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.