Federal agents from the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG) and the FBI arrested four Detroit-area residents Tuesday as part of a continuing investigation into a $14.5 million home health care fraud scheme. The four individuals allegedly participated in a Medicare fraud scheme operated out of Patient Choice Home Healthcare (Patient Choice) and All American Home Care (All American), two Oakland County, Mich. home health agencies that purported to provide in-home health services, according to a DOJ news release.


Maira Suleman, 30, John Thomas, 32, Sherry Prescott, 50, and Myra Jones, 50, each were charged with conspiracy to commit healthcare fraud. Pramod Raval, M.D., 57, who previously had been charged with conspiracy to violate the anti-kickback statute, also was charged with conspiracy to commit healthcare fraud in an indictment unsealed Tuesday, according to the DOJ.


Suleman, Thomas and Prescott are alleged to have falsified medical records used to justify and/or bill services to Medicare. In addition, the indictment alleges that Jones and several other people recruited Medicare beneficiaries for the owners of Patient Choice and All American, paying the beneficiaries kickbacks for their Medicare information and their signatures on documents that detailed physical therapy services that either were never rendered or medically unnecessary.  

Pharmaceuticals and False Claims Act

Also on Tuesday, the DOJ announced that Abbott Laboratories Inc., B. Braun Medical Inc., Roxane Laboratories Inc. (now known as Boehringer Ingelheim Roxane Inc.) and affiliated entities agreed to pay $421 million to settle False Claims Act allegations. These settlements resolve claims by the federal government that the defendants engaged in a scheme to report false and inflated prices for numerous pharmaceutical products despite knowing that federal healthcare programs relied on those reported prices to set payment rates. The actual sales prices for the products were far less than what the defendants reported.

Abbott, Roxane and Braun were alleged to have created artificially inflated spreads to market, promote and sell the products to existing and potential customers. Because payment from the Medicare and Medicaid programs was based on the false inflated prices, the government alleged that the defendants caused false claims to be submitted to federal healthcare programs, resulting in millions of claims being paid in far greater amounts than they would have if Abbott, B. Braun and Roxane had reported truthful prices.

Roxane is paying $280 million to resolve claims against it and related entities (Roxane Laboratories Inc., Boehringer Ingelheim Corp. and Boehringer Ingelheim Pharmaceuticals Inc.) after the United States intervened and filed suit on Jan. 18, 2007.  It was alleged that Roxane reported false prices for the following drugs: Azathioprine, Diclofenac Sodium, Furosemide, Hydromorphone, Ipratropium Bromide, Oramorph SR, Roxanol, Roxicodone and Sodium Polystyrene Sulfonate.

Abbott is paying $126.5 million to resolve the claims against it in two qui tam cases. B. Braun Medical Inc., a U.S. subsidiary of the German pharmaceutical company B. Braun Melsungen AG, has agreed to pay about $14.7 million to resolve allegations that it caused the Medicaid program to pay inflated amounts for 49 of its drug products.

The settlements resolve allegations brought by a whistleblower under the qui tam provisions of the False Claims Act. A Florida home infusion company, Ven-A-Care of the Florida Keys Inc., and its principals filed the suits. The False Claims Act allows for private citizens to file suits to provide the government information about wrongdoing. 

Under one of the act’s statutes, if it is established that a person knowingly has submitted or caused others to submit false or fraudulent claims to the United States, the federal government can recover treble damages of $5,500 to $11,000 for each violation of the statute. If the government is successful in resolving or litigating its claims, the whistleblower who initiated the action then can receive a share ranging from 15 to 25 percent of the total amount recovered.  As part of these settlements, the Ven-A-Care whistleblowers will receive approximately $88.4 million.

The DOJ said that total recoveries in False Claims Act cases since January 2009 have topped $5.8 billion.

Meanwhile on Capitol Hill

On Monday, Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) released a committee report detailing the case of a doctor who reportedly implanted nearly 600 potentially medically unnecessary stents from 2007 through mid-2009 at St. Joseph Medical Center in Towson, Md., and his relationship with the manufacturer of the stents, Abbott Labs. 

The senators’ report found that the questionable stent implantations cost the Medicare program $3.8 million during that period. Baucus and Grassley in a news release said they initiated their inquiry as part of the committee’s oversight role of the Medicare and Medicaid programs and the senators’ efforts to protect taxpayer dollars from waste, fraud and abuse after media reports unveiled the alleged improper procedures.

The healthcare oversight report also examined the response of St. Joseph Medical Center to the discovery of the questionable implantations. The report noted that Abbott Labs placed the Maryland doctor on its “Project Victory” list of top stent volume cardiologists and paid for at least two social events at his home, including a barbeque and crab dinner in 2008. After St. Joseph Medical Center barred the doctor from practicing, Abbott Labs hired him to promote and prepare safety reports on its stents in China and Japan, according to internal documents the company provided to the committee.

In their news release, the senators noted that from fiscal year 2004 through fiscal year 2009, the Medicare Part A program paid an estimated $25.7 billion for cardiac stent procedures and approximately $108.9 billion for 6.9 million procedures related to medical devices. They said fraud, waste and abuse in the healthcare system cost Americans at least $60 billion a year – three percent of total healthcare spending. Other similar cases of apparently improper cardiac procedures have been uncovered at medical facilities across the country, they noted. Baucus and Grassley said they launched their review of this case to look for patterns that might have implications for preventing waste, fraud and abuse in Medicare and Medicaid.


U.S. Department of Justice
Senate Finance Committee

Share This Article