Deeper Than the Headlines: OIG Semiannual Report

The OIG recently submitted their semiannual report to Congress. The report summarizes the significant work of the OIG for the reporting period covering October 1, 2017, to March 31, 2018. Overall highlights of the report include the following:

  • Expected investigative recoveries of $1.46 billion
  • Criminal actions against 424 individuals or entities that engaged in crimes against HHS programs
  • Exclusion of 1,588 individuals and entities from Federal healthcare programs
  • Civil actions against 349 individuals or entities

The semiannual report always includes examples of enforcement and recoveries.
Here are some prime examples that could raise some interest in your compliance program when shared with the right people in your organization:

Home Health Agency

Sila Luis, the co-owner and operator of two home health agencies, engaged in an elaborate health care fraud scheme. According to court documents, from January 2006 through June 2012, Luis and her co-defendants enlisted and paid patient recruiter’s kickbacks and bribes in exchange for the referral of Medicare beneficiaries to the two home health agencies to receive home health and physical therapy services that were not medically necessary, not provided, or both. Luis pleaded guilty to conspiracy to commit health care fraud and was sentenced to 6 years and 8 months in prison and ordered to pay restitution of $45 million. Two additional defendants involved in the scheme were previously sentenced to a combined 11 years and 8 months in prison and ordered to pay a portion of the $45 million in restitution, as well as an additional $27 million in restitution.

Drug Manufacturer

United Therapeutics Corporation agreed to pay $210 million and entered into a corporate integrity agreement to resolve allegations of paying kickbacks. United manufactures and sells several drugs used to treat pulmonary arterial hypertension. The settlement resolved allegations that from 2010 to 2014 United violated the False Claims Act by paying kickbacks to Medicare patients through donations it made to Caring Voice Coalition (CVC). CVC, in turn, allegedly used the donations to pay copayments for patients to induce the patients to use United’s drugs. The government alleged that United routinely obtained data from CVC detailing how much CVC spent for patients who were using United's drugs and that United used this data to decide how much money to donate to CVC. Essentially, the government alleged that United used CVC as a conduit to pay the copayments of Medicare patients who were using United's drugs. In addition to the $210 million, United also entered a 5-year CIA with OIG.


The nation’s largest for-profit provider of hospice services entered into a settlement agreement to resolve allegations that it submitted false claims to Medicare. Defendants from VITAS Hospice Services allegedly submitted false claims to Medicare for services provided to patients who were ineligible for hospice benefits, and continuous home care services that were not medically necessary, not provided, or not performed in accordance with Medicare requirements. VITAS Hospice Services agreed to pay $75.5 million to resolve their FCA liability, and entered a 5-year CIA.

False “Meaningful Use” Claims

21st Century Oncology (21C) and North Carolina Radiation Therapy Management Services entered into a settlement agreement to resolve allegations that they submitted false claims to Medicare. 21C is the largest integrated network of cancer treatment centers and affiliated physicians in the world. It is alleged that 21C knowingly submitted, or caused the submission of, false claims under the Medicare Electronic Health Record (EHR) Incentive Program for meaningful use performance years 2012-2014 on behalf of 121 physicians. 21C allegedly submitted false attestations to CMS regarding its compliance with the Medicare EHR Incentive Program and CMS made incentive payments for performance years 2012-2014 to physicians who did not meet the criteria for meaningful use and paid claims for physician services in CYs 2015 and 2016 at a rate that did not reflect the required downward adjustments. This settlement also resolves allegations of violations of the physician self-referral law (commonly referred to as the “Stark law”) because of prohibited referrals made by certain physicians with improper compensation arrangements. Between February 2013 and October 2016, financial relationships with certain 21C physicians allegedly violated the Stark law. Between October 2014 and October 2017, financial relationships with certain Radiation Therapy physicians allegedly violated the Stark law. 21C and Radiation Therapy agreed to pay $26 million to resolve their FCA liability, and 21C entered a 5-year CIA with OIG.


Orthopaedic and Neuro Imaging LLC (ONI) and its owner, Richard Pfarr, engaged in a scheme to defraud Medicare. The investigation disclosed that ONI and Pfarr knowingly submitted false claims to Medicare by administering contrast dye during MRI scans on patients without proper supervision by a physician. Contrast dye is a chemical that is injected intravenously into the body to make certain tissues more clearly visible on an MRI. ONI was ordered to pay $16.2 million in damages, and Pfarr was ordered to pay $6.1 million in damages.


Meadows Regional Medical Center, Inc. (MRMC), a 57-bed not-for-profit safety net hospital located in rural southeast Georgia, entered into two settlement agreements to resolve its FCA liability. Three physician groups (Dublin Internal Medicine, Middle Georgia Urology, and Downtown Dublin Wound Center) were also parties to one of the settlement agreements. The investigation revealed that from 2012 to 2015, MRMC allegedly violated the Stark law (and, with some arrangements, also the anti-kickback statute) by paying physicians substantially more than the fair-market value of their services in exchange for patient referrals from the physicians to MRMC. The focus of the investigation and the settlements was MRMC’s relationships with 12 physicians and their respective groups. Two of the physicians were independent contractors of MRMC, operated wound care centers, and were paid under medical director agreements. The remaining 10 physicians were employees of MRMC. MRMC entered into one settlement agreement to resolve its FCA liability related to the physician groups for $3.6 million, but it could increase up to $11.1 million contingent upon MRMC’s meeting certain financial thresholds, and a second agreement to resolve its liability related to two individual physicians for $1.7 million. MRMC also entered into a 5-year CIA with an arrangements review.

These are just some of the examples shared in the semiannual report. Make sure you review the 110-page report for information on the types of services you and your organization might be providing.

Questions or Comments?