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What Are the Penalties in Health Care Kickback Cases?

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Here is Why Healthcare Marketing Specialists, Physicians, and Healthcare Business Owners from Across the United States Want Oberheiden P.C. on Their Defense Team

Oberheiden PC is a team of former DOJ Officials, presidentially appointed and U.S. Senate confirmed attorneys, former Special Agents with significant healthcare law enforcement backgrounds. Our team has represented hundreds of clients under virtually all imaginable circumstances in over 45 states in federal investigations, federal indictments, and trials involving healthcare kickbacks, healthcare fraud, and federal conspiracies. Kickback allegations are common in the following scenarios.

  • Services Lacking Medical Necessity
  • Medically Inappropriate Prescriptions
  • Referrals to Surgery Centers, Laboratories, Pharmacies in Exchange for Remuneration
  • False Certifications for Home Health Care (Form 485)
  • Physician Ownership Models
  • Payment of Commissions for Marketing Services

Call Oberheiden P.C. today. You will only work with senior attorneys and no junior lawyer will waste your valuable time. Our goals are clearly defined: no criminal charges, no license suspension or revocation, no exclusion from CMS, no civil liability—as we have accomplished in countless cases all throughout the United States. Our clients will only work with:

  • Former DOJ Trial Attorneys
  • Former Federal Prosecutors (Healthcare Fraud Section)
  • Former Prosecutors at U.S. Attorney’s Office
  • Expert Consultants such as Former Special Agents
  • Experienced Attorneys, Proven in Countless Cases

Before you call us, we want to share a small selection of our track record so that you can see how we have resolved kickback allegations and saved our clients from criminal charges, loss of freedom, or loss of their licenses. Don’t experiment with your freedom. Call us today, including on weekends to see how we can protect you.

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FBI Agents Show Up at Your House/Office

Most targets will first become aware of an investigation when they see FBI or HHS-OIG agents approach them unexpectedly at their house or clinic. If this happens to you, please call us immediately. You should resist the temptation to be interviewed by agents as their tactical goal will be for you to incriminate yourself. The better approach is to inform them that you are represented so that your lawyer can first find out what your status in the investigation is and how you could improve your status (e.g. criminal immunity) by cooperating. Oberheiden P.C. has represented hundreds of individuals in FBI/OIG investigations and, in the vast majority, concluded these matters with no criminal charges against our clients.

Grand Jury Subpoena

If you find yourself or your business served with a Grand Jury subpoena one day, all alarm buttons must go off. Grand jurors determine whom to charge with a felony and the fact that they are interested in obtaining information from you is a very meaningful event. Oberheiden PC attorneys have avoided criminal charges in grand jury cases across the United States including those involving physician kickbacks, marketing kickback schemes, telemedicine cases, compound and pharmacy cases, toxicology and CGX laboratory, home health services, and many more. Call our proven team today to find out how we can help you.

Always Ready for Trial

Oberheiden PC Attorneys Have Demonstrated Their Ability to in Courts Across the U.S.— and Obtained Acquittals, Hung Juries, and Dismissals in White-Collar Criminal Cases. Call Us and Find Out How We Can Help You!

If your practice received a Grand Jury Subpoena, a subpoena from the Department of Health and Human Services (HHS), the Office of Inspector General (OIG), an interview request from the FBI, or if you have reason to believe that the government is investigating you, then don’t wait. Call founder attorney Dr. Nick Oberheiden today (including on weekends) to find out how to protect your license and your career.

What Does the Government Have to Prove in a Federal Criminal Healthcare Fraud Case?

Healthcare fraud is regulated in numerous federal statutes, in particular at 18 U.S.C. 1347. Depending on the case allegations and whether or not a case is charged as a conspiracy, the government may try to proceed with one of the following statutes:

Under 42 U.S.C. 1320a-7(b)(b), the government must prove all of the following elements beyond a reasonable doubt:

  1. That the defendant solicited or received remuneration, including any kickback or bribe, directly or indirectly, overtly or covertly, in cash or in kind from any person;
  2. That the remuneration was offered or paid to induce the defendant to refer an individual to a person for the furnishing or arranging of an item or service;
  3. That the item or service was one for which payment may be made in whole or in part under a federal health care program; and
  4. That the defendant acted knowingly and willfully.

Under 18 U.S.C. 1347, the government must prove all of the following elements beyond a reasonable doubt:

  1. The defendant knowingly and willfully executed or attempted to execute a scheme to defraud a healthcare benefit program or obtain money or property from a health care benefit program by means of false or fraudulent pretenses, representations, or promises;
  2. The defendant executed or attempted to execute the scheme or plan in connection with the delivery or payment of benefits, items or services under the healthcare benefit program; and
  3. The defendant acted with the intent to defraud the health care benefit program.

What Are the Penalties for Criminal Kickbacks?

Most, but not all, illegal kickback investigations are criminal, not civil, in nature. In case of conviction at trial or by entering a plea, physicians are at risk of losing their medical license and CMS billing privileges. Further, in cases brought under the general healthcare fraud statute located at 18 U.S.C. 1347 (in particular used for illegal kickbacks involving commercial insurance and not federal patients), a defendant guilty of healthcare fraud is subject to up to 10 years imprisonment per count at sentencing, a term of supervised release, criminal fines, asset forfeiture, and a mandatory special assessment. The Federal Sentencing Guidelines contain a sentencing calculation formula that will be based one of two considerations in kickback cases: the damage amount the incentivized and illegal referrals created (Example 1 below) or, more favorably, the government may simply declare the net amount of the kickback payments the damage (Example 2 below).

Example 1: Physician Received $ 5,000 in Kickback Payments to Refer Home Health Patients.

  • These $ 5,000 prompted the physician to sign 100 (Form 485) certifications
  • The damage to Medicare is $ 900,000 in billed charges and $ 700,000 in collected monies
  • The sentencing calculation could lead to many years of imprisonment

Example 2: Physician Received $ 30,000 in Kickback Payments

  • Government can use the amount of $ 50,000 as the damage
  • The defendant could reasonably expect a probationary outcome

Here Are some Recent Examples of Kickback Prosecutions

  • A New York surgeon was sentenced to 156 months in prison for his role in a multi-million-dollar scheme to defraud Medicare. Dr. Syed Ahmed of Glen Head, New York was convicted of health care fraud after an 11-day trial in the Eastern District of New York. Evidence presented at trial showed Dr. Ahmed practiced as a surgeon at various New York hospitals and billed Medicare for over $7 million dollars’ worth of procedures he did not actually perform. Dr. Ahmed wrote fake surgery reports and sent those reports to a billing company in another state with specific instructions these reports be billed to Medicare. The investigation into Dr. Ahmed was initiated by the Medicare Fraud Strike Force and handled in conjunction with the FBI and HHS-OIG.
  • A neurosurgeon in Detroit, Michigan has pleaded guilty to his role in a scheme involving illegal kickbacks while he was a physician working in California. The neurosurgeon admitted to being involved in illegal dealings with a medical device company while he was employed in California. The neurosurgeon was paid kickbacks each time he used equipment from the device company in his surgeries. According to the plea agreement, the neurosurgeon performed medically unnecessary spinal surgeries on patients just to receive the kickbacks from the device company. The neurosurgeon also convinced the hospital for which he worked to use the medical device company as its main supplier for spinal medical equipment. Each time the hospital bought equipment from the device company, the neurosurgeon was paid an additional kickback.
  • A medical device company from Portland, Oregon has reached a settlement with the United States for allegations relating to illegal kickbacks being paid to ambulatory surgery centers. The settlement will resolve accusations that the medical device companies paid physicians working at various surgery centers to use its devices in surgeries and other procedures. The kickbacks to the physicians came in the form of cash payments, reimbursed meal expenses inflated payments for membership on a physician board. Since this investigation was resolved by a settlement, there has been no finding of liability for the medical device company.
  • A hospital in New Jersey has agreed to pay the United States over $8 million for its role in a kickback scheme arising from improper payments to physicians for surgery referrals. The hospital is alleged to have suffered a decline in certain heart surgeries over a period of several years and to remedy the decline, the hospital paid cardiologists kickbacks in exchange for surgery patient referrals. To try and conceal the kickbacks, the hospital put the involved physicians on part-time contracts; however, the contracts were on paper only, as the physicians never actually worked at the hospital. The physicians who were involved with this scheme have either plead guilty to criminal charges or resolved their allegations with a civil settlement. Since the investigation of the hospital was resolved by a settlement there has been no finding of liability against the hospital.
  • A medical center in Maryland has settled with the United States for $22 million for its alleged role in an illegal kickback scheme involving cardiac surgery patients. The medical center was alleged to have contracted with a local cardiology group where the group would refer its patients who needed cardiac surgery and other highly expensive procedures to the Maryland hospital. In exchange for its referrals, the physicians were paid cash and were also paid above market value for services they provided to the hospital. The hospital entered into a corporate integrity agreement as a result of these allegations that is designed to implement correct procedures in regard to patient referrals. Since the investigation of the hospital was resolved by a settlement there has been no finding of liability against the hospital.
  • A Detroit neurosurgeon plead guilty in 2017 to four counts of health care fraud, one count of conspiracy to commit health care fraud and one count of unlawful distribution of a controlled substance for his role in a scheme to defraud Medicare. According to the indictment, Dr. Aria Sabit owned a neurosurgery center where he practiced and would bill Medicare for services he would not actually perform, mainly spinal fusion surgeries. Sabit also admitted to faking surgery reports that he knew would support fraudulent claims. In addition to billing for services he did not perform, Sabit also received improper financial incentives from a medical device company. In 2010, Sabit invested in Apex, a device company owned by another neurosurgeon, and convinced the hospital where he was working at the time to buy spinal implants from Apex, so he could share in the profits. As a result of this scheme, Medicare paid out $2.8 million. Sabit was sentenced to spend 235 months in prison.

What Is the Statute of Limitations for Healthcare Fraud?

The general rule in criminal healthcare fraud investigations is that the Statute of Limitations will run for five years. However, 18 U.S.C. 3282 is subject to important exceptions, especially in cases that are structured as federal conspiracies.

Why Are Physicians Often Charged in a Federal Conspiracy?

The conspiracy option allows the government to prosecute multiple defendants in one legal action rather than in a series of individual cases. It is important to understand that the government is not required to prove an explicit agreement or understanding among the co-conspirators. If, for example, a spine surgeon accepts a kickback from a spine DME company, and the government decides to charge the physician as well the responsible owner of the DME company as well as the hospital owner where the surgeries where performed, then it is not needed to show that each of the three individuals in that example have ever met in person or ever talked to each other. A knowing aiding, abetting, contributing to the overall kickback scheme is sufficient.

Find Out How Oberheiden, P.C. Has Successfully Defended Physicians, Mental Healthcare Providers, and Business Owners in Federal Anti-Kickback Cases

To speak with a member of our federal health care fraud defense team as soon as possible, call (214) 692-2171 or tell us how to reach you online now.

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