FBI Investigating Medicare Fraud In Louisville

Federal officials announced today a nationwide sweep led by the Medicare Fraud Strike Force in 17 federal districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings.

Here in Louisville. Acting United States Attorney John E. Kuhn, Jr. announced the results of a health care fraud sweep in the Western District of Kentucky. The three day sweep resulted in charges against 12 individuals, including three medical physicians, for their alleged participation in health care fraud schemes, involving approximately $7.8 million in fraudulent billings.

Dr. Jaime Guerrero, age 47, a physician with offices in Louisville, Kentucky, and Jeffersonville, Indiana, was charged with prescribing pain medications that resulted in the deaths of five patients, unlawful distribution or dispensing of controlled substances and health care fraud, has also been charged with conspiracy, money laundering and an additional count of health care fraud, according to Acting United States Attorney John E. Kuhn, Jr.  Guerrero is accused of conspiring with others to knowingly and intentionally distribute and dispense, schedule II and III controlled substances to patients, without a legitimate medical purpose and beyond the bounds of professional medical practice.

Kelly Lenning, age 44, of Jefferson County, Kentucky, has been charged in a six count federal indictment with scheming to defraud a health care benefit program, in connection with the delivery of and payment for health care benefits, items, and services.  Specifically, while manager of Injury Rehab Specialists of Lou., PLLC a medical practice that treated motor-vehicle-accident patients, Lenning is accused of unlawfully using former employees’ (nurse practitioners) DEA numbers to order controlled substance prescriptions by directing two individuals to fill Hydrocodone prescriptions between May and August of 2013. The individuals allegedly provided the filled Hydrocodone prescriptions to Lenning, for her own personal use, while she knew the individuals used Humana insurance, to pay for the unlawful prescriptions.  If convicted at trial, Lenning could be sentenced to no more than 36 years in prison, and fined $1.5 million.

AUSA Kuhn also announced the indictment and arrests of owners and staff of Louisville area chiropractic clinics and a medical billing corporation on charges of health care fraud and identity theft. The scheme involved unsuspecting chiropractors, patients, insurance companies, and area employers – namely Jeffboat, LLC located in Jeffersonville, Indiana. Over an eight-month-long period, the defendants are accused of scheming to fraudulently bill insurance companies $5 million for services never performed that cost Jeffboat a loss of approximately $1.3 million.

According to the eight count indictment, beginning no later than November 25, 2013, and continuing through July 18, 2014, five named defendants recruited unsuspecting chiropractors to either open chiropractic clinics or to staff existing chiropractic clinics in the Louisville area. Their intent was to fraudulently bill insurance companies from the clinics.  Each chiropractor provided his/her National Provider Identifier (NPI) number to defendants Claudia Lopez and Oskel Lezcano in order to credential the clinics with various insurance companies.  Thereafter, the defendants recruited employees from Jeffboat and others to seek chiropractic services from the clinics.  However, unbeknownst to the patients and the chiropractors, the clinics billed over $5,000,000 for methocarbamol injections (a muscle relaxant), using the patients’ names, dates of birth, insurance/policy numbers, addresses, and patient IDs/Social Security Numbers without the patients’ knowledge and for injections that were never provided.

The clinics used Lezcano’s billing companies, Gold Hands Medical Billing Corp and Gold Hands Medical Billing B, Inc., to process the fraudulent billings for payment through Jeffboat’s third-party administrator, United Health Care Services, Inc. In addition, multiple clinics billed for the fraudulent injections using the same patients’ names.

Claudia Lopez, Oskel Lezcano, Ariel Borrego-Hernandez, Sergio Betancourt, and Ledinson Chavez operated and controlled multiple chiropractic clinics in the Louisville area including: Xpress Diagnostics Center, Inc.; Prudential Chiropractic Medical Center, PLLC; Klondike Chiropractic Medical Center, LLC; Be Well Chiropractic Center, Corp.; Chiropractic and Medical Center, LLC, even though the clinics were placed in various chiropractors’ names.

All five defendants are charged with one count of health care fraud. Lopez and Lezcano are both charged with additional counts of aggravated identity theft. If convicted at trial, the defendants could be sentenced to no more than ten years in prison, a $250,000 fine and a three year period of supervised release. Defendant Lopez could be sentenced to an additional 4 years in prison and fined an additional $500,000 for a conviction on the identity theft charges.  Defendant Lezcano could be sentenced to an additional 10 years in prison and fined an additional $500,000 for a conviction on the identity theft charges.

In addition, the Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority as provided in the Affordable Care Act. This coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and loss amount.

Joining in the announcement by FBI Director James B. Comey were Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG) and Deputy Administrator and Director of CMS Center for Program Integrity Shantanu Agrawal, M.D.

The defendants are charged with various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and pharmacy fraud. More than 44 of the defendants arrested are charged with fraud related to the Medicare prescription drug benefit program known as Part D, which is the fastest-growing component of the Medicare program overall.

According to court documents, the defendants participated in alleged schemes to submit claims to Medicare and Medicaid for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, Medicare beneficiaries and other co-conspirators allegedly were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $712 million in fraudulent billing.

“The people charged in this case targeted the system each of us depends on in our most vulnerable moments,” said Director James Comey. “Health care fraud is a crime that hurts all of us and each dollar taken from programs that help the sick and the suffering is one dollar too many.”

“Every day, the Criminal Division is more strategic in our approach to prosecuting Medicare Fraud,” said Assistant Attorney General Caldwell. “We obtain and analyze billing data in real-time. We target hot spots—areas of the country and the types of health care services where the billing data shows the potential for a high volume of fraud—and we are speeding up our investigations. By doing this, we are increasingly able to stop schemes at the developmental stage, and to prevent them from spreading to other parts of the country.”

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since their inception in March 2007, Strike Force operations in nine locations have charged over 2,300 defendants who collectively have falsely billed the Medicare program for over $7 billion.

Including today’s enforcement actions, nearly 900 individuals have been charged in national takedown operations, which have involved more than $2.5 billion in fraudulent billings. Today’s announcement marks the first time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.

U.S. Attorney Kuhn acknowledged and credited the law enforcement agencies  investigating these cases: Federal Bureau of Investigation (FBI), the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG), the U.S. Drug Enforcement Administration (DEA), the United States Postal Inspection Service, the Internal Revenue Service Criminal Investigation, the National Insurance Crime Bureau, FDA – Office of Criminal Investigations, Kentucky State Police (KSP), Indiana and Kentucky Medicaid Fraud Control Units, Warren County Drug Task Force and  Louisville Metro Police Department.

The court documents for each case will posted online, as they become available, here: http://www.justice.gov/opa/documents-and-resources-june-2015-medicare-fraud-strike-force-press-conference.

The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty.