According to the Tampa Bay Times, Rose Radiology Centers Inc. a Tampa Bay based diagnostic center, will pay the government $8.71 million to settle allegations that it violated the federal False Claims Act by billing federal health care programs for unnecessary radiology procedures.
Rose Radiology Centers Inc. operated approximately a dozen offices in the Tampa Bay area and is the official radiology practice for the Tampa Bay Rays and Tampa Bay Lightning.
The settlement deals with a lawsuit filed by two whistle-blowers under the federal False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery. The lawsuit stated that Rose Radiology Centers Inc. improperly billed for radiology procedures referred by chiropractors, which are not covered by Medicare. Rose Radiology bypassed this constraint when they accepted orders from chiropractors and billed for them as if the tests were actually ordered by a Rose Radiology-employed physician. The whistle-blowers will receive a combined $1.7 million as their share of the recovery from the case.
The radiology center is accused of performing and billing for radiology procedures that were never ordered by the patients’ treatment providers and of sending claims to Medicare for radiology services that were not performed at facilities authorized as Medicare providers, according to the article. In addition to the other allegations, the center is accused of giving kickbacks to referring physicians.
Shimon Richmond, special agent in charge for the Health and Human Service office of the Inspector General stated, “Not only do the kinds of frauds that were alleged in this case rob Medicare of needed funds, they threatened the health of elderly and disabled Americans.”
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On January 22, 2015, The Florida Department of Financial Services’ Division of Insurance Fraud (DIF) announced the arrest of Noel Ruiz of Miami and Alberto B. Franco of Hialeah. The two individuals owned unlicensed clinics and were involved in a “straw ownership” scheme that defrauded numerous insurance companies which resulted in more than $650,000 in financial losses, according to a press release from DIF.
As a result of an investigation led by DIF, it was discovered that Franco and Ruiz both failed to carry the proper licensing required to own a clinic. The two allegedly used a “straw owner” to bypass Florida’s licensing requirements. A “straw owner” is a person who owns a business or property on someone else’s behalf, portraying legal ownership of the property or business all while leaving the actual owner of the business off the books.
The investigation further revealed that Ruiz was the actual owner of Rehab and Wellness Inc. and that Franco was the actual owner of Magic Hands Rehabilitation Center Inc. The investigation also revealed that the straw owners of the clinic were not aware that Ruiz submitted numerous claims to insurance companies for fictitious rehabilitative services totaling over $361,880. Franco also submitted numerous claims to insurance companies for illegitimate rehabilitative services totaling $297,677.
Ruiz and Franco were both arrested on January 14, 2016 on charges of operating an unlicensed clinic, insurance fraud, grand theft, and an organized scheme to defraud. Both individuals can face up to 30 years in prison.
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On January 5, 2016, Kevin McCarty resigned as Florida’s top insurance regulator and stated that his departure would be effective May 2, 2016, according to Bradenton Herald. McCarty, 56, is the state’s Insurance Commissioner who decides how much homeowners pay for their property insurance. He was appointed to the position in 2003 by Governor Jeb Bush and has served under the leadership of three Governors since then. Under Bush tenure, McCarty helped navigate the state through a series of devastating hurricanes while seeking to protect elderly consumers from fraudulent merchants of insurance products.
After many years of navigating the capital’s perilous political landscape McCarty was viewed as vulnerable after Governor Rick Scott took the oath as governor for the second time. Scott’s office already had a replacement in mind: Ron Henderson, a Louisiana insurance official who was being promoted by Fred Karlinsky, a Tallahassee Lobbyist for insurance interests and Scott supporter. Consumer groups rallied to McCarty’s side as a result of the controversy following Scott’s removal of Gerald Bailey as the state’s top law enforcement official.
McCarty is the state’s first appointed insurance commissioner and director of the state Office of Insurance Regulation. His successor must win the support of both Scott and Jeff Atwater, Chief Financial Officer, in a vote by the Governor and Cabinet.
McCarty’s departure leaves an empty position, one of the most challenging jobs in state government due to the sensitivity surrounding the cost and availability of insurance in a state vulnerable to hurricanes and insurance fraud.
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On November 6, 2015, four former employees of the now defunct healthcare provider Health Care Solutions Network Inc. (HCSN) were sentenced for their role in a scheme to fraudulently bill Medicare and Florida Medicaid for approximately $63 million. U.S. District Judge Robert N. Scola of the Southern District of Florida sentenced Roger Rousseau, 73, of Miami, the former medical director of HCSN to192 months in prison: Liliana Marks, 49, of Homestead, former therapist was sentenced for 72 months in prison; therapist Doris Crabtree, 63, of Miami, and Anglea Salafia, 68, of Miami Beach, were each sentenced to 60 months in prison. All four defendants were sentenced to three years of supervised release.
On August 24, 2015, a Miami jury convicted all four defendants of conspiracy to commit healthcare fraud and Rousseau was additionally convicted of two counts of healthcare fraud. To date a total of 22 defendants have been charged and convicted for their roles in the HCSN scheme, which focused on performing services that were not medically necessary and were never provided.
The HCSN scheme provided intensive mental health services to Medicare and Medicaid beneficiaries in Miami and North Carolina from 2004 to 2011. HCSN paid kickbacks to assisted living facilities owners and operators in Miami who, in exchange, referred beneficiaries to HCSN. In order to support the scheme, Rousseau signed, forged, and altered medical records and Crabtree, Salafia, and Mark also falsified medical records. As a result of the scheme, HCSN submitted approximately $63.7 million in false and fraudulent claims to Medicare, and received payments totaling approximately $28 million on those claims.
Please click here to read the U.S. Department of Justice Press release.
On October 15, 2015, the Florida Department of Financial Services Division of Insurance Fraud (DIF) announced the arrest of Eric Wiegandt, 41, on multiple felony fraud charges for conducting a $1.5 million insurance fraud scheme, according to a press release from DIF. DIF led a joint state and federal investigation, which revealed that Wiegandt allegedly coordinated a scheme that fraudulently billed Blue Cross Blue Shield (BCBS) for services that were never rendered at his clinic, the Broward Spine and Rehab Center, located in Hollywood, Florida.
According to investigators, Eric Wiegandt fraudulently signed and submitted nearly $1.5 million worth of fictitious and falsely represented insurance claims between 2013 and early 2015. As a result, Wiegandt received commission payments from BCBS in excess of $230,000.
Wiegandt was evicted in 2014 from his Coral Gables practice location because of alleged mismanagement, and lost his license for failure to complete continuing education requirements. Despite not having a license, Wieghandt opened a new clinic located in Hollywood, Florida. The Hollywood Police Department became aware of Wiegandt’s unlicensed practice and arrested him for continuing to conduct an insurance-related business without an active license. Soon after, the Hollywood Police Department brought in DIF to review the insurance transactions related to the clinic’s day to day operations. As part of its investigation, DIF found that BCBS flagged Wiegandt due to the high volume of insurance claims and patient visits. The investigation also revealed that patients who previously visited the Coral Gables location were allegedly receiving duplicative treatments at the Hollywood location.
Wiegandt was arrested on eight counts of healthcare fraud and the case is being prosecuted by the U.S. Attorney’s Office of the Southern District of Florida.
Click here for press release.
Zian Scott Snyder, 29, and Alicia Maria Hill, 26, of Cantonment, Florida have been charged with scheme to defraud, insurance fraud, grand theft, and conspiracy to commit insurance fraud by the Florida Division of Insurance Fraud (DIF) for alleged false claims over a custom-made engagement ring.
According to an article on NorthEscambia.com, the couple filed a false claim on a $15,000 ring that Hill claimed she lost swimming in the Gulf. She was also recorded claiming she lost the ring on a boat in the Gulf. Four days after filing the claim with her insurance company, Hill took the ring to Marks and Morgan Jewelry store in Ft. Walton Beach to have the ring repaired.. The custom-made ring was identified by photographs taken at the Ft. Walton Beach jewelry store.
Around the same time the couple filed the insurance claim, the store manager of the Jewelry store told authorities she witnessed the ring for sale on Craigslist and that she was positive that it was the same ring in question because she was the one who custom made the ring. The couple told her that the ring had not been stolen, but was eaten by a dog and was later recovered.
A month after the couple filed the insurance claim, Hill called the insurance company to report that the ring had been recovered. The insurance company then advised that the ring or the check must be returned. Three days after Hill informed the insurance company of the recovery, she changed her story once again, stating that it was actually a different ring that was recovered.
The insurance company told state investigators that neither the ring nor the insurance proceeds were ever returned by the couple.
On August 13, 2015, The Florida Department of Financial Services Division of Insurance Fraud (DIF) announced multiple arrests related to a large scale personal injury protection fraud scheme across the Central Florida region.
According to the Orlando Business Journal, DIF and the Federal Bureau of Investigation (FBI) partnered to investigate two clinics, First Medical Rehab of Bradenton and Kirkman Family Chiropractic Care in Orlando. Their investigation led to the arrest of five people, arrest warrants issued for three additional people, and three related arrests in the Fort Myers area. Insurance carriers and former patients raised allegations of possible illegal activity happening at these two personal injury clinics.
The Kirkman Family Chiropractic investigation disclosed their plot of bypassing clinic licensure requirements set by the Agency for Health Care Administration. Co-conspirators solicited licensed chiropractors to serve as straw owners, or owners on paper only because licensed health care professionals can operate clinics without the necessity of an additional clinic license. To date, more than $100,000 in fraudulent claims have been paid by multiple insurance carriers.
The charges varied depending on each individual’s alleged role which included: patient brokering, conspiracy to commit patient brokering, false and fraudulent insurance claims, solicitation, grand theft, organized scheme to defraud and conspiracy to commit insurance fraud. All individuals arrested, if convicted can face anywhere from five to 30 years in prison as well as face fines as large as $10,000.
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