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busted: top five fraud busts of Q4 2017

January 03, 2018

When Santa made his list this past Christmas, the vast majority of healthcare providers were nice, but a small handful of them were … fraudy. Okay, that was a pretty bad joke, but not nearly as bad as the alleged healthcare fraud schemes that the National Health Care Anti-Fraud Association compiled from October through December 2017. Here’s our round-up of the top five busts made by the feds in recent months.

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New York diagnostic testing scheme: $44 million 

Three defendants who collectively owned 10 diagnostic testing facilities in Brooklyn allegedly submitted false claims to Medicare, Medicaid, and other public healthcare programs over three years. The U.S. Attorney’s office says the trio paid kickbacks in exchange for patient referrals and misrepresented which company actually performed the services. They’re facing charges of healthcare fraud, making false claims to a federal agency, conspiracy to pay healthcare kickbacks, and money laundering.

Texas fitness therapy scheme: $25 million 

A Texas fitness trainer allegedly misrepresented himself as a healthcare provider when submitting more than $25 million in fraudulent claims to insurance companies. The trainer, who offered in-home fitness training and therapy, was paid nearly $4 million over the past five years by large national health plans. He faces up to 10 years in prison.

California sleep testing scheme: $11 million 

A clinic owner and UPS driver were indicted in December for allegedly offering cash to patients for participating in a sleep study. According to the Justice Department, the sleep study tests were either medically unnecessary or not performed at all. As a result, the clinic billed various healthcare benefit programs, including those for UPS and Costco employees, more than $11 million. Each of the defendants is charged with 11 counts of healthcare fraud.

Illinois home sleep testing fraud: $9 million 

The federal government is suing Illinois-based SNAP Diagnostics, accusing the company of fraudulently billing Medicare for medically unnecessary sleep apnea testing and inducing physicians with kickbacks to refer all their home sleep testing services to the company. According to the lawsuit, SNAP only provided non-Medicare beneficiaries one night of testing but billed Medicare for up to three nights per beneficiary. Medicare began to cover home sleep testing in 2009.

Multi-state workers’ comp scheme: $7.5 million 

Federal authorities say the owner of two physical therapy clinics defrauded the federal workers’ compensation program for services that weren’t provided as required. The clinics’ clients include federal agencies, primarily the U.S. Postal Service, serving patients in both Texas and Utah. The owner is also facing an identity theft charge for allegedly enrolling his clinics in the workers’ comp program by submitting a doctor’s license information without permission.


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As director of product marketing, Warren Lesnefsky is responsible for the go-to-market planning and execution of Verscend’s Payment Accuracy solutions. He brings nearly 20 years of healthcare marketing experience in leading cross-functional teams to successfully launch information technologies and analytic services to the payer and provider markets. Prior to joining Verscend in 2015, Warren held various marketing management roles at McKesson Health Solutions with a wide range of responsibilities covering events management, marketing communications, and product marketing. He holds a BA in Marketing from the University of Northern Colorado.

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