1. Virginia Attorney General Health Care Fraud and Elder Abuse Section Investigating and Prosecuting Health Care Fraud and Elder Abuse September 30, 2016 Andrew Barone Chief of Provider Fraud and Corporate Neglect Investigations

2. Overview 1.Who we are:History, Duty, and Capability 2.How we work:Coordinated Investigations – FBI, HHS-OIG, IRS, Local Law Enforcement, DEA, VSP 3.What we’ve done:Abuse/Neglect; Health Care Fraud; False Statements; Alteration of Records; Agg. I.D. Theft; Prosecuting Abuse as Fraud Cases

3. Who we are In 1982, the General Assembly created the MFCU to investigate fraud and abuse committed against the Virginia Medicaid program. “The unit will also review complaints alleging abuse or neglect of patients in health care facilities receiving payments under the State Medicaid plan and may review complaints of the misappropriation of patient’s private funds in such facilities.” 42 C.F.R. § 1007.11(b)(1) “[T]he Attorney General or his authorized representatives shall review complaints alleging abuse or neglect of persons in the care or custody of others who receive payments for providing health care services under the state plan for medical assistance.” Va. Code Ann. § 32.1-310

4. Who we are Approximately 47 full-time investigators Two Nurse Investigators Investigators with federal and state criminal investigative experience and former APS workers Six prosecutors and 17 civil attorneys Four offices: Richmond; Fairfax; Roanoke; Abingdon 2016 – Approximately 100 unit employees, three main components: Criminal Provider fraud; Elder Abuse and Neglect; Civil Litigation.

5. Who we are – what we investigate Billing for services not performed Billing for unnecessary services or tests Embezzlement Kickbacks Inflating bills for services provided Double-billing Drug Diversion

6. Who we are Coordinated, multidisciplinary investigations AG, Local law enforcement, VSP, USAO, FBI, HHS-OIG, DEA, FDA, IRS, Va. Tax, DMAS 2012-2013: 37 convictions; $1.01b in court-ordered civil and criminal recoveries 2014 Inspector General’s award for Excellence in Fighting Fraud, Waste, and Abuse 2015-2016: 41 convictions; $37,823,866 in court-ordered civil and criminal recoveries

7. Who we are The Elder Abuse and Neglect Squad was formed in 2008. The unit investigates single victim/single actor abuse and neglect of incapacitated adults committed by health care providers. The unit also investigates corporate neglect in health care facilities.

8. How we work – Identifying Relevant Material Witness interviews Identifying potential witnesses: DMAS Audit; Provider contract; SCC records; Employment records; Licensing inspections; VDH nursing home inspections; DMV records; complainants Medical records State regulatory inspections/audits Subpoena authority Audit and inspect authority Billing history Number of patients Amount billed How long they have been a provider

9. Criminal Case Studies Fraud cases: United States v. Hackett and Monroe United States v. Delores F. Thomas Abuse/Neglect cases: Commonwealth v. Richard Wagoner Commonwealth v. Arlene White and Rachel Zacarias Drug Diversion cases: United States v. Bristol Labs/ Beth Palin/Joseph Webb

10. Criminal Case Studies United States v. Hackett and Monroe Joseph T. Hackett: "Apostolic Overseer covering 30 churches, leaders and businesses in both the United States and in Africa, specifically in Nairobi, Kenya and Uganda." Intensive In-Home Therapy – mental health counseling for children Indicted – health care fraud (18 U.S.C. § 1347 ) ; paying illegal kickbacks (42 U.S.C. § 1320a-7b); $1,570,041 fraudulent gain Guilty, 48 months to serve

11. Criminal Case Studies Hackett and Monroe (cont.) Lori T. Monroe – business partner Patient Recruiter - Creed Xtreme Marketing Concepts, recruited and referred clients to Hackett's company Netted $545,410 for patient recruitment over an eight-month period Indicted for receiving illegal kickback payments (42 U.S.C. § 1320a-7b)

12. Criminal Case Studies Hackett and Monroe (cont.) Joint investigation between the AG’s office and Richmond FBI Two-year investigation: approximately 67 interviews; state search warrant (case was later adopted by the U.S. Attorney and FBI); 100s of bankers boxes of patient files; billing history and billing data Two keys: 1) interviews told the tale (Big Brother/Govt. daycare); 2) “Progress notes” were identical from child to child Patient recruitment (door-to-door) and the 12 “free weeks”

13. Criminal Case Studies United States v. Delores F. Thomas Owner/operator – New Season Clinical Services Joint investigation between AG, FBI, HHS-OIG 112 interviews: majority with parents; 13 with New Season staff Search Warrant – March 5, 2012 Hundreds of patient files and thousands of lines of billing data

14. Criminal Case Studies United States v. Delores F. Thomas Pled guilty on September 30, 2013 One – count criminal information charging health care fraud (18 U.S.C. § 1347) Fraudulent gain = $1,505,173 66 recipients with false and fraudulent prior-authorization forms The client has urinated and defecated in corners of the home’s kitchen, living room, and hallway. The client is amused when his mother discovers the waste. Mother took children to park and had to intervene after the client pushed a peer down and stuffed wood chips violently into the child’s mouth and face.

15. Criminal Case Studies Commonwealth v. Richard Wagoner Victim lived in a group home in Martinsville, diagnosed with severe intellectual disability and Parkinson’s. After incontinence episode on a couch, caretakers placed him on a toilet and left to clean up the mess. Victim ended up in a bathtub of hot water – while caretakers were cleaning the original mess. Victim sustained second and third-degree burns on his legs, buttocks, back, shoulder, and face. Started to transport to emergency care – defendant ordered staff to return victim to the facility. Defendant decided to treat victim at the facility – staff was told to apply Neosporin. Victim died of sepsis and pneumonia secondary to burns. Defendant was found guilty of Abuse or Neglect of an Incapacitated Adult.

16. Criminal Case Studies Commonwealth v. Arlene White and Rachel Zacarias Victim lived in Roselawn Rest Home in Russell County White was administrator of rest home, Zacarias was medication aide. Neither was certified to provide wound care. Despite this, both provided wound care to a resident for months. Victim was ultimately take to hospital because she was having difficulty breathing. Hospital staff noted victim had significant skin tears on her body, “foul” and “nasty” odors from her body, pressure ulcers on her back and legs, and old crusty black bandages stuck to her skin. Victim diagnosed with sepsis and severe malnutrition. She was admitted to ICU and died later that day. White and Zacarias pled guilty to felony abuse and neglect of an incapacitated adult resulting in serious bodily injury. Sentenced to 3 years suspended sentence, 2 years probation, and surrender any licenses

17. Criminal Case Studies United States v. Bristol Labs/Beth Palin/Joseph Webb Case originated as drug diversion case against Dr. Charles Wagner. Wagner operated a cash-only practice and was prescribing suboxone. Wagner did not physical exam and charged each patient $250 for initial visit and $110 for each subsequent weekly visit. Wagner and another doctor, Mary Curtiss, sent all their patients to Bristol Labs (owned by Palin and run by her husband, Webb) for urine drug screens. Bristol Labs did accept insurance and for every patient who had insurance, Wagner, Curtiss and Bristol Labs used 2 different expensive drug screens. Uninsured patients were treated using one much cheaper, dip-stick drug screen and paid $25 out of pocket. Insurance companies were billed up to $2,000 for the expensive drug screens. Wagner died prior to indictment Curtiss, Palin and Webb were indicted in federal court for Conspiracy to Commit Heath Care Fraud and Health Care Fraud

18. Prosecuting Elder Abuse as Fraud Cases Mixed results prosecuting cases as Abuse or Neglect of an Incapacitated Adult The statute is cumbersome; tendency to not second-guess care givers False Statements relating to health care matters Health care fraud (10 year max penalty)– enhanced penalty: If the violation results in serious bodily injury … such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both. Still attack the injury or suffering – but approach the investigation and prosecution from a different perspective

19. Summary 1.Who we are:History, Duty, and Capability 2.How we work:Coordinated Investigations – AG, Local Law Enforcement, VSP, FBI, HHS-OIG, DEA, FDA, IRS 3.What we’ve done:Abuse/Neglect; Health Care Fraud; False Statements; Alteration of Records; Agg. I.D. Theft; Prosecuting Abuse and Drug Diversion as Fraud Case