Legal Services for Blood Labs
The Health Law Group has provided representation to medical facilities, diagnostic centers, clinics, and labs in business transactions, government investigations, and criminal proceedings. Our attorneys have defended countless blood lab owners and operators over the years. Our experts are here to help you and your practice stay informed and avoid litigation.
What is Considered “Health Care Fraud” in a Blood Lab?
In order to be convicted of health care fraud, you must defraud a health care benefit program. Liability for this crime extends to the fraud of both private and public insurance programs and this statute’s protections extend to both the person receiving and providing a beneficial service.
Medical providers can commit health care fraud by:
- billing for services not rendered;
- submitting multiple claims for the same service; or
- submitting charges for procedures or treatments that are deemed unnecessary.
As the health care industry continues to experience substantial growth and benefit programs expand, accusations of fraud are bound to increase.
Health Care Fraud Defined – 18 U.S.C. § 1347
Health care fraud is defined as the execution of a scheme or plan with the intent of defrauding benefit programs related to health services. Health care fraud also exists when an individual uses false pretenses to obtain money or property belonging to public or private benefits program.
According to 18 U.S.C § 1347, in order to be convicted of health care fraud, you must:
- Knowingly and willfully execute a scheme;
- To defraud a health care benefit program; or
- Obtain through false pretenses, money or property belonging to a health care benefit plan
Call 844-239-1234
for a Free Confidential Case Review
An individual convicted of violating 18 U.S.C § 1347 may be imprisoned for a period not to exceed ten years, fined, or both. Furthermore, if the violation results in death, the violator may face life in prison. With such serious consequences, it is vital that you retain an experienced health care fraud attorney as soon as possible.
What is “The Anti-Kickback Statute?” – 42 U.S.C. §1320a-7b
42 U.S.C § 1320a-7b, also known as the Anti-Kickback Statute, prohibits the exchange of anything of value for referrals for services, payable through a government healthcare program (usually Medicare).
This means that anyone who solicits or receives a remuneration of any kind in exchange for referring a patient for services for which a federal healthcare program pays or for purchasing an item or service for which a federal healthcare program pays.
The statute is long and exhaustive, covering nearly every conceivable incantation for fraudulent acts involving federal healthcare benefit programs. Once it can be shown that there were knowledge and willingness, both parties involved may be charged criminally.
Penalties for Violating the Anti-Kickback Statute
Penalties for violating the Anti-Kickback Statute may include:
- Fines of up to $25,000;
- Imprisonment for a period not to exceed five (5) years;
- Or both.
In many cases a violation of the Anti-Kickback Statute may also result in a violation of the False Claims Act, leading to liability for fraud. The Anti-Kickback Statute is criminal in nature but also provides criminal and civil penalties for violators.
Other agencies may also be able to pursue civil remedies. The Office of the Inspector General (OIG) and the Department of Health and Human Services (DHHS) may attempt to impose penalties of a maximum of $50,000 per violation, in addition to three (3) times any government overpayment.
What is “Stark Law?” – 42 U.S.C. 1395nn
42 U.S.C § 1395nn, also known as the “Stark Law,” is aimed at preventing fraud through conflicts of interest between physicians and referring entities.
According to the statute, it is a violation of the Stark Law for a physician to refer a patient for a designated health service (paid for by Medicare/Medicaid) if the physician – or a member of the physician’s immediate family – has a financial relationship with the entity conducting the health service.
The maximum penalty for violations of this act is a fine of $15,000 per violation.
What are the Differences Between Anti-Kickback Statute and Stark Law?
- Stark Law Imposes Only Civil Liability. The Stark Law is exclusively civil in nature, while the Anti-Kickback Statute is applied in both criminal and civil proceedings. Similar to the Anti-Kickback Statute, under the Stark Law the OIG and DHS are free to pursue civil monetary penalties against you, such as denial of payment, fines, and reimbursement. On the other hand, the Anti-Kickback Statute provides for criminal punishment in addition to civil sanctions.
- Stark Law is a Strict Liability Crime. Unlike the Anti-Kickback Statute, the Stark Law is a strict liability statute; meaning knowledge and intent are irrelevant to a determination of guilt or innocence. This fact has an effect on the defenses that are available to defendants who have been charged with a Stark Law violation because no defenses of lack of knowledge or intent are available. However, a person must have knowingly violated the law in order to receive a civil monetary penalty.
- Stark Law Exceptions. There are exceptions to the Stark Law for certain types of physician referrals. An exception exists when a medical group is allowed to make referrals for supplementary services such as radiology or laboratory services. Other exceptions to the Stark Rule involve fair market compensation for referrals as well as the possibility for indirect or non-monetary compensation. Because these exceptions to the Stark Law are very narrow, an experienced legal professional is essential to navigating the complex minefield of regulations.
- Prohibited Referrals. The Stark Law only pertains to referrals from physicians. On the other hand, the Anti-Kickback Statute applies to referrals from anyone. This means that only physicians can violate the Stark Law’s self-referral prohibitions.
- Stark Law Applies to Reimbursements from Medicare/Medicaid. While the Stark Law is limited to an express list of Designated Health Services like Medicare and Medicaid, the federal Anti-Kickback Statute applies to all government funded health care programs. This means that the Stark Law is more narrowly tailored, or limited, in terms of applicable federal health care programs. An express list of the “Designated Health Services” involved can be found below.
Express List of Services Involved in Stark Law Violations
Stark Law applies to an express list of “Designated Health Services” (“DHS”) including:
- Clinical laboratory services;
- Physical therapy services;
- Occupational therapy services;
- Outpatient speech-language pathology services;
- Radiology and imaging services;
- Radiation therapy services;
- Durable medical equipment and supplies;
- Parental nutrients, equipment, and supplies;
- Prosthetics, orthotics, and prosthetic devices and supplies;
- Home health services;
- Outpatient prescription drugs; and
- Inpatient and outpatient hospital services.
What Agencies Investigate Health Care Fraud?
A vast array of federal, local, and state agencies is tasked with investigating accusations of health care fraud. These agencies include:
- The Defense Criminal Investigative Service (“DCIS”)
- The Federal Bureau of Investigation (“FBI”)
- The Department of Health and Human Services (“DHHS”)
- Office of Inspector General (“OIG”)
- Medicaid Fraud Control Unit (“MFCU”)
- Internal Revenue Service (“IRS”)
- U.S. Department of Labor (“DOL”)
- Division of Pensions and Financial Transactions (State Attorney General’s Office)
- Medicaid Fraud Working Group
- Department of Social Services (“DSS”)
- Department of Public Health (“DPH”)
- Department of Consumer Protection (“DCP”)
The complex web of laws and regulations surrounding health care may lead to the involvement of many different agencies. In many cases there is collaboration among several agencies, leading to a substantial amount of resources being used to prosecute you. With so many experienced government officials working against you, you need an experienced professional on your side.
Call 844-239-1234
for a Free Confidential Case Review
How Do I Defend Myself Against An Accusation Of Health Care Fraud?
The best way to defend against an accusation of health care fraud will depend largely on the statute under which you are charged.
- Safe Harbors of the Anti-Kickback Statute. If you have been charged under the Anti-Kickback Statute, you may be able to claim one of the statute’s “safe harbors.” These safe harbors allow for certain referral arrangements. Some exempted types of agreements include:
- payments made for practitioner recruitment
- payment made for the lease of equipment or office space, and
- referrals that come about as a result of an employment or professional services agreement.
- Lack of Knowledge or Intent. Since the Anti-Kickback Statute is not a strict liability statute, an accused individual may argue a lack of knowledge or intent. This is in contrast to a Stark Law Violation, where intent and knowledge of the crime are irrelevant to a determination of guilt or innocence.
Because of the various nuances of safe harbor provisions, it behooves an individual accused under this statute to seek experienced legal representation.
Health Care Fraud Cases in the News
President of New Jersey Clinical Laboratory and his Brother, A Senior Employee, Sentenced to Prison in $100m+ Test Referral/Bribery Scheme (2018)
David Nicoll, the president of Biodiagnostic Laboratory Services LLC (BLS), and his brother Scott were sentenced to seventy-two (72) and forty-three (43) months in prison after each pleaded guilty to one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and an additional money laundering count.
The two brothers participated in a conspiracy using the New Jersey-based BLS to pay bribes to physicians for blood sample referrals. The wide-reaching investigation has led to the conviction of thirty-eight (38) doctors among fifty-three (53) total defendants involved in the scheme.
This scheme resulted in the illegal reimbursement by Medicare for over $100 million in payments, over $15 million of which has been recovered through forfeiture. This is believed to be the largest number of medical professionals prosecuted for bribery in one case.
To read the official Department of Justice press release, please follow the link below:
Cedar Grove Doctor Sentenced to Two Years in Prison for Accepting Bribes for Test Referrals to Clinical Laboratory (2014)
Dennis Aponte, a Cedar Grove, New Jersey physician was sentenced to twenty-four (24) months in prison for his part in a health care fraud case. Aponte pleaded guilty to violating the Federal Travel Act. From October of 2012 until March of 2013, Aponte accepted cash bribes from Biodiagnostic Laboratory Services LLC (BLS) in exchange for referring blood specimens from his practice.
BLS paid Aponte about $3,000 per month. BLS made more than $175,000 off of the specimens sent by Aponte. In addition to the term of imprisonment, Aponte was given a year of supervised released and ordered to pay a $50,000 fine and forfeit $235,000.
To read the official Federal Bureau of Investigation press release, please follow the link below:
Two Arrested in Illegal Kickbacks Case Involving Clinical Laboratory Testing (2014)
David Brock Lovelace and Dale B. DuBois were arrested and charged with conspiracy to defraud Medicare and pay illegal kickbacks. Lovelace was already facing charges of health care fraud and money laundering in a Tampa federal court. DuBois was a managing member of Healthcare Marketing Florida LLC (HMF).
Lovelace and DuBois paid kickbacks to various medical clinics in Miami-Dade County. The two were paid in DNA test samples and other patient information, and they subsequently provided that information to laboratory companies for them to submit to Medicare for reimbursement. Over a fourteen (14) month period, the scheme was so intense that Lovelace and DuBois received nearly $700,000 from just one laboratory company.
This case was brought under the Medicare Fraud Strike Force (MFSF). The MFSF operates in nine (9) cities nationwide and has charged almost two-thousand (2,000) defendants with over $6 billion in fraudulent charges for federal healthcare benefits. The Federal Bureau of Investigation, the Department of Health and Human Services, and the Office of the Inspector General, amongst others, investigated the case.
To read the official Federal Bureau of Investigation press release, please follow the link below:
Aurora Health Care, Inc. Agrees to Pay $12 Million to Settle Allegations Under the False Claims Act and the Stark Law (2018)
Aurora Health Care (Aurora) has agreed to pay $12 million to the U.S. and the State of Wisconsin as part of a settlement over allegation arising under the False Claims Act and the Stark Law. Aurora is an integrated health care system servicing parts of Wisconsin, Illinois, and Michigan. The investigation began as a result of a whistleblower lawsuit.
It is alleged that during a four-year period from 2008 until 2012, Aurora entered into compensation agreements with physicians, which were not in compliance with Stark Law provisions.
This non-compliance stems from arrangements, which are not commercially reasonable, by providing compensation in excess of the fair market value of the services rendered. Furthermore, these agreements took into account physicians anticipated referrals, not for identifiable services.
To read the official Department of Justice press release, please follow the link below:
Three Charged with Violating Federal Anti-Kickback Laws and Committing More Than $4.7 Million in Health Care Fraud (2018)
Christopher Parks, Dr. Gary Lee, and Dr. Jerry Keepers were indicted and charged with violation of the federal anti-kickback statutes in addition to charges for conspiracy to commit health care fraud. According to the indictment, Parks and Lee conspired to pay illegal kickbacks to doctors in order to induce them into writing compounding prescriptions to pharmacies associated with the defendants.
The defendants would subsequently submit extremely large claims for payment to Medicare and other federal health care programs as well as private insurers, and divide the proceeds amongst themselves. Because the prescriptions were written for compounding medication, the reimbursement is more likely to be approved and is more expensive than a normal prescription.
Physicians were given pre-printed prescription pads that had compounding medications as the preferred selection. The payments made to these physicians were disguised through bogus business agreements and other arrangements. Sometimes physicians would be paid for acting as medical directors for pharmacies, even though they provided no services to the pharmacy.
What is the indictment for this case?
Keepers is charged with soliciting and receiving nearly $900,000 in illegal bribes and kickbacks from Parks and Lee. By the end of the scheme, Parks and Lee had defrauded federal health care programs to the tune of at least $4.7 million.
The defendants face up to five years in prison and a $250,000 fine for conspiracy to violate the anti-kickback statutes, while the actual violation of the said act is up to ten years in prison and a fine not to exceed $100,000. Furthermore, a health care fraud conviction carries up to a ten-year prison sentence, or twenty years if the case results in injury or death.
To read the official Department of Justice press release, please follow the link below:
Our attorneys have been successfully representing parties’ accused of health care fraud for many years. If you are under investigation or formally charged with a crime, communicating with the various federal, state, and local officials can be a frightening and confusing process. Proceeding through the investigation process without the proper legal representation can even expose you to further liability.
If you have been accused of committing health care fraud in relation to your work in a blood center, please contact one of our skilled and experienced attorneys today.