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The U.S. Government Intervenes In $50 Million Healthcare Fraud Case

  • Posted on: Mar 24 2017

Medicare and Medicaid fraud costs taxpayers billions of dollars each year.  In 2016, the Government Accountability Office (“GAO”) estimated that in fiscal year 2015, taxpayers lost almost $90 billion to improper payments from Medicare and Medicaid providers.  The GAO defines an improper payment to be any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements.

It is estimated that fraud and abuse account for approximately 10% of all Medicare and Medicaid expenditures annually. Unfortunately, the government’s resources dedicated to anti-fraud enforcement are limited. However, whistleblowers – those willing to risk career, financial security, reputation and sometimes personal safety to report fraud on the government – can increase the power and impact of those resources significantly.

Earlier this month, the Department of Justice (“DOJ”) announced the filing of criminal and civil actions relating to a 12-year scheme to defraud Medicaid, Medicare, and private health insurance companies out of more than $50 million. The DOJ civil action joins (through intervention) a pending qui tam action that was previously filed under seal.

According to the DOJ, Dr. Asim Hameedi (“Hameedi”), a New York cardiologist, and Dr. Emad Soliman (“Soliman”), a New York neurologist, were arrested and charged in the scheme to defraud. Also charged were four employees or associates of City Medical Associates, P.C. (“CMA”), a clinic operated by Hameedi. All defendants are facing criminal charges for their roles in submitting false insurance claims to defraud Medicaid, Medicare and private health insurance companies.

According to the DOJ, between 2003 and 2015, the defendants perpetrated their fraud by, among other things: (1) making false representations to insurance providers, including providers paid through Medicaid and Medicare, about the medical condition of patients in order to obtain pre-authorization for medical tests and procedures; (2) submitting false claims to insurance providers for tests and procedures that were not performed and/or medically unnecessary, as well as for drug items not used or provided; (3) paying kickbacks to local primary care medical offices in exchange for referrals from these offices; and (4) accessing, without authorization, electronic health records of patients at a hospital based on Long Island, New York (“Hospital-1”), in violation of the Health Insurance Portability and Accountability Act of 1996, in order to identify patients to be recruited to CMA.

In furtherance of the scheme, and to hide from the insurance companies the huge volume of claims, including fraudulent claims, being submitted by CMA, Hameedi, and others submitted claims to the insurance companies falsely representing that medical tests had been ordered or performed by doctors who did not work at CMA and who had not ordered or performed the tests.  These doctors included Soliman, who knowingly participated in the scheme to allow CMA to submit false claims to the insurance companies in his name, as well as two other doctors who did not know that their identities were being used to further the fraud.

In addition, Hameedi and others used various unlawful means to obtain and maintain a high volume of patients for use in the fraudulent scheme, including, among other things, paying kickbacks to local primary care offices and practitioners in exchange for referrals of patients by those offices and practitioners to CMA.  Moreover, Hameedi and employees of CMA repeatedly, and without authorization, accessed information in electronic health records of patients of Hospital-1 to identify and recruit them to CMA and Hameedi’s practice.

“Public health insurance programs, like Medicare and Medicaid, are not a personal pocketbook for criminals seeking to exploit a program designed to help those who need these programs the most,” FBI official William F. Sweeney Jr. said in a statement.

HHS-OIG Special Agent-in-Charge Scott J. Lampert added: “Health care fraud schemes like the one alleged here loot government health programs, compromise patient well-being, and undermine the public’s trust in the health profession.  You can bet our agents will continue to thoroughly investigate such allegations and hold fraudsters accountable for their crimes.”

In the fraud action filed against CMA and Hameedi, among others, the government is seeking treble damages and civil penalties under the False Claims Act for the fraudulent claims submitted to Medicare and Medicaid for reimbursement by CMA.

The criminal case is U.S. v. Asim Hameedi et al., No. 17-cr-00137 (S.D.N.Y.). The civil case is U.S. ex rel. Dr. Patricia A. Kelley et al. v. City Medical Associates et al., No. 1:15-cv-07261 (S.D.N.Y.).

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