Healthcare Fraud: Braden Partners, L.P., Has Agreed to Pay To Teijin Pharma USA LLC, for Violating the False Claims Act

Oxygen Equipment Provider Pays $11.4 Million to Resolve False Claims Act Allegations

The Department of Justice announced today that Braden Partners, L.P., doing business as Pacific Pulmonary Services, has agreed to pay $11.4 million to resolve allegations against it and its general partner, Teijin Pharma USA LLC, for violating the False Claims Act by submitting claims for reimbursement to Medicare and other federal healthcare programs for oxygen and related equipment supplied in violation of program rules, and for sleep therapy equipment supplied as part of a cross-referral kickback scheme with sleep clinics.

“This settlement demonstrates our continued pursuit of health care providers who take advantage of federal healthcare programs,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will investigate and take action against providers who cut corners and pay kickbacks.”

California-based Pacific Pulmonary Services furnishes stationary and portable oxygen tanks and related supplies, and sleep therapy equipment, such as Continuous Positive Airway Pressure, Bi-level Positive Airway Pressure masks and related supplies, to patients’ homes in California and other states. The government alleged that, beginning in about 2004, Pacific Pulmonary Services began submitting claims to the Medicare, TRICARE and Federal Employee Health Benefits programs for home oxygen and oxygen equipment without obtaining a physician authorization, as required by program rules.

Beginning in 2006, certain of the company’s patient care coordinators also allegedly agreed to make patient referrals to sleep testing clinics in exchange for those clinics’ agreement to refer patients to Pacific Pulmonary Services for sleep therapy equipment. The government alleged that this conduct violated the Anti-Kickback Act, which prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and/or other federally funded programs.

“The U.S. Attorney’s Office is committed to taking all appropriate action against companies that disregard patients’ medical needs in pursuit of company profits,” said U.S. Attorney Brian J. Stretch for the Northern District of California. “Patients in federal health care programs expect and deserve medical care that is free from any undue influence and complies with the program safeguards that are in place to protect patients.”

“Home oxygen equipment and related supplies are some of the most fraudulently billed items of durable medical equipment,” said Special Agent in Charge Steven J. Ryan of the Office of Inspector General for the U.S. Department of Health and Human Services. “Medicare suppliers more concerned with profits than compliance will be met with investigation and enforcement.”

This settlement resolves allegations filed in a lawsuit by a former sales representative of Pacific Pulmonary Services, in federal court in San Francisco, California. The lawsuit was filed by Manuel Alcaine under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Mr. Alcaine will receive $1.824 million of the recovered funds.

The settlement was the result of a coordinated effort by the U.S. Attorney’s Office of the Northern District of California, the Civil Division’s Commercial Litigation Branch, the U.S. Department of Health and Human Services Office of Inspector General, and the various other agencies that administer the federal health care plans at issue.

The case is captioned United States ex rel. Alcaine v. Braden Partners, L.P., dba Pacific Pulmonary Services, et al., Case No. 10-cv-4597 (N.D. Cal.). The claims resolved by the settlements are allegations only; there has been no determination of liability.

Original PressReleases…
Oxygen Equipment Provider Pays $11.4 Million to Resolve False Claims Act Allegations
The Department of Justice announced today that Braden Partners, L.P., doing business as Pacific Pulmonary Services, has agreed to pay $11.4 million to resolve allegations against it and its general partner,

Financial Fraud: Terry Lynn and Rocky Freeland Anderson Charged to Commit Health Care Fraud, And Aggravated Identity Theft

Father and Son Charged in $16 Million Health Insurance Fraud Scheme

DALLAS – An indictment returned by a federal grand jury in Dallas this week charges Terry Lynn Anderson, 66, and Rocky Freeland Anderson, 36, of Dallas, with offenses related to their participation in an insurance fraud scheme, announced John Parker, U.S. Attorney for the Northern District of Texas.

Each defendant is charged with one count of conspiracy to commit health care fraud, ten counts of health care fraud and aiding and abetting and four counts of aggravated identity theft and aiding and abetting. Both defendants will make their initial appearances today before Magistrate Judge David L. Horan.

The indictment alleges that Terry Anderson was the owner of Anfree Incorporated, a Texas corporation that did business as Anderson Optical & Hearing Aids Center (Anderson Optical & Hearing). Terry Anderson co-operated Anderson Optical & Hearing with his son, Rocky Anderson, and both are licensed by the State of Texas as Fitters and Dispensers of Hearing Instruments. From January 1, 2011 through November 8, 2016, the defendants devised and executed a scheme to defraud Blue Cross Blue Shield of Texas (BCBS) by submitting claims for hearing aids that were not needed and, in many cases, not delivered to the BCBS subscriber. To increase the number of claims they could submit to BCBS, the defendants and their coconspirators engaged in fraudulent marketing practices.

For example, the defendants promised BCBS subscribers a free pair of high-end sunglasses or a free pair of prescription eyeglasses in exchange for taking a free hearing test. At the conclusion of these hearing tests, the defendants told subscribers that they had slight to mild hearing loss and required them to sign an order for hearing aids in order to receive the free sunglasses or prescription glasses. The defendants promised subscribers that the hearing aids would be provided to them at no cost, and that Anderson Optical & Hearing would not require the subscriber to pay any applicable copayment, coinsurance, or deductible. The defendants also offered BCBS subscribers $100 gift cards in exchange for referring family members and coworkers for free hearing tests.

The defendants took advantage of BCBS plans offered to employees of American Airlines because prior to 2014, the American Airlines insurance plans administered by BCBS had no maximum limit on the cost of hearing aids and allowed subscribers to obtain hearing aids once per plan year. In 2013, approximately 84.6% of Anderson Optical & Hearing’s total income came from BCBS and 99.7% of the BCBS payments were based on claims submitted for American Airlines employees and their dependents.

The defendants failed to conduct hearing tests that complied with BCBS’s medical policies related to the evaluation of hearing impairment. Many of the hearing tests were conducted in an employee break room at DFW Airport and lasted less than five minutes. The defendants then submitted claims to BCBS for reimbursement for hearing aids before dispensing hearing aids to the subscriber, and in some cases for hearing aids that they never delivered to the subscriber. The defendants kept lists of subscribers who had not received hearing aids despite BCBS having paid the claims. One such list contained 103 names.

The indictment also alleges the defendants falsified patient records, forged patient signatures, and attempted to dispense hearing aids and collect deductibles and coinsurance years after the subscriber was offered a free hearing test and free hearing aids.

In November 2013, BCBS conducted an audit of Anderson Optical & Hearing and requested copies of patient records for certain American Airlines employees and their dependents. On January 6, 2014, the Texas Department of State Health Services-Professional Licensing Unit (Professional Licensing Unit) conducted an investigation regarding a complaint it had received concerning the Andersons. In February 2014, when given the opportunity to respond to the complaint, the defendants submitted several patient records to the Professional Licensing Unit, including some of the same patient records that had been collected by BCBS. The patient records submitted to the Professional Licensing Unit had altered test scores, additional notations, and apparent forged signatures that were not present when the same records were submitted to BCBS in November 2013.

Anderson Optical & Hearing submitted claims to BCBS for hearing aids on behalf of American Airlines employees totaling more than $27 million, the vast majority of which were fraudulent. As a result of these claims, BCBS paid Anderson Optical & Hearing more than $16.7 million.

The indictment includes a forfeiture notice that would require the defendants, if convicted, to forfeit a 300 acre ranch in Bosque County, three vehicles, and more than $3.1 million that was seized from nine financial accounts in December 2015.

An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted, however, each count of conspiracy to commit health care fraud and substantive health care fraud count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. The aggravated identity theft counts carry a mandatory statutory penalty of two years in federal prison and a $250,000 fine.

The case is being investigated by the Federal Bureau of Investigation.

Assistant U.S. Attorney Doug Brasher is prosecuting the case.

Original PressReleases…
Father and Son Charged in $16 Million Health Insurance Fraud Scheme
DALLAS – An indictment returned by a federal grand jury in Dallas this week charges Terry Lynn Anderson, 66, and Rocky Freeland Anderson, 36, of Dallas, with offenses related to their participation in an insurance fraud scheme,