Spring 2015
Volume 4, Issue 2



For years now, the Government has been combating Medicare and Medicaid fraud in a joint venture by the Department of Health and Human Services (HHS) and the Department of Justice (DOJ). The joint venture is known as the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative. In recent years, the HEAT initiative has intensified due to its many successes, which have led to a recovery of more than $14.8 billion in cases involving fraud against federal health care programs.

The focus on preventing Medicare and Medicaid fraud, waste and abuse has led to many arrests and convictions in New Jersey over the past year. In combating fraud, waste and abuse, the Government relies on the False Claims Act (“FCA”) and Anti-Kickback Statute (“AKS”) to prosecute physicians. Whenever a physician is the target of a FCA or AKS investigation, the New Jersey State Board of Medical Examiners (“Board”) is often notified by the investigating agents. Often, physicians are forced to fight a war on two fronts; one against the Medicare or Medicaid authorities and one against the Board. Below are some examples of recent legal enforcement actions taken by the Office of Inspector General (“OIG”) and the New Jersey Attorney General’s Office, all of which will likely be accompanied by an inquiry from the Board.

UNLICENSED FORMER DOCTOR AND HUSBAND INDICTED FOR FRAUDULENT BILLING  Acting New Jersey Attorney General Hoffman and the Office of the Insurance Fraud Prosecutor (“OIFP”) announced that an unlicensed former doctor and her husband were indicted on March 25, 2015 for billing a medical insurance company more than $172,000.00 for treatments that were not rendered to patients.

The unlicensed physician, who previously surrendered her medical license in New Jersey as a result of an arrest for obtaining a controlled dangerous substance by fraud, and her husband, were indicted by the state grand jury for second-degree conspiracy, second-degree health care claims fraud and second-degree theft by deception. The unlicensed physician was also indicted for third-degree practice of medicine by an unlicensed person.

OIFP is alleging that during the years 2012 through 2014, Anthem Blue Cross and Blue Shield was billed approximately $172,626.00 for lymphatic therapy on two (2) patients when the therapy was, in fact, not actually performed. 

The indictment is merely an accusation and the defendants are presumed innocent until proven guilty. Second-degree crimes carry a maximum sentence of ten (10) years in state prison and a criminal fine of up to $150,000.00, while third-degree crimes carry a maximum sentence of five (5) years in prison and a fine of up to $15,000.00. 

The former doctor is likely to be called to appear before the Board, as the Board takes matters where a physician is indicted, or where any individual who has surrendered a medical license, or who has had a license to practice suspended or revoked, practices medicine in the State of New Jersey, very seriously.


DOCTOR IN NEW JERSEY SENT TO PRISON FOR TAKING KICKBACKS It was recently announced that a physician practicing family medicine in East Orange, New Jersey, was sentenced to nine (9) months in prison for receiving cash kickbacks for diagnostic testing referrals. The physician was further found guilty of failing to file tax returns on almost $1 million in income over a three (3) year period. The physician had previously pled guilty before the Honorable Claire C. Cecchi, a United States District Judge sitting in the United States District Court for the District of New Jersey, to a six (6) count superseding indictment charging the physician with conspiracy to violate the AKS and soliciting and receiving more than $10,000.00 in illegal cash kickbacks for patient referrals in violation of that statute.

MULTIPLE PHYSICIANS UNDER SCRUTINY FOR RECEIVING ALLEGED UNLAWFUL INCENTIVES  It was recently announced that New Jersey will receive a total of $690,000.00 as a result of its participation in a global settlement with pharmaceutical manufacturer Daiichi Sankyo, Inc., which has its headquarters in Parsippany, New Jersey.

The settlement resolves allegations that the company committed FCA violations by using lavish meals and speaker program honoraria as kickback vehicles to induce physicians to prescribe its drugs Azor, Benicar, Tribenzor and Welchol.

The allegations came to light after a former salesman filed a whistleblower’s complaint alleging that health insurance claims related to drugs manufactured by Daiichi Sankyo were false because they resulted from kickbacks the company had provided to physicians who prescribed the drugs. 

Physicians in New Jersey, and across the country, received the alleged kickbacks from Daiichi Sankyo in the form of honoraria payments, meals and other remuneration. “Improper incentives to health care professionals, and the alleged false insurance claims they help generate, cost us all,” said Acting New Jersey Attorney General John J. Hoffman.  

In addition to potential exposure under the anti-kickback statute, the participating New Jersey physicians identified in the investigation will likely be receiving Board inquiries for their roles in the alleged scheme and their prescribing habits will be closely scrutinized.

Far too few physicians are aware of the overwhelming weight that would befall them if targeted by the SBME. For SBME Protection go toThePAP.com.