Friday, February 18, 2011

Crackdown on Medicare Fraud Is Picking Up Steam

Rob Riley

The U.S. government yesterday charged more than 100 health-care providers in a Medicare-fraud scheme that exceeded $225 million in false billings.

Investigators unearthed fraudulent activity in nine cities, but they did not reach into Alabama. That's bad news. Attorney General Eric Holder said a national crackdown on health-care fraud is far from over, meaning Birmingham eventually could be targeted. That's good news.

Evidence suggests that our state has a serious problem with health-care fraud, some of it apparently tied to Rob Riley, son of former Governor Bob Riley, and his associates at the University of Alabama at Birmingham (UAB).

Health-care fraud already has surfaced as an issue in Alabama, but federal investigators seem to have only scratched the surface of a large-scale problem here. Earlier this year, seven hospitals paid a total of $6.3 million to settle their part in a long-running whistleblower lawsuit regarding Medicare fraud. Two of the hospitals were in Alabama, and three other Alabama hospitals--including St. Vincent's and St. Vincent's East in Birmingham--were part of an earlier settlement in the same case.

The government now has collected $101 million in the "qui tam" lawsuit, which was originally filed in New York and has unearthed fraud at health-care facilities in at least six other states.

That case revolved around the medical-device field, and that is exactly where Rob Riley has placed his slippery tentacles. Riley is a lawyer by trade, but he seems to have a penchant for engaging in dubious business ventures. A whistleblower case filed in Birmingham alleges fraud against Performance Group LLC, a company owned in part by Riley. No substantive action has been taken in the case, largely because of some curious rulings by a federal judge with strong Republican roots, but that needs to change.

Alabama loses $1.1 billion a year to health-care fraud, and the nation loses $75 billion annually, according to a recent report in The Birmingham News. That article is dripping in irony. First, the figures come from a professor at UAB, and as we have reported here, UAB almost certainly is our state's No. 1 practitioner of health-care fraud. Second, The Birmingham News has been a stellar supporter of Bob Riley--even though federal-court documents indicate the ex-governor's son has been up to his neck in health-care fraud.

The Obama Department of Justice (DOJ), as part of its effort to reform health care, has made tackling Medicare fraud a top priority. The lawsuit against Riley and his company, Performance Group LLC, was filed during the Bush administration. Alice Martin, U.S. attorney for the Northern District of Alabama at the time, elected not to intervene in the case, probably because she wanted to help protect a political ally.

William M. Acker Jr., an 83-year-old Reagan appointee, made a number of extremely curious rulings--and  the case was dismissed without prejudice, which means it can be refiled. I've recently seen Acker operate up close, and he is a dreadful excuse for a judge. Our guess is that Acker is trying to protect Rob Riley in the whistleblower case--and possibly in my ongoing employment lawsuit against UAB, too.

Will the DOJ, now under the direction of a supposed Democrat (Eric Holder), have the guts to investigate someone who has political connections? We aren't holding our breath. But the case of Rob Riley and Performance Group is important on multiple levels.

For one, at least two of Riley's associates in the company--Drs. Thomas Spurlock and Francois Blaudeau--are affiliated with UAB. Spurlock is a faculty member in the UAB Department of Surgery and president of Alabama Pain Consultants, which is under the Performance Group LLC umbrella. That means Medicare fraud that benefits private individuals could be reaching into a public institution--one that receives massive amounts of federal and state taxpayer dollars.

If that's the case, it would not be the first time UAB has been connected to health-care fraud. The university settled a federal whistleblower case in 2005 for $3.4 million, a fraction of the actual alleged fraud. Did that wrist slap correct the fraud problem at UAB. Considering the allegations in the Performance Group LLC case, and the involvement of UAB personnel, the answer probably is no.

Performance Group LLC provides physical therapy through the use of medical devices such as back and neck braces. That is an area of health care that is ripe for fraud cases. Reports The New York Times:

The medical device business is filled with small start-up companies trying to generate excitement about their new products and technologies, hoping to build market share and to attract deep-pocketed buyout offers. It has been fraught with allegations of bribes, exaggerated claims, and other unethical behavior.

That's exactly the kind of company that Rob Riley became involved in. Did he do it because he had a genuine desire to serve patients? Or did he do it because it was a convenient way to bilk the government out of money?

The Obama DOJ needs to find answers to those questions. And it can do it by reinstating the whistleblower case against Rob Riley and Performance Group LLC. If justice is to be served, the case almost certainly will have to be removed from corrupt judge William M. Acker Jr.

How did the case wind up with Acker in the first place? For that matter, how did my employment lawsuit against UAB wind up with Acker? Federal officials might make some interesting discoveries if they do some digging on those two questions.

Riley hardly is alone in trying to make funny money off medical equipment. The charges announced yesterday indicate the problem is widespread:

The defendants were charged with various crimes, including conspiracy to defraud the Medicare program, false claims, kickbacks and money laundering, administration officials said.

They said the alleged schemes involved various medical treatments, tests and services, such as home health care, physical and occupational therapy and medical equipment.

Again, that is right up Rob Riley's alley. The general public might consider health-care fraud to be a relatively "clean" sort of crime. But that is not the case:

A top FBI official, Shawn Henry, said 2,600 health care fraud cases were under investigation and that organized crime groups have been increasingly linked to the alleged schemes.

Could organized crime be connected to health-care fraud in Alabama, some of it tied to our state's premier academic medical center? I would not doubt it. The government's Medicare Fraud Strike Force now covers nine cities, with Chicago and Dallas recently added to the list. Birmingham needs to join them--and quickly.


Anonymous said...

EVERYBODY cashes in so start breathing if you're waiting for the Holder DOJ to investigate:

•John Ashcroft: Christie’s former U.S. Justice Department boss made $28 million to $52 million or more in 18 months for monitoring Zimmer Holdings, one of five medical device manufacturers accused of giving kickbacks to surgeons for using their replacement hips and knees

Anonymous said...

Health care fraud is not a priority in the Middle District of Alabama where Leura Canary chooses to focus the investigative resources at her disposal toward political prosecutions rather than health care fraud. Holder has already demonstrated an unwillingness to replace Canary as U.S. Attorney. Given the fact that we are more than half way through a democrat administration, is there any reason to expect Holder to do anything other than what he has done so far? Look forward, not backward, not toward the left and only toward the right.

Robby Scott Hill said...

Thanks to the False Claims Acts & some very wealthy plaintiff's lawyers who aren't doing so well in state court tort actions, the qui tam field of practice is about to heat up. If DOJ refuses to join the suit, the private party & its private lawyers have the statutory authority to go ahead and act on behalf of the US Government.

Anonymous said...

It seems that Clarence Thomas has a 100 % bating average, he rules against the qui tam in ever QUI TAM suit he decides.
In his latest, axing the Qui tam Plaintiff, Dan Kirr, a Viet NAm Vet, he ruled that a jurisdictional bar applied to toss the suit, because Mr Kirk had got a FOIA response. Thus , some REPORT, thus a jurisdictional bar.(if a jurisdictional bar, the Court can not get into the meirts, so like a fraud protection ruse)
What is odd, is the Chamber of Commerce hates the 1986 False Claims Act, and files Amicus briefs in suits at the Supreme Court, to gut the ACT, its application.
Add to that, Clarence Thomas wife was a lobbyist for the Chamber of Commerce in D C.
So, is there any suit that Thomas has ruled on in a qui tam case, where he did not rule against the qui tam plaintiff..... ? Must be cool, for Thomas wife to get $500,000 from some Dallas billionaire, being reported in the News, (June 2011.)
The case Thomas just axed was
Schendler Elevator v U S ex Daniel Kerr.
Seems Odd, Congress set up an Act, and Thomas has a 100 % record of ripping it to shreds,
Who pays for that, Fellows like Mr Kerr, a Viet Nam Vet.
Does Thomas hate the 1986 False Claims Act because the Chamber of Commerce attacks it so much.
Gee, and to just note, GInni his wife was a big lobbyist with the Chamber of Commerce.
If any know of any case, where Thomas has not ruled against the qui tam plaintiff, please note, He may have a 100% record of ruling against qui tam plaintiffs.
Shocking the news has not noted, but some papers were outraged at Thomas ruling in the recent case, noted.
This story needs to be developed.
Thanks for the opportunity to comment.
IS Thomas calling the Viet Nam Vet a parasitic opportunist, since he invoked a jurisdictional bar, the implication of such moves. ?
Odd, Thomas was wearing his Black Panther garb around (at HOLY Cross),while DAN was in Viet NAM.
It is breathtaking the silence of the press on the entire matter, really all things considered.