Health Care Fraud: Texas Style

On Oct. 15 a federal jury in Houston convicted the owner of a firm that operated 14 pharmacies, on fifteen counts including conspiracy to commit mail fraud, conspiracy to violate the anti-kickback statute, bribery concerning programs receiving federal funds, conspiracy to commit bribery, five counts of healthcare fraud, and six counts of money laundering, resulting in $160 million in fraudulent claims that were paid by Medicare. 

As described by the Office of the U.S. Attorney for the Southern District of Texas:

From 2014 through 2021, Mohamad Mokbel led a company called 4M Pharmaceuticals which operated 14 pharmacies with straw owners. The jury heard evidence that Mokbel illegally purchased thousands of Medicare beneficiaries, including their identification number, personal health and physician information. Mokbel targeted elderly diabetic patients who are dependent on diabetic testing supplies to manage their blood sugar levels. Mokbel paid $16 to $40 per Medicare beneficiary.  

To maximize reimbursements and without regard for medical necessity, Mokbel then directed 4M employees to use the Medicare beneficiaries’ patient data to run insurance claims to determine if Medicare or other insurance plans would cover and reimburse at a high rate for the topical creams, Omega-3 pills and other medications that Mokbel intended to sell through 4M pharmacies.

At Mokbel’s direction, 4M employees would then fax pre-filled prescription requests to the patients’ doctors appearing to be for diabetic testing supplies with topical creams added at the bottom. They also included false representations that the patient was requesting a 4M Pharmacy fill their medications. In reality, Mokbel had previously purchased the patient’s personal information, the patient had not selected a 4M Pharmacy and the patient was often unaware the request was being made on their behalf. 

Many doctors apparently took the representations in the fax at face value and did sign and send back the prefilled prescription requests to 4M. Mokbel’s call center in Houston and later in Egypt then contacted the patients and made false and misleading statements about the topical cream and their doctor’s order. Mokbel’s pharmacies then shipped out numerous topical creams, often on auto-refill, and excessively billed Medicare, Medicaid and private insurance plans. 

Mokbel made over $200 million as a result of the scheme. 

The money value of the fraud is considerably less than the record for Medicare fraud, but what caught my eye was the complexity of the scheme and the lineup of law-enforcement agencies involved in the case: Homeland Security Investigations (HSI) Houston, the FBI, IRS Criminal Investigation, the U.S. Department of Health and Human Services, the U.S. Food and Drug Administration, and the Texas Attorney General’s Medicaid Fraud Control Unit. This was a big, big deal for these investigators.

Cyber Attack on United Healthcare Division Was Unprecedented in Scope

If you've tried to fill a prescription or get preauthorization for a drug or procedure or -- if you're a health care provider -- tried to submit a bill electronically, you have experienced the widespread crippling of our healthcare infrastructure that resulted from an unprecedented cyberhack. 

As reported by KFF Health News (March 8), 

The American Hospital Association calls the suspected ransomware attack on Change Healthcare, a unit of insurance giant UnitedHealth Group’s Optum division, “the most significant and consequential incident of its kind against the U.S. health care system in history.” While doctors’ practices, hospital systems, and pharmacies struggle to find workarounds, the attack is exposing the health system’s broad vulnerability to hackers, as well as shortcomings in the Biden administration’s response.

Despite the centrality of digital record-keeping, billing, and payment systems, there turns out to be no meaningful governmental involvement in this arena.

To date, government has relied on more voluntary standards to protect the health care system’s networks, Beau Woods, a co-founder of the cyber advocacy group I Am The Cavalry, said. But “the purely optional, do-this-out-of-the-goodness-of-your-heart model clearly is not working,” he said. The federal government needs to devote greater funding, and more focus, to the problem, he said. [emphasis added]

Restoration of full operability after a cyber attack typically takes 30 days, according to Mr. Woods, which means we can all expect slower response times to virtually all requests for health-related services at least through March and probably into April. Meaningful federal action will take much, much longer.

 

Chicken Soup for COVID-19?

Earlier this week, NBC reported that the CDC is considering a substantial change to its isolation guidelines for individuals who are COVID+. Under the proposal, individuals with COVID would be allowed to re-enter society 24 hours after they are fever-free without medications. In essence, according to the report, CDC's recommendation would be to treat COVID like the flu.

Soon after the NBC story broke, an anonymous official at DHHS emphasized there is no change yet, meaning their 5-day isolation/10-day masking guideline is still in effect, at least until it isn't, pointing out that "discussions are at an early stage and no definitive decisions have been made."

Outside the Washington Beltway, support for the change seems to be building:

Dr. William Schaffner, an infectious diseases expert at Vanderbilt University Medical Center in Nashville, Tennessee, said he and his colleagues have privately encouraged the CDC to drop the five-day isolation period, in part because there’s little evidence it’s stopping the spread of Covid. 

The “rigorous recommendations that are currently in place do not reflect common practice,” Schaffner said. “It’s difficult to demonstrate that strict isolation has had a notable impact on transmission.” 

California and Oregon have already broken with the CDC, suggesting that people don't need to stay home if they've been fever-free for 24 hours without medication.

“With each day, the risk of communicability diminishes,” Schaffner said. “Public health recommendations have to be practical.” That is, people may stay home for a few days if they have a fever and feel achy and fatigued. After that, it’s back to business as usual.

Dr. David Margolius, the public health director for the city of Cleveland, said he was also in favor of easing isolation restrictions.

“For a couple years, people really associated public health with the elimination of Covid,” Margolius said. But “public health is about increasing life expectancy for our residents. It’s about improving quality of life. And that is more than just controlling one virus.”

Covid is still contagious, said Dr. Abraar Karan, an infectious disease physician at Stanford Medicine. “What the CDC and health departments are trying to say is that we need to have policies that people are going to actually follow,” Karan said.

As of this month, emergency room visits, hospitalizations and deaths from Covid are down, according to the latest CDC data.