Three Chiropractors Found Guilty of Federal Fraud Charges

Three Florida chiropractors involved in a plan to fraudulently obtain money from insurance agencies have been found guilty on federal money laundering and mail fraud charges.

The chiropractors—Hermann Diehl of Miami, Kenneth Karow of West Palm Beach, and Hal Mark Kreitman of Miami Beach—helped set up staged automobile accidents and then filed fake claims for “victims” of the crashes. They also billed insurance agencies for procedures that were not actually performed.

The verdict was rendered on April 22 by a jury in the U.S. District Court for the Southern District of Florida. A fourth defendant, Joel Antonio Simon Ramirez of West Palm Beach, was found guilty of helping to stage the accidents.

All four of the defendants were found guilty of money laundering and mail fraud, with sentencing set for July. They each face a maximum sentence of 20 years in prison.

Readers of FLPIPGuide.com may recall that we wrote about Dr. Karow in a May 17, 2013 post titled, “92 Accused in Staged Accident Fraud Ring, $20 million in Fraudulent Claims.” At that time, an Operation Sledgehammer investigation revealed that chiropractors Lazaro Rodriguez, then 58, of Doral, and Kenneth Karow, then 53, were recruited to serve as owners of clinics involved in the ring.

 

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Filed under Case Law, Insurance Fraud

Florida Supreme Court Refuses to Review PIP Case

The Florida Supreme Court has refused to consider a petition seeking to overturn a 2012 state law reducing PIP benefits.

In an attempt to curb fraud and lower insurance rates, HB 119—Personal Injury Protection (PIP) for Auto Insurance Fraud—requires people involved in motor vehicle crashes to seek treatment within 14 days, and allows up to $10,000 in benefits for emergency medical conditions and up to $2,500 for non-emergency conditions.

The law also prevents accident victims from using PIP coverage to pay for treatment by certain medical providers, and set benchmarks for insurers to lower rates on PIP coverage.

In 2013, Leon County Circuit Judge Terry Lewis ruled that the law illegally shut out some medical providers, namely acupuncturists and massage therapists.

As reported in an earlier blog post titled “Motion for Rehearing of Florida PIP Injunction is Denied,” the Florida First District Court of Appeal reversed the ruling in October, 2013, saying that the challengers to the law needed a “factual” plaintiff who had actually been harmed by the law rather than a hypothetical plaintiff, as named in the complaint. The Florida Supreme Court denied review of that decision in this week’s ruling.

An attorney representing medical providers who claim they were unfairly shut out by the law said he anticipates filing an amended case within 30 days using a named plaintiff alleged to have been harmed by the 2012 PIP reforms.

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Filed under Case Law, Fla. Stat. 627.736 (2012), Insurance Fraud

Roig Lawyers Partner, Jeff Tutan, Speaks at 2014 Medical Claims Defense Network on Topic of Use of Mobile X-rays

On April 16, 2014, Roig Lawyers Partner, and Board Certified Trial Attorney, Jeff Tutan presented at the Medical Claims Defense Network Conference in Orlando, Florida.  Jeff Tutan, head of the firm’s trial practice group, discussed his recent success at jury trial in a case involving a medical provider’s claim for reimbursement for “mobile x-ray” services.  During the round table presentation, Attorney Tutan discussed how he, partner Jessica Martin, and senior associate attorney Jenna Hackman, successfully defended such a case involving these increasingly prevalent medical services.

For more information, contact attorney Jeff Tutan at jtutan@roiglawyers.com.

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Filed under Fla. Stat. 627.736 (2008), Fla. Stat. 627.736 (2012), Licensing

Chiropractors in $2.3 Million PIP Insurance Fraud Scheme will Face RICO Charges

A federal judge ruled that the chiropractors who were allegedly behind a $2.3 million ploy to defraud an insurance company must face charges for violating the Racketeer Influenced and Corrupt Organizations Act (RICO) and Florida’s Deceptive and Unfair Trade Practices.

In July 2012, GEICO Insurance Company filed a lawsuit against two Orlando-based clinics—KJ Chiropractic Center LLC and Wellness Pain & Rehab Inc.—in addition to their two founders and a number of co-conspirators, known as “runners.” These runners helped perpetrate the suspected scam by exploiting willing third-party participants who faked accidents and injuries.

According to an article in Courthouse News Service, U.S. District Judge Charlene Edwards Honeywell said in her order that the fraudulent PIP claims resulted in more than $2.3 million in unwarranted insurance benefits and emerged from:

  • Staged accidents;
  • Real accidents in which claimants received treatment at clinics even though they were not truly injured; and
  • Real accidents in which claimants incurred some injuries, but received treatments that were pre-programmed, unnecessary, excessive and unlawful.

GEICO charged that the defendants advanced their unlawful plot by paying “anyone who referred accident victims to the clinics, offering cash directly to patients who agreed to accept unnecessary chiropractic treatment.” The insurance company also claimed the clinics provided treatment that was not in the best interest of patients because its sole intent was to maximize profits, the article said.

The U.S. District Court for Florida’s Middle District, Orlando Division, adopted Judge David Baker’s full recommendations made in October 2013 to deny the defendants’ motion to dismiss a second amended complaint on all but one count.

Judge Honeywell Edwards said she felt that GEICO adequately supported its argument with “factual allegations to state plausible claims for relief. As such, the court agrees with the Magistrate Judge that GEICO’s claims are sufficiently pled.”

The case is GEICO v. KJ Chiropractic Center LLC et. al., U.S. District Court for the Middle District of Florida, Case No. 6:12-CV-1138-ORL-36-DAB. Click on the link to read the complaint.

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Filed under Case Law, Insurance Fraud

U.S. Publishes Doctor-Level Data on $77 Billion in Medicare Billings

The Centers for Medicare and Medicaid Services recently released a treasure trove of 2012 Medicare payment data on 880,000 health care providers nationwide.

Intended to increase healthcare transparency, the data represents Medicare Part B claims totaling $77 billion in medical billings. Doctor visits, laboratory tests, and other treatments provided outside of a hospital setting are included in the database.

Payment history for 6,000 services and procedures is now available at the level of individual health care providers, including the identification of doctor names. Dollar amounts disclosed include Medicare reimbursements, as well as patient payments in the form of deductibles or co-insurance. Procedures on fewer than 10 Medicare recipients conducted by a single provider are excluded.

The U.S. Government Accountability Office (GAO) reports that 49 million elderly and disabled Americans received more than $555 billion in Medicare services during 2012. Fraud is an acknowledged element of the Medicare program, and the GAO estimates at least $44 billion in annual Medicare disbursements are made improperly.

Ophthalmologists and radiation oncologists are medical specialties that stand out as receiving high payment levels, relative to total national Medicare spending, according to the Wall Street Journal.

Dr. Salomon Melgen, a Florida ophthalmologist, received the highest level of 2012 Medicare reimbursement in the country, according to the Tribune Newspapers. Melgen’s billing practices and political connections have been the subject of a grand jury investigation.

Another Florida doctor, Ocala-based cardiologist Asad Qamar, took second place nationally with $22.9 million in 2012 Medicare payments, also as reported by the Tribune Newspapers.

A federal injunction, granted at the urging of the American Medical Association, has kept this data private since 1979. The Wall Street Journal published an investigative series on physician reimbursements in 2011, and in the following year its parent Dow Jones & Co. took legal action seeking database access. The injunction was ultimately overturned by a Florida judge.

Click on the link to access the CMS physician dataset.

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Filed under Independent Medical Examinations (IME), Insurance Fraud

Jacksonville Chiropractor Arrested for Fraudulent Billing Scheme

Chiropractor Steven Rhodes faces a maximum of five years in prison after being arrested for a fraudulent billing scheme targeting multiple insurance companies.

Jeff Atwater, Florida’s Chief Financial Officer, announced the arrest earlier this week.

Ocean View Health, Inc., a Jacksonville Beach medical clinic owned by Rhodes, was used to generate fraudulent or inflated invoices. Allegations include charges for treatments never provided to clients, the submission of inflated numbers of treatments when medical treatment was provided, and the use of unlicensed staff in performing medical services.

“This kind of fraudulent activity places honest, hard-working Floridians at risk not only financially, but also physically,” said CFO Atwater. “I am proud of our investigative team for uncovering this scam and holding this fraudster accountable for his misdeeds.”

Insurance carriers affected by the scam include Kemper, State Farm, Nationwide, Esurance, Progressive, United Health, and Blue Cross Blue Shield.

Rhodes was booked into the Duval County Jail and released on bail.

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Filed under Insurance Fraud

Florida Speed Limits May Rise to 75 MPH

Posted speed limits on I-95 and other Florida interstate highways could increase from 65 to 75, if legislation introduced in the Florida legislature by Florida Senator Jeff Clemens (D-Lake Worth) passes.

Senate Bill 392 would allow the Department of Transportation to raise the maximum allowable speed limit on certain highways like Interstate 95 that are part of the National System of Interstate and Defense Highways and have at least four lanes.

There are critics on both sides of the proposed speed limit changes.

Senator Clemens claims that drivers are already traveling at speeds in excess of the posted speed limits, and does not anticipate any increase in the number of accidents. Others fear that any increase in speed limits will result in increased accidents.

Speeding is the third leading contributing factor in traffic crashes, according to the National Highway Traffic Safety Administration.

The Insurance Institute for Highway Safety reports that the likelihood of being severely injured or killed in a crash increases with vehicle speeds.

The www.FLPIPGuide.com reported in a December 27post that Florida Ranks #6 in Worst Drivers Nationally. As mentioned in that article, auto insurance premiums tend to increase as safe driving habits decline in a state. Florida ranks among the top 10 most expensive states for car insurance, at #10, according to a 2012 article in the Palm Beach Post.

SB 392 is scheduled for at least one more vote in the Florida Senate before moving on to the House. If passed, the law would take effect on July 1, 2014.

Click on the link to read the proposed bill on Florida speed limits.

Click on the link to read a fact sheet on speed and safety published by the National Safety Council.

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Filed under Fla. Stat. 627.736 (2008)