ZIFL- Volume 26, Issue 9 – May 1, 2022

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Posted on May 2, 2022 by Barry Zalma

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Read all of the articles in this Issue including the Following Articles by clicking on ZIFL-05-01-2022.

Dustin Jungvirt, appealed the sentence imposed following his guilty plea to insurance fraud, claiming the district court failed to properly consider which sentencing option would best rehabilitate him. In State of Iowa v. Dustin Jungvirt, No. 21-1130, Court of Appeals of Iowa (April 13, 2022) the Iowa Court of Appeals resolved the dispute.
Insurer Sentenced for Fraud & Bankruptcy Violations

Jacques Andres Frym, 53, who owned businesses in the Savannah area, pleaded guilty last year to lying under oath about his income. Frym at one time owned Federal Employee Benefits LLC, an insurance company, along with real estate and other interests, federal court records show.
Indiana Travel Agent Sentenced for Insurance Fraud
Links to Fraud Bureaus, Fraud Divisions & Anti-Fraud Organizations
Good News From the Coalition Against Insurance Fraud
Health Insurance Fraud Convictions

In one of Dozens: California Chiropractor Sentenced to Five Years in Prison for Fraud.

Susan Poon, a 57-year-old former Orange County, California chiropractor was sentenced to more than 5 years in federal prison for defrauding health insurers out of around $2.2 million as part of a scheme that lasted more than three years.

Nearly a year after she was convicted of health care fraud and aggravated identity theft, among other charges, Poon submitted false reimbursement claims to several health insurance providers that included false diagnoses and claims of services that were not actually performed, as well as fraudulent prescriptions containing fake diagnoses of dependents of Costco and United Parcel Service employees.

To facilitate the fraud, prosecutors said Poon stole the personal identification information of her victims by attending health fairs at various UPS and Costco locations and soliciting the info from employees.

In a sentencing brief filed with the court, prosecutors described a scheme involving “interdependent moving parts” in which Poon “lied about visits with, diagnosis of, and treatments given to actual people and their children.”

During her sentencing hearing, Poon told U.S. District Judge David O. Carter that she was “sincerely sorry” for her mistakes and promised that “for the future I will lead with a moral compass in my soul.” Poon spoke of her family history – which included parents who immigrated to New York with nothing and established a successful restaurant – to her own work helping the hungry and homeless.

“There is not one day since this incident that I am not truly sorry,” Poon told the judge. “I mentally punish myself daily.”

Carter acknowledged what he described as Poon’s “extraordinary” family history, and said that prior to the fraud scheme she appeared to live an “exemplary life.” But the judge also noted that the fraud went on for years and required information taken from more than 500 people, including some toddlers.

“You represent a person I intuitively feel has turned a corner,” Carter said. “By the same token, the harm here is extraordinary.”

The judge ultimately decided on a sentence slightly shorter than the seven years and three months requested by prosecutors. He also ordered her to pay more than $1 million in restitution.
Does the Covenant of Good Faith & Fair Dealing in Canada Restrict Report to Police?
Other Insurance Fraud Convictions

Three Sentenced in Big Insurance Fraud Scheme to Stage Crashes

Keishira Richardson, 27, Chandrika Brown, 31, and Aisha Thompson, 44, are among 36 people convicted so far in what authorities have called “Operation Sideswipe.”

The three Louisiana women have been ordered to repay a total of $5.5 million to companies defrauded in a scheme to stage wrecks.

Each was sentenced on one count each of conspiracy to commit mail fraud.

Richardson was sentenced to five years on probation and ordered to pay $4.7 million in restitution. That’s the total paid to settle claims made by her and others for one crash staged on Oct 13, 2015.

Richardson’s father, Anthony Robinson, and his wife, Audrey Harris, were each sentenced in June to four years in prison on the same charge for that crash. They both underwent extensive medical treatment, neck and back surgeries, because they “understood that agreeing to more medical treatment would increase the value of their lawsuit,” according to a news release about their sentence.

U.S. District Judge Ivan Lemelle, who also sentenced Keishira Robinson, told her father and Harris that they and their codefendants would be responsible for paying $5 million including the companies’ attorneys fees.

U.S. District Judge Sarah S. Vance sentenced Thompson to 18 months in prison and restitution of $677,500 — the total paid in claims to several people involved in a crash with a tour bus on Oct. 15, 2015.

Vance ordered Brown to put in 100 hours community service and pay $121,000 restitution. Although Brown wasn’t in a RAV4 that hit a tractor-trailer on Sept. 6, 2017, she hired a lawyer, put in a claim for injuries and received medical treatment, a news release said.

More reports at ZIFL.
Announcement from the Justice Department re Covid-19 Fraud
New Book on Ethics for the Insurance Professional
Go To Jail, Go Directly to Jail, Do Not Pass Go
Eleventh Circuit Explains How Doctor Defrauded Medicare and Medicaid

Doctor Who Treated Georgia Patients More than 70 hours a Day While he Gambled in Las Vegas Goes to Jail

In United States of America v. Douglas Moss, Nos. 19-14548, 19-14565, United States Court of Appeals, Eleventh Circuit (April 12, 2022) the Eleventh Circuit affirmed the conviction, sentence, restitution and forfeiture of millions taken in his crime.

EXPLANATION OF MEDICARE AND MEDICAID SYSTEM

Medicare and Medicaid combined spend $1,500,000,000,000 a year, which is more than one-third of the total health expenditures in this country. Like other government health care programs, these two work on the honor system. Trust and more trust. Both programs take a pay first, ask questions later (if ever) approach. Which leads to crime and more crime, both sooner and later.

A trust-based system is only as good as the people who are trusted. Douglas Moss is one of those who was trusted but not trustworthy. As a physician, he fraudulently billed Medicare and Medicaid for millions of dollars for visits to nursing home patients that he never made.

For his fraudulent conduct, Moss was convicted of conspiracy and substantive health care fraud, sentenced to 97 months imprisonment, ordered to pay restitution of about 2.2 million dollars, and ordered to forfeit around 2.5 million dollars. He, of course, appealed, using the funds he stole to pay lawyers to challenge the convictions, sentence, restitution amount, and forfeiture amount, which is nearly every component of the judgment against him.

FACTUAL BACKGROUND

To explain Moss’ crimes the Eleventh Circuit began its analysis with how Medicare and Medicaid determine how much health care providers will be paid. It explained that Medicare and Medicaid are federally funded health care programs. Medicare pays “claims,” which are requests by a health care provider to be “reimbursed” (paid) for services provided to Medicare recipients. It also contains a code for the procedure or service performed.

The “CPT codes,” which stands for Current Procedural Terminology codes are a national uniform coding structure created for use in billing and overseen by the American Medical Association. They are used by all health insurance companies and by Medicare and Medicaid. A code represents at least two things: the procedure or service performed and the level of complexity involved in it. One type of procedure or service can have more than one CPT code because the same procedure may, in some cases, be more complex than in others. Generally, for any given category of procedure, the more complex the performance, the higher the number used for its code. In turn, a higher CPT code generally gets a higher reimbursement amount from Medicare.

Most of the fraud in this case involves claims for visits to nursing homes. For Medicare to pay a claim several requirements must be met. The service must be provided to a real patient who is properly enrolled as a Medicare beneficiary; it must be provided by a health care provider properly licensed and “enrolled” as a Medicare provider; it must be a service covered by Medicare; and it must be properly documented and billed. The service also must be reasonable and medically necessary. Health care providers sign a “certification statement” agreeing that they will comply with all of those requirements and will not submit false claims.

To properly bill Medicare at the physician’s rate for services provided in a nursing home setting, the physician must be the one in the patient’s room directly providing the service to the patient. When an assistant performs the service, the claim submitted to Medicare must disclose that fact.
Given Moss’ failure to identify a single properly billed claim, he did not persuade the appellate court that the district court clearly erred.
ZIFL OPINION

The Eleventh Circuit admitted that, because Medicare and Medicaid payments are made on the “honor system” it is wide open to fraud perpetrated by health care professionals with no honor. Moss was a provider with no honor. That the scheme succeeded for many years is because the system believes all of the health care professional are honorable and just paid Moss what he asked even when a simple calculation would have shown that that he was billing for 70 hours of service in a single day. Moss made a great deal of dishonest money only to complain that he was not allowed to keep the fruits of his crime and as a kind and professional doctor was now required to practice medicine in the federal gray bar hotel – the federal prison. Hopefully this will deter other doctors from trying to emulate his crime.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].

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