klong100EDITOR’S NOTE: Each month we will publish a summary of fraud cases as reported by the Office of Inspector General and the Department of Justice. These findings are available to RACmonitor and MICMonitor readers, courtesy of DesionHealth. You can hear Karen Long’s report weekly on “Monitor Monday.”

New reports of charges, arrests or sentencing of health care providers for fraud or HIPAA violations are released almost daily. The Office of Inspector General at the U.S. Department of Health and Human Services has stepped up its compliance training for providers and expects the providers to do the same at their offices.

Also adding to the trend of increased enforcement is the government’s focus on reducing improper payments to save federal dollars.

The following are the results of several of those investigations:


  • Pittsburgh hospital employee pleads guilty to HIPAA charge. A former employee at UPMC Shadyside hospital in Pittsburgh pleaded guilty to knowingly disclosing patient health information to another person in violation of HIPAA, according to the U.S. Attorney in Western Pennsylvania. While working at the hospital, Paul Pepala shared patients’ names and social security numbers, which were then used to file unauthorized tax returns seeking tax refunds in 2008. Pepala faces up to one year in prison and a fine of $50,000 at his Oct. 20 sentencing.
  • Maryland hospital to pay $1.8 million to settle False Claims Act allegations. Peninsula Regional Medical Center did not take the steps necessary to prevent medically unnecessary cardiac stent procedures by a doctor who was convicted of inserting the stents, ordering unnecessary tests and falsifying patient records, the U.S. Attorney’s Office in Maryland states. The U.S. Attorney’s office states that senior medical staff did not follow up on staff complaints about the unnecessary procedures. The hospital also entered into a corporate integrity agreement with the Department of Health and Human Services’ Office of Inspector General “to ensure accurate billing.”


  • Drug ring busted in Florida. Thirty-two people, including 13 doctors, were snagged in an investigation related to illegal distributions of pain killers and steroids in south Florida, according to the U.S. Attorney there. The charges include racketeering conspiracy, money laundering conspiracy and possession with intent to distribute controlled substances. The operation distributed more than 20 million Oxycodone pills and made more than $40 million from illegal sales, the attorney’s office states.
  • Biller at physician office to spend more than three years in jail. A Maine woman responsible for billing at a physician’s office has been sentenced to three years and one month in prison, according to news reports. An independent audit of the practice’s records showed billing for more extensive exams than were performed, billing for procedures that weren’t performed and altering medical records, resulting in more than $300,000 in overpayments, states the U.S. Attorney’s Office in Maine. Dawn Zehrung, also known as Dawn Glover, has to pay more than $355,000 in restitution, the news reports state.
  • Pennsylvania doctor one of 53 defendants indicted in multi-million dollar fraud scheme. As part of the scheme described in a 498-count indictment, fake patients would pay a $150 fee to the staff at physician Norman Werther’s office, then Werther would write prescriptions for the fake patients for Oxycodone-based drugs, according to the U.S. Attorney in the Eastern District of Pennsylvania. The prescriptions would be filled and then the drugs would be sold, the U.S. Attorney’s office states. Three of Werther’s office staffers were also indicted.
  • Two physicians charged with dispensing controlled substances that resulted in four deaths. Sam Jahani, 49, of Cleveland, Texas, and Eric Peper, 53, of Summerland Key, Fla., were indicted Aug. 3 on charges stemming from fraud that occurred in Colorado, the U.S. Attorney’s Office in Colorado states. The doctors allegedly prescribed controlled substances including Oxycodone, Vicodin and Xanax “without determining a sufficient medical necessity” or without following “the usual course of professional practice,” the U.S. Attorney states.
  • Four doctors part of 26 charged in fraud scheme. Four Detroit physicians were paid “kickbacks, bribes and other inducements” by pharmacists to write prescriptions and bill Medicare, Medicaid and private insurances regardless of whether the services were medically necessary, the Justice Department alleges. The doctors then would direct patients to fill the prescriptions at certain pharmacies owned by another man named in the 34-count indictment. The pharmacists would fill the prescriptions and bill Medicare, Medicaid and private insurances though the medications were not medically necessary or provided, the Justice Department states. The pharmacies billed Medicare $37.7 million as part of the scheme, which began in January 2006.

  • Maryland cardiologist convicted in insurance fraud scheme. John McLean, 59, of Salisbury “submitted insurance claims for inserting unnecessary cardiac stents, ordered unnecessary tests and made false entries in patient medical records,” according to the U.S. Attorney’s Office in Maryland.
  • Physicians accused of improperly spending grant money. As much as $13.6 million given to physicians to bolster rural healthcare in Louisiana following Hurricane Katrina was improperly awarded to physicians who weren’t qualified for the money, HHS’ Office of Inspector General states in a July report. The money was to be used for paying off student loans, offsetting malpractice payments and relocation costs for physicians who agreed to practice in greater New Orleans for at least three years after the storm. Of 100 physicians reviewed by OIG, only 33 were found to be in compliance with the requirements of the federal grant. The 67 not in compliance that were actually reviewed received $3.1 million in federal funds. The $13.6 million in alleged overpayments arrived at by the OIG were the result of an extrapolation of the sample findings to show 509 providers were improperly paid.

Home Health

  • Mother and son charged with home health fraud. A Miami mother and son who owned Angie’s Home Health Care were sentenced prison for 71 months and 57 months, respectively, and ordered to pay more than $1.5 million in restitution, according to the U.S. Attorney’s Office in South Florida. The agency provided services that were not medically necessary and billed Medicare. The son also instructed patients to provide false information, and nurses and recruiters were paid kickbacks to get beneficiaries to agree to be treated by the agency.
  • Miami home health nurse convicted of healthcare fraud. Armando Santos, 46, was sentenced to 10 years in prison after convictions on one count of conspiracy to commit health care fraud, four counts of health care fraud and two counts of false statements related to health care matters, according to the U.S. Attorney’s Office in the Southern District of Florida. Santos submitted $230,315 in false claims to Medicare, including claims that he had provided twice-daily insulin injections to two patients who were not homebound or in need of those services, the U.S. Attorney states. The owners of Ideal Home Health where Santos worked have been charged in connection with the scheme.
  • Husband and wife indicted in connection with Miami home health fraud scheme. Elizabeth Acosta Sanz and Luis Alejandro Sanz were charged with conspiracy to commit health care fraud, health care fraud, conspiracy to pay kickbacks, payment of kickbacks, conspiracy to commit money laundering and money laundering, according to the U.S. Attorney’s Office in the Southern District of Florida. The couple offered kickbacks to recruiters, instructed nurses to falsify patient medical records and submitted $11.3 million in false claims to Medicare, the U.S. Attorney’s Office states.
  • U.S. intervenes in whistleblower case against a Kentucky home health agency. Two former employees of Nurses’ Registry and Home Health Corporation in Lexington, Ky., allege that the agency “exaggerated the medical conditions and needs of its patients for home health care services” to inflate their payments, according to a Justice Department press release. The original lawsuit was filed in March 2008.
  • Patient recruiter pleads guilty July 21 in $25 million Medicare fraud scheme. Vicente Guerra-Nistal, 54, of Miami was a patient recruiter for ABC Home Health Care in Miami, which billed Medicare for physical therapy and home health services that weren’t medically necessary or weren’t performed, according to a Justice Department statement. Twenty other co-conspirators were charged as part of the scheme that billed Medicare about $194,000, the Justice Department states. Guerra-Nistal faces up to 10 years in prison plus fines and penalties.

Durable Medical Equipment

  • Three people including pastor convicted in $14.2 million durable medical equipment (DME) scheme. Christopher Iruke, 60, and Connie Ikpoh, 49, are a married couple who were pastors at a Los Angeles church and owners of fraudulent DME companies, according to the Justice Department. Along with Aura Marroquin, 30, they “billed Medicare for power wheelchairs, orthotics and other DME that were not medically necessary or never provided,” the Justice Department states.
  • Louisiana DME company owner sentenced to prison. Thompson Chinwoh, 57, of Baton Rouge was sentenced July 18 to four years in prison for submitting claims for expensive durable medical equipment, such as back and knee braces, that were not medically necessary or prescribed for the patients, according to the U.S. Attorney’s Office in the Middle District of Louisiana. A federal judge also ordered Chinwoh to pay $878,280 in restitution plus an additional $878,280.




  • $3 million Medicare Part D scheme results in two arrests. Luba Balyasny, 46, and Alla Shrayber, 40, both of Brooklyn, N.Y., were arrested July 26 and charged with conspiracy to commit health care fraud for allegedly submitting false claims through two pharmacies, states the U.S. Attorney’s Office in the Eastern District of New York. The pair allegedly submitted the claims for medications they did not buy or give to beneficiaries. They face 10 years in prison if convicted.
  • Pharmacist pleads guilty July 19 to false claims submission. Earnest McGee, 40, of Dorchester, Mass., paid customers to bring prescriptions to the Codman Square Pharmacy in Dorchester but didn’t provide the medicines to the customers, according to the U.S. Attorney’s Office in Massachusetts. McGee and another employee also bought prescriptions from Medicaid beneficiaries. McGee faces up to 10 years in prison and a $250,000 fine at his sentencing in October.

The cases above show that government enforcement of fraud and abuse laws and HIPAA regulations is increasing, and providers need to ensure their compliance programs will protect them.

About the Author

Karen Long is the compliance product manager for DecisionHealth and oversees products that relate to fraud and abuse and HIPAA compliance for physician offices and home health agencies, and accreditation compliance for hospitals. In her almost four years at DecisionHealth, Karen also has been the compliance editor and a reporter for Home Health Line, nation’s leading independent authority on home healthcare business, regulation and reimbursement.

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