid Ark bribes in exchange for delivering DNA samples and orders for genetic tests. Ark concealed these kickback arrangements through issuing sham invoices to laboratories that purportedly reflected services provided at an hourly rate even though the parties had already agreed upon the bribe amount, which was based on the revenue the laboratories received from Medicare or an amount paid for each DNA sample. In 2018, the clinical laboratories paid Ark at least $1.8 million in bribes.
Each of the counts to which Plaisance pleaded guilty carry a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense. Plaisance’s sentencing is scheduled for Sept. 17, 2020.
Dominican National Pleads Guilty to False Identity Crimes
Robely Eladio De Jesus Guerrero
, 32, pleaded guilty before U.S. District Court Judge Richard G. Stearns to one count of aggravated identity theft and one count of false representation of a Social Security number. A sentencing date has not yet been scheduled.
A Dominican national who previously resided in Lawrence, Massachusetts pleaded guilty May 8, 2020 in federal court in Boston to fraudulently applying for a Social Security number.
On Jan. 4, 2016, De Jesus Guerrero used the Social Security number of a U.S. citizen to submit a renewal application for a Massachusetts driver’s license under the victim’s name
The charge of aggravated identity theft carries a mandatory two-year prison sentence that must run consecutively to any other sentence imposed, up to one year of supervised release and a fine of up to $250,000. The charge of false representation of a Social Security number provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Physician Pleads Guilty to Distribution of a Controlled Substance Without an Effective Prescription
Dr. Robin Ann Cox pleaded guilty May 6, 2020 to one count of Distribution of a Controlled Substance without an Effective Prescription. According to the plea agreement, Dr.Cox was employed by the Arkansas Medical Clinic (AMC) in Rogers, Arkansas. Cox and the owner of AMC contacted the DEA by telephone to report that prescriptions from Cox’ s previous employment had been fraudulently written and filled.
specifically identified a prescription for patient D.S. written on May 19, 2019 and filled on May 20, 2019, and a prescription for F. R. dated May 17, 2019 and filled on May 17, 2019. During the investigation into these prescriptions, the DEA discovered that Cox had written D.S. his/her prescription in the parking lot of a fast food restaurant in Fort Smith, Arkansas, in the Western District of Arkansas, Fort Smith Division.
Substance Abuse Treatment Provider Pays $295k To Settle Improper Billing Allegations
Connecticut Counseling Centers
(“CCC”) has entered into a civil settlement agreement with the federal and state governments in which it will pay more than $295,000 to resolve allegations that it caused overpayments to be paid by the Connecticut Medicaid Program.
CCC is a healthcare organization that provides outpatient substance abuse and mental health services in Connecticut, with clinics located in Fairfield and New Haven counties. The government’s allegations against CCC arise out of improper billing for urine drug testing services.
The State of Connecticut Department of Social Services (“DSS”) contracted with CCC to provide behavioral health and substance use disorder services to Medicaid beneficiaries. Medicaid reimburses methadone clinics, such as CCC, utilizing a weekly rate payment for each Medicaid patient provided methadone treatment. Regulations issued by the State of Connecticut in 2013 made it clear that the weekly payment was a “bundled” rate that included intake evaluation; initial physical examination; on-site drug abuse testing and monitoring; and individual, group and family counseling services.
On September 3, 2014, Medicaid issued a Provider Bulletin to all methadone clinics reminding them that the weekly rate payment included reimbursement for on-site drug abuse testing and monitoring.
On February 1, 2015, DSS published on its website an Audit Protocol for methadone clinics. The Audit Protocol stated that if a DSS audit found Medicaid paid another laboratory provider for drug testing within a week of the date a methadone clinic was paid for methadone treatment, Medicaid would reduce the methadone clinic’s payment for the methadone treatment service by the cost of the laboratory service.
DSS conducted an audit of CCC and found that both CCC and an independent laboratory billed Medicaid for drug testing performed by the laboratory, contrary to DSS’ weekly rate payment regulation. In January 2016, DSS issued an Audit Report that warned CCC that continued non-compliance with the weekly rate payment rule would result in financial disallowances in future audits.
The government alleges that despite clear guidance from the Medicaid program and the audit finding indicating that on-site drug testing was part of the bundled rate, CCC routinely referred urine drug tests for CCC’s patients to an outside, independent laboratory. As a result, Medicaid paid for the claims twice, once to CCC pursuant to the bundled rate and a second time to the outside laboratory.
To resolve its liability, CCC will pay $295,211 to the federal and state governments for conduct occurring between January 18, 2016 and December 31, 2016.
Doctor Pleads Guilty to Opioid Conspiracy and Health Care Fraud
Dr. Felicia Lyn Donald,
65, of Great Falls, Virginia organized, led, and operated a prescription “pill mill” from at least April 2016 through April 2020. Donald practiced medicine at For Women OB/GYN Associates and NOVA Addiction Center. Donald distributed over 1.2 million milligrams (mg) of Schedule II opioids at or above the Centers for Disease Control and Prevention (CDC) guideline for dosages that a practitioner should avoid, with a total street value of over $1.2 million, and illegally distributed at least 325,190 mg of oxycodone and other Schedule II controlled substances. Donald also committed health care fraud on numerous occasions in furtherance of her scheme.
Dr. Donald pleaded guilty May 4, 2020 to leading and organizing an extensive and illegal prescription distribution conspiracy and a related health care fraud scheme. According to court documents, Donald flagrantly violated her oath as a physician and put countless lives at risk. Additionally, Donald fraudulently prescribed Schedule II opioid pills that she illegally distributed to a close associate, knowing that this individual sold the prescriptions on the street for profit. Around the same time, Donald issued prescriptions to the close associate for alprazolam pills, which belongs to a class of drugs known as benzodiazepines. Donald admitted that the use of opioids with benzodiazepines is a dangerous combination of drugs that can make a person stop breathing, and could have killed or caused serious bodily injury to the close associate or to the ultimate users.
Donald admitted that she prescribed opioids to addicts and/or drug dealers who had traveled from out-of-state or long distances to her practice; individuals that informed Donald of their pending drug charges; individuals who Donald knew had failed urine toxicology screens; individuals who Donald knew were selling the pills that she prescribed to them; paying certain employees, in part, with opioid prescriptions rather than through pay checks; and giving blank prescriptions to certain members of her medical office staff and other co-conspirators for their personal use.
Donald attempted to conceal her patterns of illegal prescribing by falsifying medical records to make it appear as though individuals who were never her patients received examinations and medical care, when in fact they had not, and engaging in Medicaid fraud. Donald fraudulently issued prescriptions to others in the names of at least nine unwitting individuals, none of whom were her patients. Donald also issued prescriptions for high doses of oxycodone to multiple women who were pregnant.
Donald pleaded guilty to conspiracy to distribute and dispense controlled substances outside the usual course of professional practice and without a legitimate medical purpose, and health care fraud. She agreed to surrender her medical license and faces a maximum penalty of 30 years in prison when sentenced on August 21. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.