Fraud within federal healthcare programs costs taxpayers billions of dollars annually and can put the health and welfare of beneficiaries at risk. The Centers for Medicare and Medicaid Services (CMS) puts an enormous amount of trust in their medical providers, expecting physicians and other related providers to provide ethical, high-quality patient medical care and to submit honest claims. In today’s “Fraud of the Day” case, we examine how a former Alabama state representative from Hartselle, who owned a company that provided chronic care management (CCM) to government healthcare beneficiaries, committed healthcare fraud. (It cost the government more than $150,000.)
Here’s a little background on Chronic Care Management (CCM), which can include services like monitoring and updating comprehensive care plans, making appointments and requesting prescriptions. CMS pays for CCM under specific guidelines. In general, if a Medicare or Medicaid beneficiary has two or more chronic conditions that are expected to last for at least a year or until their death, the government healthcare program will pay primary care practitioners to manage the beneficiary’s care. The man at the center of today’s fraud case owned a company to handle this by contracting with primary care physicians. The doctors’ companies would pay the state representative’s company to provide the CCM services to the doctors’ patients, services were provided, then the doctors would bill Medicare for the services. (The doctors paid the State representative’s company a share of the Medicare reimbursements received.)
Additional research shows that the politician got into trouble when he and a Huntsville physician entered into an agreement with the CCM company to provide CCM services to her patients. The article states that the doctor paid the CCM company $23 per month per patient that received reimbursement from Medicare. The state representative paid for a full-time employee to work at the doctor’s office to encourage the doctor to refer patients to the CCM company. (It’s important to note that the doctor did not collect co-pays from patients referred to the CCM company. That means Medicare most likely footed the bill for unnecessary services.)
The other indictment mentioned involves a Montgomery doctor who got into trouble for illegal drug distribution, healthcare fraud and money laundering. The state representative’s company directly paid a member of this physician’s staff and provided free medical billing services and free clinical services unrelated to the CCM charges. The company owner also paid kickbacks to patients who enrolled in the CCM program. (It’s like a self-licking ice cream cone. Perhaps he wasn’t satisfied with his state representative salary and thought he’d help himself to more government funds.) The current case was uncovered during the investigation of the Montgomery doctor.
The high-profile state representative originally pleaded “not guilty” in the Medicare fraud case, but reconsidered when he was offered a plea deal that waives 17 counts in the indictment and 15 counts in a related indictment. (I’m sure he’s hoping to get a lighter sentence due to his willingness to cooperate.) When sentenced, the Huntsville doctor will probably get a reduced sentence due to her cooperation in the case. Her maximum sentence would have been five years behind bars and a fine of up to $250,000. The state representative is looking at a maximum of a decade behind bars in addition to fines and restitution. In light of today’s case, it’s ironic that the state representative is a very outspoken member of the legislature who criticized a fellow representative for their corruption. (No more ice cream for you Mr. State Representative. Looks like your fraud scheme has been licked by the government.)
Today’s “Fraud of the Day” is based on an article entitled, “Former Alabama lawmaker Ed Henry files notice of guilty plea,” posted on AL.com on January 9, 2019.
Former state Rep. Ed Henry of Hartselle intends to change his plea from not guilty to guilty in a federal case involving alleged health care fraud, according to a court document.
Henry’s lawyer, Maxwell Pulliam, filed the notice of the intent to change plea in U.S. District Court in Montgomery today.