Hundreds of Medical Professionals Charged in Largest Healthcare Fraud Takedown in American History

Federal takedown is considered the largest healthcare fraud in history.

The Department of Justice (DOJ) has charged hundreds of medical professionals in what was dubbed “the largest healthcare fraud takedown operation in American history.” The DOJ brought charges against 601 defendants (76 of whom are doctors) for their alleged participation in schemes to bill Medicare, Medicaid, TRICARE, and private insurers for medications and treatments that were unnecessary and often never provided.

Over a quarter of these defendants were charged for alleged involvement in prescribing and distributing opioids and other dangerous narcotics. Specifically, the takedown included 84 opioid cases involving more than 13 million illegal dosages of opioids. The DOJ also alleged that co-conspirators received kickbacks for supplying beneficiary information to providers, which used the information to submit fraudulent bills to Medicare.

All told, the DOJ estimated over $2 billion in false billings arising from these frauds. The takedown also produced another impressive statistic when it resulted in 2,700 people being excluded from participation in Medicare, Medicaid, and all other federal health insurance programs.                      

We will focus on four of the 601 defendants to provide a glimpse of some of the individuals caught in DOJ’s dragnet and the specific charges brought against them.

  • Zachary Bird was charged in a six-count indictment with allegedly distributing and dispensing controlled substances not for a legitimate medical purpose and outside the usual course of professional practice. Bird is an anesthesiologist who operated a pain management clinic called Physicians Wellness and Pain Specialists (PWPS) in Tampa. According to court documents, this clinic functioned as a “pill mill” where Bird prescribed large quantities of opiates to his patients. Specifically, from January 2015 to the end of May 2018, Bird allegedly prescribed approximately 5.2 million tablets of hydrocodone, methadone, morphine, and oxycodone at PWPS. Bird was arrested on June 25, 2018.
  • Omar Zoobi, a pharmacist and co-owner of Metro Pharmacy and Metro RX Pharmacy LLC, and Gregory Sikorski, a physician’s assistant, were named in a 10-count indictment charging each with one count of conspiracy to commit healthcare fraud and wire fraud, four counts of healthcare fraud, and one count of conspiracy to defraud the United States and pay and receive healthcare kickbacks. Zoobi was also charged with two counts of paying healthcare kickbacks and Sikorski was charged with two counts of receiving healthcare kickbacks. The charges stem from a scheme wherein Zoobi and another co-conspirator allegedly paid kickbacks to Sikorski in return for prescribing medically unnecessary compounded creams that were billed by Metro and Metro RX to Medicare. Metro and Metro RX also billed Medicare for prescription drugs that were not dispensed or were not dispensed as prescribed, the indictment alleges. As a result of these actions, from approximately January 2012 through February 2018, Medicare paid Metro and Metro RX approximately $5,511,963.53.
  • Michael Frey has pleaded guilty to two counts of conspiracy to receive healthcare kickbacks. In addition to his guilty plea, Frey has agreed to a civil settlement under which he will pay the U.S. $2.8 million to resolve allegations that he violated the False Claims Act in a number of ways, including receiving illegal kickbacks and ordering medically unnecessary laboratory tests. During the relevant period, Frey was a practicing interventional pain management specialist and one of the two principal owners of Advanced Pain Management Specialists, P.A. in Fort Myers, Fla. Beginning in 2010, Frey is alleged to have conspired with the owners of A&G Spinal Solutions, LLC, a durable medical equipment provider, to receive compensation in exchange for referrals to A&G Spinal. Frey was allegedly paid a percentage of A&G Spinal’s profits based on his referrals and referrals from other providers at Advanced Pain. A&G Spinal allegedly rewarded Frey through checks made payable to his wife, creating the impression that Mrs. Frey was an employee of A&G Spinal when she was not. The two principals of A&G Spinal, Ryan Williamson and William Pierce, have pleaded guilty to conspiring to pay healthcare kickbacks to Frey and are currently awaiting sentencing. In addition, from 2013 to 2015, Frey also is alleged to have received cash payments from Williamson in exchange for referrals of compound pharmaceutical pain cream prescriptions. Williamson has also pleaded guilty for his role in this arrangement. In his plea agreement, Frey also admitted that he had received kickbacks in the form of speaker fees paid to him in connection with his participation in largely bogus Insys Therapeutics, Inc. events. Insys manufactures a fentanyl sublingual spray known as SUBSYS. Insys allegedly paid kickbacks to Frey to induce him to write prescriptions for their product. 

    The civil settlement also resolves allegations that, between 2013 and 2016, Frey caused the submission of false claims to Medicare and TRICARE by ordering definitive urine drug testing (UDT) in circumstances in which such testing was not reasonable and medically necessary. In addition, the civil settlement resolves kickback allegations associated with anesthesia services provided by Anesthesia Partners of SWFL, LLC, which was owned by Frey and his partner Dr. Jonathan Daitch. Anesthesia Partners provided anesthesia services exclusively for the procedures performed by the Advanced Pain physicians. They contracted with certified registered nurse anesthetists (CRNAs) to provide the anesthesia services. These CRNAs were paid a contracted rate, and Anesthesia Partners would bill Medicare and TRICARE directly for the anesthesia services they provided. This arrangement resulted in improper reimbursements to Frey as one of the owners of Anesthesia Partners.

Again, these are but four of the 601 defendants charged as part of last week’s takedown.

According to the DOJ, this historic and wide-reaching enforcement action – a coordinated effort between the DOJ, Federal Bureau of Investigation (FBI), U.S. Department of Health and Human Services (HHS), Drug Enforcement Administration (DEA), U.S. Department of Labor, Internal Revenue Service (IRS), 30 state Medicaid Fraud Control Units (MFCUs), and other state and federal agencies (including 58 U.S. Attorney’s Offices) – is just the beginning. The DOJ has a new data analytics team, the Opioid Fraud and Abuse Detection Unit, designed to identify medical professionals associated with high volumes of drug prescriptions, dispensations, and patient overdoses. In addition, U.S. Attorney General Jeff Sessions has assigned a dozen prosecutors to focus exclusively on opioid and drug-related healthcare fraud. Describing opioid addiction as “the deadliest drug epidemic in the history of this country,” Attorney General Sessions affirmed the DOJ’s particular focus in this space:

“Our work is not finished. We are just getting started. We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”

If, as DOJ suggests, this historic takedown is just the tip of the iceberg, many medical professionals and healthcare providers in pain management clinics, pill mills, and pharmacies dispensing opioids may well be arranging deck chairs on the Titanic.

 

Comment on this article

Print Friendly, PDF & Email
Facebook
Twitter
LinkedIn

Mary Inman, Esq.

Mary Inman is a partner and co-founder of Whistleblower Partners LLP, a law firm dedicated to representing whistleblowers under the various U.S. whistleblower reward programs. Mary and her colleagues have pioneered a series of successful whistleblower cases against prominent health insurers, hospitals, provider groups, and vendors under the False Claims Act alleging manipulation of the risk scores of Medicare Advantage patients. Mary is a recognized expert and frequent author, commentator, and speaker on frauds in the healthcare industry, particularly those exposed by whistleblowers. Mary is a member of the RACmonitor editorial board and a popular panelist on Monitor Monday.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

The Inpatient Admission Order: Master the Who, When, and How

The Inpatient Admission Order: Master the Who, When, and How

During this webcast Dr. Ronald Hirsch delves into the inpatient admission order process including when to get it, when it becomes effective, its impact on billing and payment, who can write it, how to cancel it, the effects on the beneficiary, and more. You’ll leave with a clear understanding of inpatient orders and guidelines for handling improper orders that you can implement immediately.

June 20, 2024
Navigating AI in Healthcare Revenue Cycle: Maximizing Efficiency, Minimizing Risks

Navigating AI in Healthcare Revenue Cycle: Maximizing Efficiency, Minimizing Risks

Michelle Wieczorek explores challenges, strategies, and best practices to AI implementation and ongoing monitoring in the middle revenue cycle through real-world use cases. She addresses critical issues such as the validation of AI algorithms, the importance of human validation in machine learning, and the delineation of responsibilities between buyers and vendors.

May 21, 2024
Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Frank Cohen shows you how to leverage the Comprehensive Error Rate Testing Program (CERT) to create your own internal coding and billing risk assessment plan, including granular identification of risk areas and prioritizing audit tasks and functions resulting in decreased claim submission errors, reduced risk of audit-related damages, and a smoother, more efficient reimbursement process from Medicare.

April 9, 2024
2024 Observation Services Billing: How to Get It Right

2024 Observation Services Billing: How to Get It Right

Dr. Ronald Hirsch presents an essential “A to Z” review of Observation, including proper use for Medicare, Medicare Advantage, and commercial payers. He addresses the correct use of Observation in medical patients and surgical patients, and how to deal with the billing of unnecessary Observation services, professional fee billing, and more.

March 21, 2024
Comprehensive Inpatient Clinical Documentation Integrity: From Foundations to Advanced Strategies

Comprehensive Inpatient Clinical Documentation Integrity: From Foundations to Advanced Strategies

Optimize your inpatient clinical documentation and gain comprehensive knowledge from foundational practices to advanced technologies, ensuring improved patient care and organizational and financial success. This webcast bundle provides a holistic approach to CDI, empowering you to implement best practices from the ground up and leverage advanced strategies for superior results. Participants will gain actionable insights to improve documentation quality, patient care, compliance, and financial outcomes.

June 26, 2024
Advanced Inpatient Clinical Documentation Integrity: Harnessing Technology, Analytics, and Compliance

Advanced Inpatient Clinical Documentation Integrity: Harnessing Technology, Analytics, and Compliance

Join expert Angela Comfort, MBA, RHIA, CDIP, CCS, CCS-P., as she helps you navigate advanced inpatient CDI technologies, regulatory changes, and system interoperability. Angela will provide actionable strategies for integrating AI and predictive analytics into CDI practices, ensuring seamless system interoperability, and maintaining compliance with evolving regulations. Attendees will learn to select and implement advanced EHR systems and CDI software, leverage data analytics to enhance documentation accuracy, and stay audit-ready with the latest compliance updates. Real-world case studies and practical tools will empower you to drive continuous improvement in CDI, improve patient outcomes, and enhance organizational efficiency. Don’t miss this opportunity to advance your CDI practices and stay ahead in this dynamic field.

July 11, 2024
Foundations of Inpatient Clinical Documentation Integrity: Enhancing Accuracy and Compliance

Foundations of Inpatient Clinical Documentation Integrity: Enhancing Accuracy and Compliance

Join expert Angela Comfort, MBA, RHIA, CDIP, CCS, CCS-P, for an insightful webcast on improving inpatient clinical documentation integrity (CDI). Inaccurate documentation can lead to misdiagnosis, improper treatment, and compromised patient safety. High workloads, lack of standardized practices, and outdated EHR systems contribute to these issues, affecting care quality and financial outcomes. Angela will offer practical strategies and tools to enhance accuracy, consistency, and timeliness in documentation. Attendees will learn to use standardized templates, checklists, and advanced EHR systems, while staying compliant with regulations. Improve patient care, ensure accurate billing, and reduce audit risks with actionable insights from this essential webcast.

June 26, 2024
Mastering E/M Coding: Navigating the Evolving Landscape

Mastering E/M Coding: Navigating the Evolving Landscape

Join industry expert, Kathy Pride, RHIT, CPC, CPMA, CCS-P, for an in-depth exploration of Evaluation and Management (E/M) coding, tailored for healthcare professionals navigating recent guideline changes. Dive into advanced topics beyond mere code selection, including shared visits, criteria for selecting E/M levels, and documentation best practices. Gain clarity on complex guideline terminology and ensure compliance with regulatory standards. This comprehensive session is essential for coders, auditors, educators, and practitioners seeking to enhance their proficiency in E/M coding and maximize revenue capture.

June 19, 2024

Trending News

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

Honor Memorial Day with Savings! Get 20% off all items using code MEMORIAL24 at checkout. Shop today and save! Offer valid until May 31. Exclusions apply.

Happy World Health Day! Our exclusive webcast, ‘2024 SDoH Update: Navigating Coding and Screening Assessment,’  is just $99 for a limited time! Use code WorldHealth24 at checkout.