Federal Fraud Task Force Has Largest Takedown To Date

On February 17, 2011, the Medicare Fraud Strike Force (Strike Force) conducted the largest single-day takedown related to healthcare fraud and abuse in US. history.1  The Strike Force, a coalition that combats healthcare fraud through the combined efforts of personnel from the Federal Bureau of Investigation (FBI), the Department of Justice (DOJ), and Health and Human Services (HHS) Office of Inspector General (OIG), arrested and charged 111 people with over $225 million in fraud related allegations.2  Strike Force teams currently operate in the seven following US\. cities: Miami, Los Angeles, Detroit, Houston, Brooklyn, Tampa and Baton Rouge.3  More than 700 law enforcement agents at both the federal and local level participated in the arrests that took place in nine metropolitan areas throughout the U.S.4

Allegations against physicians, nurses, healthcare organization owners, and executives span various realms of fraud: conspiracy to defraud Medicare, criminal false claims, anti-kickback violations, money laundering, and aggravated identity theft.5 The majority of the allegations involve Medicare billing that the defendant fraudulently submitted for medically unnecessary services or services never actually performed.6 For example, a Detroit-area podiatrist was charged with billing 18 toenail removal procedures for a single patient, and a Brooklyn proctologist was accused of breaking up procedures into smaller charges in an attempt to bill more to Medicare.7   An investigation into a Houston physical-therapy practice alleged that patients were given financial kickbacks in exchange for their Medicare and Medicaid information, which the practice subsequently used to bill for fictitious physical therapy services.8  The Strike Force also discovered inappropriate kickbacks in Dallas and Miami, where 53 defendants purportedly enticed patients to accept unnecessary home-health services and then billed the government for those services.9  Enforcement officials made arrests in over 30 additional schemes in Los Angeles, Tampa, and Baton Rouge.10

According to HHS Secretary Kathleen Sebelius, the fraudulent activities from the February 17 takedown alone represented approximately one-fourth of the $4 billion taxpayer dollars recovered from anti-fraud and abuse efforts in 2010.11 On the same day as the takedown, Secretary Sebelius announced that the seven-city Strike Force will expand its operations to the large metropolitan areas of Chicago and Dallas in 2011.12

1  “Medicare Fraud Strike Force Charges 111 Individuals for More Than $225 Million in False Billing and Expands Operations to Two Additional Cities” U.S. Department of Health and Human Services, Press Release, February 17, 2011, http://www.hhs.gov/news/press/2011pres/02/20110217a.html, (Accessed 2/21/11).

2  “Medicare Fraud Strike Force Takes Down 111 Individuals for More Than $225 Million in Fraud Schemes” American Health Lawyers Association, Vol. IX, No. 7, February 18, 2011.

3  “Medicare Strike Force Expands Operations,” http://www.stopmedicarefraud.gov/heatsuccess/taskforces.html (Accessed 03/15/11)

4  “Medicare-Fraud Suspects Arrested as U.S. Expands Task Force in Crackdown” By Justin Blum, Bloomberg News, February 17, 2011, http://www.bloomberg.com/news/2011-02-17/medicare-fraud-suspects-are-said-to-be-arrested-as-u-s-expands-task-force.html (Accessed 2/21/11).

5  “Medicare-Fraud Suspects Arrested as U.S. Expands Task Force in Crackdown” By Justin Blum, Bloomberg News, February 17, 2011, http://www.bloomberg.com/news/2011-02-17/medicare-fraud-suspects-are-said-to-be-arrested-as-u-s-expands-task-force.html (Accessed 2/21/11).

6  “Medicare Fraud Strike Force Charges 111 Individuals for More Than $225 Million in False Billing and Expands Operations to Two Additional Cities”, Press Release, U.S. Department of Health and Human Services, February 17, 2011, http://www.hhs.gov/news/press/2011pres/02/20110217a.html, (Accessed 2/21/2011).

7  “Medicare-Fraud Crackdown Corrals 114” Mark Schoofs, et al., Wall Street Journal, February 18, 2011, http://online.wsj.com/article/SB10001424052748704657704576150293189313156.html (Accessed 2/21/11).

8  “Medicare-Fraud Crackdown Corrals 114” Mark Schoofs, et al., Wall Street Journal, February 18, 2011, http://online.wsj.com/article/SB10001424052748704657704576150293189313156.html (Accessed 2/21/2011).

9  “Medicare-Fraud Crackdown Corrals 114” Mark Schoofs, et al., Wall Street Journal, February 18, 2011, http://online.wsj.com/article/SB10001424052748704657704576150293189313156.html (Accessed 2/21/11).

10  “Medicare-Fraud Crackdown Corrals 114” Mark Schoofs, et al., Wall Street Journal, February 18, 2011, http://online.wsj.com/article/SB10001424052748704657704576150293189313156.html (Accessed 2/21/11).

11  “Health Care Fraud Prevention and Enforcement Efforts Recover Record $4 Billion; New Affordable Care Act Tools Will Help Fight Fraud” U.S. Department of Health and Human Services, Press Release, January 24, 2011, http://www.hhs.gov/news/press/2011pres/01/20110124a.html (Accessed 2/21/11).

12  “Medicare Fraud Strike Force Charges 111 Individuals for More Than $225 Million in False Billing and Expands Operations to Two Additional Cities” U.S. Department of Health and Human Services, Press Release,  February 17, 2011, http://www.hhs.gov/news/press/2011pres/02/20110217a.html (Accessed 2/21/11).

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Todd A. Zigrang

Todd A. Zigrang, MBA, MHA, CVA, ASA, FACHE, ABV, is the President of Health Capital Consultants (HCC), where he focuses on the areas of valuation and financial analysis for hospitals, physician practices, and other healthcare enterprises. Mr. Zigrang has over 28 years of experience providing valuation, financial, transaction and strategic advisory services nationwide in over 2,000 transactions and joint ventures. Mr. Zigrang is also considered an expert in the field of healthcare compensation for physicians, executives and other professionals.

Mr. Zigrang is the co-author of "The Adviser’s Guide to Healthcare – 2nd Edition" [2015 – AICPA], numerous chapters in legal treatises and anthologies, and peer-reviewed and industry articles such as: The Accountant’s Business Manual (AICPA); Valuing Professional Practices and Licenses (Aspen Publishers); Valuation Strategies; Business Appraisal Practice; and, NACVA QuickRead. In addition to his contributions as an author, Mr. Zigrang has served as faculty before professional and trade associations such as the American Society of Appraisers (ASA); the National Association of Certified Valuators and Analysts (NACVA); Physician Hospitals of America (PHA); the Institute of Business Appraisers (IBA); the Healthcare Financial Management Association (HFMA); and, the CPA Leadership Institute.

Mr. Zigrang holds a Master of Science in Health Administration (MHA) and a Master of Business Administration (MBA) from the University of Missouri at Columbia. He is a Fellow of the American College of Healthcare Executives (FACHE) and holds the Certified Valuation Analyst (CVA) designation from NACVA. Mr. Zigrang also holds the Accredited Senior Appraiser (ASA) designation from the American Society of Appraisers, where he has served as President of the St. Louis Chapter. He is also a member of the America Association of Provider Compensation Professionals (AAPCP), AHLA, AICPA, NACVA, NSCHBC, and, the Society of OMS Administrators (SOMSA).

Jessica L. Bailey-Wheaton

Jessica L. Bailey-Wheaton, Esq., is Senior Vice President and General Counsel of HCC. Her work focuses on the areas of Certificate of Need (CON) preparation and consulting, as well as project management and consulting services related to the impact of both federal and state regulations on healthcare transactions. In that role, Ms. Bailey-Wheaton provides research services necessary to support certified opinions of value related to the Fair Market Value and Commercial Reasonableness of transactions related to healthcare enterprises, assets, and services.

She serves on the editorial board of NACVA’s The Value Examiner and is the current Co-Chair of the American Bar Association (ABA) Health Law Section’s Membership Committee and the Young Lawyer Division (YLD) Liaison to the ABA Health Law Section Governing Council. She has previously presented before the ABA, American Health Law Association (AHLA). NACVA, the National Society of Certified Healthcare Business Consultants (NSCHBC), and the American College of Surgeons.

Ms. Bailey-Wheaton is a member of the Missouri and Illinois Bars and holds a J.D., with a concentration in Health Law, from Saint Louis University School of Law.

Janvi R. Shah

Janvi R. Shah, MBA, MSF, serves as Senior Financial Analyst of HCC. Mrs. Shah holds a M.S. in Finance from Washington University Saint Louis. She develops fair market value and commercial reasonableness opinions related to healthcare enterprises, assets, and services. In addition she prepares, reviews and analyzes forecasted and pro forma financial statements to determine the most probable future net economic benefit related to healthcare enterprises, assets, and services and applies utilization demand and reimbursement trends to project professional medical revenue streams and ancillary services and technical component (ASTC) revenue streams.

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