Federal prosecutors allege that this nurse practitioner ordered more genetic tests for Medicare beneficiaries than any other provider during 2020
Cases of Medicare fraud involving clinical laboratory testing continue to be prosecuted by the federal Department of Justice. A jury in Miami recently convicted a nurse practitioner (NP) for her role in a massive Medicare fraud scheme for millions of dollars in medically unnecessary genetic testing and durable medical equipment. She faces 75 years in prison when sentenced in December.
In their indictment, federal prosecutors alleged that from August 2018 through June 2021 Elizabeth Mercedes Hernandez, NP, of Homestead, Florida, worked with more than eight telemedicine and marketing companies to sign “thousands of orders for medically unnecessary orthotic braces and genetic tests, resulting in fraudulent Medicare billings in excess of $200 million,” according to a US Department of Justice (DOJ) news release announcing the conviction.
“Hernandez personally pocketed approximately $1.6 million in the scheme, which she used to purchase expensive cars, jewelry, home renovations, and travel,” the press release noted.
Hernandez was indicted in April 2022 as part of a larger DOJ crackdown on healthcare fraud related to the COVID-19 outbreak.
“Throughout the pandemic, we have seen trusted medical professionals orchestrate and carry out egregious crimes against their patients all for financial gain,” said Assistant Director Luis Quesada (above) of the FBI’s Criminal Investigative Division, in a DOJ press release. Clinical laboratory managers would be wise to monitor these Medicare fraud cases. (Photo copyright: Federal Bureau of Investigation.)
Nurse Practitioner Received Kickbacks and Bribes
Federal prosecutors alleged that the scheme involved telemarketing companies that contacted Medicare beneficiaries and persuaded them to request genetic tests and orthotic braces. Hernandez, they said, then signed pre-filled orders, “attesting that she had examined or treated the patients,” according to the DOJ news release.
In many cases, Hernandez had not even spoken with the patients, prosecutors said. “She then billed Medicare as though she were conducting complex office visits with these patients, and routinely billed more than 24 hours of ‘office visits’ in a single day,” according to the news release.
In total, Hernandez submitted fraudulent claims of approximately $119 million for genetic tests, the indictment stated. “In 2020, Hernandez ordered more cancer genetic (CGx) tests for Medicare beneficiaries than any other provider in the nation, including oncologists and geneticists,” according to the news release.
The indictment noted that because CGx tests do not diagnose cancer, Medicare covers them only “in limited circumstances, such as when a beneficiary had cancer and the beneficiary’s treating physician deemed such testing necessary for the beneficiary’s treatment of that cancer. Medicare did not cover CGx testing for beneficiaries who did not have cancer or lacked symptoms of cancer.”
In exchange for signing the orders, Hernandez received kickbacks and bribes from companies that claimed to be in the telemedicine business, the indictment stated.
“These healthcare fraud abuses erode the integrity and trust patients have with those in the healthcare industry … the FBI, working in coordination with our law enforcement partners, will continue to investigate and pursue those who exploit the integrity of the healthcare industry for profit,” said Assistant Director Luis Quesada of the Federal Bureau of Investigation’s Criminal Investigative Division, in the DOJ press release.
Conspirators Took Advantage of COVID-19 Pandemic
Prosecutors alleged that as part of the scheme, she and her co-conspirators took advantage of temporary amendments to rules involving telehealth services—changes that were enacted by Medicare in response to the COVID-19 pandemic.
The indictment noted that prior to the pandemic, Medicare covered expenses for telehealth services only if the beneficiary “was located in a rural or health professional shortage area,” and “was in a practitioner’s office or a specified medical facility—not at a beneficiary’s home.”
But in response to the pandemic, Medicare relaxed the restrictions to allow coverage “even if the beneficiary was not located in a rural area or a health professional shortage area, and even if the telehealth services were furnished to beneficiaries in their home.”
Hernandez was convicted of:
One count of conspiracy to commit healthcare fraud and wire fraud.
Four counts of healthcare fraud.
Three counts of making false statements.
Medscape noted that she was acquitted of two counts of healthcare fraud. The trial lasted six days, Medscape reported.
Hernandez’s sentencing hearing is scheduled for Dec. 14.
Co-Conspirators Plead Guilty
Two other co-conspirators in the case, Leonel Palatnik and Michael Stein, had previously pleaded guilty and received sentences, the Miami Herald reported.
Palatnik was co-owner of Panda Conservation Group LLC, which operated two genetic testing laboratories in Florida. Prosecutors said that Palatnik paid kickbacks to Stein, owner of 1523 Holdings LLC, “in exchange for his work arranging for telemedicine providers to authorize genetic testing orders for Panda’s laboratories,” according to a DOJ press release. The kickbacks were disguised as payments for information technology (IT) and consulting services.
“1523 Holdings then exploited temporary amendments to telehealth restrictions enacted during the pandemic by offering telehealth providers access to Medicare beneficiaries for whom they could bill consultations,” the press release states. “In exchange, these providers agreed to refer beneficiaries to Panda’s laboratories for expensive and medically unnecessary cancer and cardiovascular genetic testing.”
Palatnik pleaded guilty to his role in the kickback scheme in August 2021 and was sentenced to 82 months in prison, a DOJ press release states.
Stein pleaded guilty in April and was sentenced to five years in prison, the Miami Herald reported. He was also ordered to pay $63.3 million in restitution.
These federal cases involving clinical laboratory genetic testing and other tests and medical equipment indicate a commitment on the DOJ’s part to continue cracking down on healthcare fraud.
Federal agents allege ‘healthcare fraud abuses erode the integrity and trust patients have with those in the healthcare industry’
Here’s yet another example of how federal and state law enforcement agencies intend to further crack down on fraud involving COVID-19 testing, financial relief programs, vaccination cards, and other pandemic-related programs.
The United States Department of Justice (DOJ) announced it has charged the owners of a Calif. clinical laboratory—as well as 19 other defendants—for their roles in fraudulent billing, kickbacks, and money laundering schemes to defraud Medicare of more than $214 million.
Imran Shams and Lourdes Navarro—owners of Matias Clinical Laboratory, Inc., in Baldwin Park, Glendale, Calif.—which was doing business as Health Care Providers Laboratory, Inc. (Matias)—were charged along with the other defendants with participating in fraud that took place in nine federal court districts.
The indictment alleges the pair paid kickbacks to marketers to obtain specimens and test orders. The lab company owners then laundered their profits through shell corporations in the US, transferred the money to foreign countries, and used it to purchase “real estate, luxury items, and goods and services for their personal use,” according to court documents.
“While millions of Americans were suffering and desperately seeking testing and treatment for COVID-19, some saw an opportunity for profit,” said Assistant Attorney General for the Criminal Division Kenneth A. Polite Jr., JD, during a news conference at the Justice Department, The New York Times reported.
“The actions of these criminals are unacceptable, and the FBI, working in coordination with our law enforcement partners, will continue to investigate and pursue those who exploit the integrity of the healthcare industry for profit,” said Luis Quesada of the Federal Bureau of Investigation’s (FBI) Criminal Investigative Division in a press release.
“Throughout the pandemic, we have seen trusted medical professionals orchestrate and carry out egregious crimes against their patients all for financial gain,” said Assistant Director Luis Quesada (above) of the FBI’s Criminal Investigative Division in a DOJ press release. “These healthcare fraud abuses erode the integrity and trust patients have with those in the healthcare industry, particularly during a vulnerable and worrisome time for many individuals.” Clinical laboratories throughout the US should be aware of increased scrutiny to Medicare billing by the DOJ. (Photo copyright: El Paso Times.)
According to the DOJ’s Summary of Criminal Charges, “Matias” Clinical Laboratory also “performed and billed Medicare for urinalysis, routine blood work, and other tests, despite the fact that Shams had been excluded from all participation in Medicare for several decades.” The indictment alleges that Shams and Navarro fraudulently concealed Sham’s role in the clinical laboratory and his prior healthcare-related criminal convictions.
“She always tried to follow the law and provide appropriate and quality testing services to the laboratory’s patients. She looks forward to clearing her name in court,” Werksman said.
However, both Navarro and Shams have a checkered past with law enforcement agencies. According to a State of California Department of Justice news release, in 2000, the two were convicted in California on felony counts of Medi-Cal fraud, grand theft, money laundering, and identity theft for using the names of legitimate physicians without permission and filing thousands of false claims with the state for medical tests never performed.
The Calif. Attorney General’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA) seized approximately $1.1 million in uncashed warrants, which were returned to the Medi-Cal program. Since the 2000 case, Shams has been barred from filing for Medicare reimbursement, the New York Times reported.
Other Felony Indictments and Criminal Complaints for Healthcare Fraud
In a separate case, the DOJ announced Ron K. Elfenbein, MD, 47, of Arnold, Md., was charged by indictment with three counts of healthcare fraud in connection with an alleged scheme to defraud the US of more than $1.5 million in claims that were billed in connection with COVID-19 testing. Elfenbein is owner and medical director of Drs Ergent Care, LLC, which operates as FirstCall Medical Center. Elfenbein allegedly told his employees to submit claims to Medicare and other insurers for “moderate-complexity office visits” even though the COVID-19 test patients’ visits lasted five minutes or less.
And in April, the DOJ filed a criminal complaint against Colorado resident, Robert Van Camp, 53, for allegedly forging and selling hundreds of fake COVID-19 vaccination cards, which he sold to buyers and distributors in at least a dozen states.
“Van Camp allegedly told an undercover agent that he had sold cards to ‘people that are going to the Olympics in Tokyo, three Olympians and their coach in Tokyo, Amsterdam, Hawaii, Costa Rica, Honduras,’” the DOJ said in a news release, CNBC reported.
Van Camp also allegedly told that agent, “I’ve got a company, a veterinary company, has 30 people going to Canada every f— day, Canada back. Mexico is big. And like I said, I’m in 12 or 13 states, so until I get caught and go to jail, f— it, I’m taking the money, (laughs)! I don’t care,” the DOJ stated.
Clinical laboratory directors and pathologists know these fraud charges provide another example of how the misdeeds of a few reflect on the entire healthcare industry, potentially causing people to lose trust in organizations tasked with providing their healthcare.