McHenry County Blog

A press release from State Senator Pam Althoff:

Senate Week in Review: April 1 – 5, 2013

SPRINGFIELD, IL – Despite the state’s ongoing credit woes, improved market conditions allowed Illinois to achieve a near record-low interest rate on construction bonds sold April 2. But that good news was tempered by a report from the University of Illinois showing that the state’s economic growth continues to lag behind the rest of the nation and has slowed after three years of improvements, State Sen. Pamela Althoff (R-Crystal Lake) said.

In other legislative news:

• Local governments are raising concerns about a proposal from Gov. Pat Quinn to reduce the their share of state income tax revenues;
• The Quinn administration has begun implementing a revised early-release program for prisoners, after suspending the practice more than three years ago;
• The state is beginning to accept health insurance proposals for inclusion in the Illinois health insurance exchange which will be established as part of the federal Affordable Care Act, commonly known as Obamacare; and
• In a pair of editorials the Chicago Tribune first asks, if scrubbing 13,700 ineligible persons from the Medicaid rolls was “low-hanging fruit,” why did the state wait for an outside consultant before taking action? The publication then urges lawmakers to carefully consider the options before adding hundreds of thousands of new recipients to the Medicaid program.

State Sells Construction Bonds

Illinois sold a total of $800 million in bonds for construction projects on April 2, getting a 3.92% interest rate on $450 million of tax-exempt bonds, which matches a 20-year low the state received in Jan. 2012. On the second set of bonds, Illinois received a 4.97% rate on $350 million in taxable bonds, which was better than the 5.29% the state received in Jan. 2012 on similar bonds.

Despite the relatively low rates, Illinois continues to pay a higher interest rate than states with better credit ratings.

State’s Recovery in Peril?

Warning signs are showing up in the state’s economy, according to a University of Illinois “flash index” released at the beginning of April. The index showed that while the state’s economy continues to expand, the rate of that expansion slowed slightly in March.

The University’s report coincides with the latest unemployment report, which showed unemployment is higher in 10 out of 12 metropolitan areas, when comparing Feb. 2013 to Feb. 2012. Statewide, unemployment rose to 9.5% in February, from 9% the previous month and 8.9% in February, 2012.

Local Governments Worried about Revenue Sharing

Governor Quinn has suggested that the state could help close its budget gap by freezing local revenue sharing dollars at the same level as 2012. Not surprisingly, a number of municipalities are gearing up to oppose the plan.

Recently, Arlington Heights officials warned they would lose as much as $863,000 in increased funding if the plan is adopted. The Quinn administration estimates the freeze would reserve about $68 million for the state budget and amount to about $5.30 per resident for each municipality. However, the Illinois Municipal League, which represents many city governments, has put the cost at closer to $11.50 per resident and says it would allow the state to divert $148 million.

Quinn Resumes Early Release

In late March, the state’s Department of Corrections released the first inmates under a revised early release program. It was the first early release in three years.

Early release of prisoners had been suspended after the Associated Press uncovered a series of problems in late 2009 and early 2010. At the time, it was revealed that under a controversial “Meritorious Good Time-Push” program the Department of Corrections was releasing prisoners, including some with a history of violent crimes, after an average stay of just 16 days.

The revised program grants non-violent offenders up to 180 days of early release credit if they meet specified criteria.

First Steps toward Health Exchanges

Insurance companies have begun submitting plans to a state review panel in anticipation of the launch of the federal Affordable Care Act, sometimes known as “Obamacare.”

A key component of the federal healthcare law is the establishment of insurance “exchanges” designed to offer individuals and small businesses one-stop shopping for health insurance. Insurance plans are to be available for comparison beginning Oct. 1 and coverage would start in 2014.

The state expects up to 400 different plans will be submitted for review and possible inclusion on the health exchange website. However, some of the state’s largest insurance companies are still weighing whether or not to participate in the Illinois exchange. Plans available through the exchange will be required to meet a base level of coverage and meet strict financial restrictions. The state estimates it will be September before the website goes live and consumers can begin comparing plans.

Medicaid Reform and Expansion

In a pair of recent editorials, the Chicago Tribune took a look at the state’s efforts to remove ineligible recipients from the state Medicaid program and then warned lawmakers not to rush to approve a massive Medicaid expansion.

The first editorial summarized early results of an audit ordered under bi-partisan Medicaid reforms adopted in 2012.

The Tribune wrote: “The initial results of this audit are … astonishing: Of the first 20,500 recipients screened by an outside contractor, the auditors recommend that 13,709 be removed from the rolls. Yes, that’s two-thirds of the first group screened, flagged as ineligible to receive their current Medicaid benefits.”

The editorial references a statement from the Department of Healthcare and Family Services Director Julie Hamos that this represented “low-hanging fruit,” because the individuals had already been red-flagged as suspicious.

So, the Tribune editorial asks:

“Why didn’t state officials pluck this low-hanging fruit long ago?”

The second editorial looks at a major Medicaid expansion contained in Senate Bill 26, which passed the Senate in February with no Republicans supporting it. The bill is currently before the Illinois House.

Although the federal government is expected to pick up the bulk of the cost for the expansion, the state’s Dept. of Healthcare and Family Services (HFS) has indicated the cumulative cost to the state could exceed $2.9 billion by 2020. The measure voluntarily expands the state’s Medicaid program eligibility to nearly 350,000 additional individuals, who are between the ages of 19 and 64 who are under 138% of the Federal Poverty Level.

A press release from the U.S. Attorney’s Office:

CHICAGO PSYCHIATRIST ALLEGEDLY SUBMITTED AT LEAST 190,000 FALSE CLAIMS TO MEDICARE AND MEDICAID; LAWSUIT ALLEGES KICKBACKS TO PRESCRIBE ANTIPSYCHOTIC MEDICATION FOR NURSING HOME PATIENTS

CHICAGO — A Chicago psychiatrist received illegal kickbacks from pharmaceutical companies and submitted at least 140,000 false claims to Medicare and Medicaid for antipsychotic medications he prescribed for thousands of mentally ill patients in area nursing homes, according to a civil health care fraud lawsuit filed today by the United States.

The defendant, Dr. Michael J. Reinstein, also submitted at least 50,000 claims to Medicare and Medicaid, falsely stating that he provided “pharmacologic management” for his patients at more than 30 area nursing homes and long-term care facilities, the lawsuit alleges.

The lawsuit seeks triple damages under the False Claims Act, plus a civil penalty of $5,500 to $11,000 for each alleged false claim.

“This is the largest civil case alleging prescription medication fraud against an individual ever brought in Chicago,” said Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois. He announced the lawsuit with William C. Monroe, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, and Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG. The investigation is continuing, they said.
Reinstein, 69, of Skokie, has provided psychiatric medical services in the Chicago area since 1973. Since at least 1999, he has maintained an office in Chicago’s Uptown neighborhood, which has the densest concentration of mentally ill nursing home residents in Illinois.

According to the lawsuit, Reinstein routinely prescribed antipsychotic and other psychiatric medications knowing that, because most of his patients are indigent nursing home residents, pharmacies dispensing the medications submitted claims to Medicaid, and beginning in 2006, to Medicare Part D. Reinstein also submitted Medicare and Medicaid claims for pharmacologic management of his patients, knowing that he did not engage in substantive evaluations of his patients’ medical and psychiatric conditions to properly manage their medications. Instead, he allegedly prescribed medications to his patients based on his receipt of kickbacks from pharmaceutical companies.

The lawsuit involves Reinstein’s use of clozapine, a rarely-used medication that has serious potential side effects and is generally considered a drug of last resort, particularly for elderly patients. While clozapine has been shown to be effective for treatment-resistant forms of schizophrenia, it is also known to cause numerous side effects, including a potentially deadly decrease in white blood cells, seizures, inflamation of the heart muscle, and increased mortality in elderly patients.

Prior to August 2003, Reinstein prescribed Clozaril, the trade name for clozapine manufactured by Novartis, and he often had more than 1,000 patients using the medication at any given time. For many years, Novartis paid Reinstein to promote Clozaril, the complaint alleges. After Novartis’ patent for Clozaril expired in 1998, Reinstein resisted pharmacy and drug company efforts to switch his patients to generic clozapine and he continued to be the largest prescriber of Clozaril to Medicaid recipients in the United States. In July 2003, Novartis notified Reinstein that it would be withdrawing its support for Clozaril, and ended the regular payments that it had been making to Reinstein.

In August 2003, Reinstein finally agreed to switch his patients to generic clozapine manufactured by Miami-based IVAX Pharmaceuticals, Inc., the suit alleges, if IVAX agreed to pay Reinstein $50,000 under a one-year “consulting agreement;” pay his nurse to speak on behalf of clozapine; and fund a clozapine research study by a Reinstein-affiliated entity known as Uptown Research Institute. IVAX agreed and Reinstein immediately began switching his patients from Clozaril to IVAX’s clozapine. He quickly became the largest prescriber of generic clozapine in the country.

“Reinstein’s inordinate prescribing of clozapine stands in stark contrast to its extremely limited use by other physicians,” the lawsuit states. While generally only four percent of schizophrenia patients who were prescribed antipsychotics received clozapine, during the time Reinstein was alegedly accepting kickbacks from IVAX, more than 50 percent of his patients were prescribed IVAX’s clozapine. At one nursing home, Reinstein had 75 percent of the 400 residents on IVAX’s clozapine.
Between 2003 and 2006, Reinstein allegedly requested, and IVAX provided, additional direct and indirect benefits to Reinstein and his associates, including:

paying airfare, lodging, meals, and entertainment expenses for a pharmacy owner and spouse, Reinstein’s nurse, his accountant and spouse, his administrative assistant and spouse, and Reinstein and his wife to travel to IVAX’s headquarters in Miami. IVAX also paid for Reinstein and his entourage to go on a fishing trip, a boat cruise, and a golf outing;

• annual renewal of Reinstein’s $50,000 “consulting agreement;” and
• tickets to sporting events and free IVAX-manufactured medication for Reinstein’s personal use.

In January 2006, IVAX became a subsidiary of Teva Pharmaceuticals Industries, Ltd., an Israeli company. About seven months before the merger, Reinstein began moving large numbers of his patients to a form of clozapine manufactured by a competitor of IVAX/Teva. In April 2006, Teva paid all expenses for Reinstein and his entourage to travel to Miami, including a $2,300 boat cruise, and at least two dinners costing more than $1,700 each. During this trip Teva employees asked Reinstein what the company could do to induce Reinstein to prescribe more clozapine, and Reinstein suggested that Teva hire an associate of his from Chicago, the lawsuit alleges. Teva agreed and in the months after the hiring Reinstein put several hundred patients back on Teva’s clozapine.

From 2007 to 2009, the suit alleges, Teva and Reinstein entered into annual “speaker agreements” that resulted in Teva paying Reinstein more than $100,000.

The suit alleges that Medicaid received and paid more than 100,000 false claims from various pharmacies for IVAX/Teva clozapine prescriptions written by Reinstein between August 2003 and July 2011 as a result of illegal kickbacks he solicited and received from IVAX and Teva. Between 2006 and July 2011, Medicare Part D received and paid more than 40,000 false claims involving similar kickback-induced prescriptions.

Likewise, between August 2003 and July 2011, Reinstein allegedly submitted more than 40,000 false claims and received payment from Medicaid for purported pharmacologic management, as well as more than 10,000 similar false claims to Medicare.

The government is being represented by Assistant U.S. Attorney Eric S. Pruitt.

A civil lawsuit contains merely allegations of unlawful conduct. In civil cases, the government has the burden of proving the allegations by a preponderance of the evidence.

A press release from the U.S. Attorney’s Office:

NINE DEFENDANTS, INCLUDING TWO OWNERS OF A HOME HEALTH CARE AGENCY AND TWO PHYSICIANS, INDICTED FOR ALLEGEDLY PAYING AND RECEIVING KICKBACKS FOR MEDICARE PATIENT REFERRALS

CHICAGO — Two owners of a home health care agency in suburban Skokie and two physicians were among nine defendants indicted on federal charges for paying and receiving kickbacks in exchange for the referral of Medicare patients for home health care services, federal law enforcement officials announced today.

Defendants Ana Nerissa Tolentino, a registered nurse, and Frederick Magsino, both part owners of Rosner Home Healthcare, Inc., and Edgardo Hernal, a former Rosner employee, allegedly conspired to pay kickbacks to six co-defendants for the referral and retention of Medicare patients that enabled Rosner to bill Medicare.

Also indicted were

• Emmanuel Nwaokocha and Masood Syed, both physicians;
• Jenette George, who operated Ttenej Senior Referral Agency which provided senior citizens with referrals to home health agencies; and
• Jennifer Holman, who was an office manager at a doctor’s office.

Co-defendants Titis Jackson and Carla Phillips-Williams were marketers of Rosner’s services.

The 27-count indictment was returned by a federal grand jury last Thursday.

Tolentino, 43,of Morton Grove; Magsino, 59, of Morton Grove; Nwaokocha, 59, of Skokie; Syed, 53, of Mt. Prospect; Jackson, 36, of Chicago; George, 59,of Chicago; and Phillips-Williams, 42, of Chicago, were initially arrested and charged in criminal complaints in late July of this year.

All seven were released on bond. Hernal, 55, of Westchester, and Holman, 53, of Chicago, were charged for the first time in the indictment.

All nine defendants will be arraigned in U.S. District Court on dates to be determined.

Three defendants — Tolentino, Magsino, and Hernal — were charged with one count of conspiracy to pay illegal kickbacks for Medicare patient referrals. Eight of the nine defendants were charged with two or more counts of violating the anti-kickback statute.

The indictment was announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services, Office of Inspector General; and William C. Monroe, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

According to the indictment between January 2008 and July 2012, Tolentino, Magsino, and Hernal conspired with others to pay kickbacks and bribes to

• doctors, such as Nwaokocha and Syed;
• marketers, such as Jackson, George, and Phillips-Williams;
• medical office employees, such as Holman;
• nurses, and
• others to refer Medicare patients to Rosner.

The three defendants charged with conspiracy allegedly paid kickbacks to increase Rosner’s patient census and to enrich Rosner and themselves.

The amount of kickbacks varied but generally ranged from $300 to $600 for each new patient’s completion of five home health visits in one cycle, and ranged between the same amounts for the repeat admission of a previous patient in a new cycle of home health care.

According to the previously filed complaints, Medicare paid Rosner approximately $13 million for claims submitted for home health services between January 2008 and January 2012. Neither the complaints nor indictment allege how much of Rosner’s total Medicare billings were fraudulent.

The complaints charged that between March and July 2012 alone, the following co-defendants received the amount of kickbacks listed:

• Nwaokocha, $4,800;
• Syed, $1,500;
• Jackson, $24,000;
• George, $13,500; and
• Phillips-Williams, $3,000.

Conspiracy and each count of violating the anti-kickback statute carry a maximum penalty of five years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is being represented by Assistant U.S. Attorney Halley Guren.

The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The case falls under the umbrella of the Medicare Fraud Strike Force, which expanded operations to Chicago in February 2011, and is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Nearly five dozen defendants have been charged in health care fraud cases since the strike force began operating in Chicago last year. Since June 2012, 16 defendants, including owners of other Chicago area home health care agencies and several other physicians, have been indicted in unrelated cases alleging Medicare referral kickback schemes.

Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention & Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

Monday another mailing from “Independent” Dee Beaubien arrived in 52nd State Rep. District mailboxes.

It was again financed by House Speaker Mike Madigan’s Illinois Democratic Party.

This oversized post card takes on Medicaid fraud, which has been at the 10% level since I served in the Illinois House in the 1970′s.

The back has a photo of a Caribbean island.

When I opened my mailbox Saturday, what did appear but another big postcard from the man who wants to be my future Congressman, Peter Roskam.

You can see it below:

The Skinners get back from vacation and what appeared in the mailbox?

Along with the other accumulated mail were two postcards from Congressman Peter Roskam, the incumbent in the current 6th Congressional District who seeks to represent the newly-Madiganized 6th District.  (It now goes from Roskam’s hometown of Wheaton to the northwest all the way to the northwestern corner of Algonquin Township. That’s the point where Algonquin, Grafton, Dorr and Nunda Townships meet.

The subject of both was Medicare fraud.)

The first has a big hammer labeled “Medicare Fraud” that has smashed the glass in a frame of a photo of an older couple.

Saying such fraud costs $60 billion a year, Roskam promotes his “FAST Act.” (“FAST” standing for “The Fighting Fraud and Abuse to Save Taxpayer Dollars Act.”)

The postcard says that 10% of Medicare expenditures are fraudulent or abuse.

Roskam says “cutting edge technology will reduce fraudulent payments to less than .01%.”

It’s endorsed by AARP and Citizens Against Government Waste and “supported by the White House and Republicans and Democrats in Congress.”

The second (or maybe it was the first) postcard about Medicare waste talks about $50 million of Medicare fraud.

That’s a bit strange, since the other one claimed waste to be $60 million.

The address side has a crumpled up dollar bill, plus the message that one out of ten Medicare dollars “is wasted due to fraud and abuse.”

The State is in a fiscal pit brought on, I would argue, by far too many people not willing to vote, “No.”

Perhaps someone other than I voted “No” more often in the Illinois General Assembly, but I doubt it.

I know that when the Illinois Conservative Union was keeping track of budget votes in the 1970′s I voted to appropriated less money than anyone else. (Ask John Curry, who did the tallies.)

And I didn’t vote for Governor George Ryan’s Illinois FIRST bonding program for which my 14-year son will still be paying off, if he doesn’t leave Illinois to avoid that and other burdens, when he is in his late 20′s. A lot of that money went to pay for asphalt, a road surface that needs replacement about every five years and most assuredly should not be financed with 25-year bonds.

But in the fairly large vote to cut welfare’s medical benefits last week, State Rep. Jack Franks cast a vote against reform by voting “No.”

Voting in favor in the House, as explained in this press release, was State Rep. Mike Tryon.

Kent Gaffney did not vote.

State Senator Pam Althoff and Dan Duffy also supported the changes.

A press release from the U.S. Attorney’s Office:

CHICAGO AREA MAN CHARGED IN $1 MILLION MEDICARE FRAUD SCHEME

CHICAGO — A south suburban resident who purported to provide psychotherapy services to Medicare patients was charged with participating in a $1 million health care fraud scheme, the Departments of Justice and Health and Human Services announced today.

The defendant, Bryan Day, 42, of Richton Park, who is not a licensed medical professional, operated and was part owner of Charm Development LLC, located in Chicago Heights, which purported to provide psychotherapy services to patients, primarily in nursing homes and long-term care facilities.

Day was charged with six counts of health care fraud in an indictment returned by a federal grand jury last week and announced today by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG; and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

Day is scheduled to be arraigned at 1:30 p.m. May 14 before U.S. District Judge Virginia Kendall in Federal Court in Chicago.

The indictment alleges that between January 2008 and June 2009 Day submitted fraudulent claims to Medicare totaling $1,078,733, and caused Medicare to pay approximately $438,852.

Day allegedly submitted claims for individual psychotherapy services purportedly performed by Doctor A, knowing that Doctor A did not provide the services claimed.

In addition, the claims included services that were purportedly provided at times when Doctor A was not present at Charm and not licensed by the State of Illinois.

The claims also included services that were purportedly provided by Doctor A after Doctor A was no longer employed by Charm, and Day allegedly submitted Medicare claims for services purportedly rendered by Doctor A in excess of 24 hours a day.

According to the indictment, Doctor A was licensed to practice medicine in Illinois until July 31, 2008, and Doctor A was employed by Charm from May 2005 until February 2009.

The indictment seeks forfeiture of approximately $438,852.

The government is represented by Assistant U.S. Attorney Michael J. Chmelar.

Each count of health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

An indictment contains merely charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The case is part of a nationwide takedown by Medicare Fraud Strike Force operations in seven cities that led to charges against 108 individuals for their alleged participation in schemes to collectively submit more than $455 million in fraudulent claims to Medicare.

This takedown involved the highest amount of false Medicare billings in a single takedown in Strike Force history.

“The results we are announcing today are at the heart of an Administration-wide commitment to protecting American taxpayers from health care fraud, which can drive up costs and threaten the strength and integrity of our health care system,” said Attorney General Eric Holder. “We are determined to bring to justice those who violate our laws and defraud the Medicare program for personal gain. As today’s takedown reflects, our ongoing fight against health care fraud has never been more coordinated and effective.”

The Medicare Fraud Strike Force operations, which expanded to Chicago in February 2011, are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Approximately three dozen defendants have been charged in health care fraud cases since the strike force began operating in Chicago last year.

Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention & Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

A press release from the U.S. Attorney’s Office:

FOURTEEN AREA DEFENDANTS CHARGED IN

EIGHT SEPARATE FEDERAL HEALTH CARE FRAUD CASES

CHICAGO – One Chicago area physician, two chiropractors, three nurses, a pharmacist, and several home health industry administrators and recruiters are among fourteen defendants charged this week in eight separate, unrelated federal health care fraud cases, federal law enforcement officials announced today.

Federal arrest warrants were executed this morning for ten of the defendants. Nine defendants allegedly work in the home health care industry, of which seven were charged with conspiring to violate the criminal anti-kickback statute, which makes it illegal to offer or solicit kickbacks in exchange for referrals of Medicare patients.

Several of today’s enforcement activities in the Chicago area are being conducted as part of a nationwide takedown by Medicare Fraud Strike Force operations that led to charges against 111 defendants for their alleged participation in numerous Medicare fraud schemes.

The Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.

The Departments of Justice and Health and Human Services today announced that the Medicare Fraud Strike Force, previously operating in seven locations across the country, has expanded operations to Chicago and Dallas. Five of the eight cases announced today were brought as a part of strike force operations.

“With this takedown, we have identified and shut down large-scale fraud schemes operating throughout the country. We have safeguarded precious taxpayer dollars. And we have helped to protect our nation’s most essential health care programs, Medicare and Medicaid,” said Attorney General Holder. “As today’s arrest prove, we are waging an aggressive fight against health care fraud.”

Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, announced the formation of the HEAT Strike Force in the Northern District of Illinois.

“Health care fraud has become an increasingly important priority of federal law enforcement in the Chicago area. We are organizing to deploy all of our resources to ensure that dishonest medical providers do not profit from cheating Medicare, Medicaid, and private insurers,” said Mr. Fitzgerald.

Speaking particularly of the kickback violations alleged against several defendants in the home health care industry, Mr. Fitzgerald explained,

“Paying for Medicare and Medicaid patients is a crime. We are focusing our resources on making sure that those who offer or solicit kickbacks are held accountable by the criminal justice system.”

Also announcing the charges was Robert D. Grant, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

“Healthcare fraud will not be tolerated,” said Mr. Grant. “It affects every citizen through increases in insurance premiums and rising costs for both Medicare and Medicaid. As consumers of healthcare services, we should all be cognizant of possible fraud and promptly report suspicious charges to our insurance carriers or law enforcement.”

“Health care fraud is a crime committed against vulnerable patients, U.S. taxpayers, and the government programs funding vitally-needed health services,” said Lamont Pugh III, the Chicago Region’s Special Agent in Charge for the Office of Inspector General of the Department of Health & Human Services.

“The actions we have taken today are part of a coordinated, nationwide crackdown in our continuing battle against criminals who enrich themselves at our great expense.”

James Vanderberg, Special Agent-in-Charge for the Chicago Regional Office of the United States Department of Labor, Office of Inspector General said: “Today’s charges represent the OIGs firm commitment to actively investigate health care fraud schemes in which union sponsored health and welfare funds are defrauded. We will continue to work vigorously with the U.S. Attorney’s Office and our law enforcement partners to investigate crimes that undermine the financial well-being of union affiliated benefit funds.”

Mr. Fitzgerald announced the cases, all eight of which were charged this week in U.S. District Court, with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; Lamont Pugh, Special Agent-in-Charge of the U.S. Department of Health and Human Services Office of Inspector General in Chicago; and James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago. The Office of Criminal Investigations of the Food and Drug Administration, the Office of the Inspector General of the U.S. Railroad Retirement Board, the City of Chicago Office of Inspector General, and the U.S. Department of Labor Employee Benefits Security Administration also participated in the investigations.

The defendants were each charged with one or more counts of

• health care fraud,
• mail fraud,
• false statements relating to health care matters, and/or
• conspiracy.

If convicted of health care fraud, each count carries a maximum penalty of 10 years in prison and a $250,000 fine. If convicted of mail fraud, each count carries a maximum penalty of 20 years in prison and a $250,000 fine. If convicted of false statements relating to health care matters, each count carries a maximum penalty of 5 years in prison and a $250,000 fine. If convicted of conspiracy, each count carries a maximum penalty of 5 years in prison and a $250,000 fine. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

In each case, the public is reminded that charges are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. The details of each case follow:

United States v. Virgilio Orillo and Merigrace (“Grace”) Orillo

Virgilio Orillo and Merigrace (“Grace”) Orillo, who co-own and operate Chalice Home Healthcare Services, Inc. (“Chalice”), with offices in

• Chicago,
• Freeport, and
• Morris, Illinois,

were charged with three counts of health care fraud in a criminal indictment filed on Tuesday.

According to the charges, Chalice nurses, nurse aides, physical therapists, and occupational therapists provide services to patients at their homes.

The indictment alleges that the Orillos falsified documents in order to increase the payments Chalice received from Medicare. These falsifications were allegedly made on documents known as OASIS forms and made Chalice’s patients appear to be sicker than they actually were and in need of greater care than they actually required. The indictment alleges that the Orillos’ fraud scheme cause a loss of more than $500,000 to the Medicare program.

Virgilio Orillo, 68, and Merigrace (“Grace”) Orillo, 44, both of Elmhurst, will be arraigned on February 22, 2011, at 10:30 a.m. at U.S. District Court in Rockford, Illinois, before Magistrate Judge P. Michael Mahoney.

The government is being represented by Assistant U.S. Attorney Scott Verseman. The case was investigated by the FBI and the Inspector General’s offices of the U.S. Department of Health and Human Services and the U.S. Department of Labor.

United States v. Marilyn Maravilla, Junjee Arroya, Ferdinand Echavia, Kennedy Lomillo, and Baltazar Alberto

Five individuals associated with Goodwill Home Healthcare, Inc. (“Goodwill”), were charged by criminal complaint with conspiracy to violate the federal anti-kickback statute by agreeing to offer or pay or to solicit or receive kickbacks for the referral of Medicare patients for home health care services.

According to the charges, Marilyn Maravilla, a nurse who became the controlling owner of Goodwill in approximately August 2008, began causing kickbacks to be paid for the referral of Medicare patients to Goodwill.

Goodwill’s Medicare billings, which were approximately $679,596 in 2008, increased to approximately $2,133,391 in 2009 and approximately $2,700,000 in 2010. According to records seized during a search of Goodwill headquarters, approximately $410,998 in kickbacks were paid to approximately 28 persons for the referral of approximately 912 patients.

In addition to Marilyn Maravilla, the complaint charges Junjee Arroyo, director of nursing; Ferdinand Echavia, a nurse; Kennedy Lomillo, an accountant and bookkeeper; and Baltazar Alberto, a nurse. The investigation is ongoing.

The government is being represented by Assistant U.S. Attorney John Kness. The case was investigated by the FBI and Inspector General’s offices of the U.S. Department of Health and Human Services and the U.S. Department of Labor.

Marilyn Maravilla, 54, of Chicago; Junjee Arroyo, 42, of Elmurst; Ferdinand Echavia, 37, of Chicago; Kennedy Lomillo, 43, of Mundelein; and Baltazar Alberto, 47, of Morton Grove, were arrested earlier today and will appear before the Honorable Jeffrey Cole, U.S. Magistrate Judge, for an initial appearance today at 3:30 p.m.

United States v. Alona Dizon Bugayong and Han Woo

Han Woo and Alona Dizon Bugayong were charged by a criminal complaint unsealed today with one count of conspiring to pay kickbacks for the referral of patients to home health care agencies run by Han Woo.

According to the charges, Woo operates New Covenant Home Health Agency LLC and Healthquest Homecare LLC.

The complaint alleges that Bugayong and Woo conspired to pay kickbacks in exchange for physician referrals of home health care patients.

Bugayong and Woo devised a scheme in which they would provide an initial kickback to a physician in exchange for a patient referral and would continue to pay smaller fees for subsequent re-certifications for subsequent cycles of care. The investigation is ongoing.

Alona Dizon Bugayong, 35, of Lincolnwood, and Han Woo, 35, of Hoffman Estates, were both arrested this morning and will appear before the Honorable Jeffrey Cole, U.S. Magistrate Judge, for an initial appearance today at 1:30 p.m.

AUSA Jasmin Best represents the government. The case was investigated by the FBI and the Office of the Inspector General of the U.S. Department of Health and Human Services.

United States v. Jaswinder Rai Chhibber

Dr. Jaswinder Rai Chhibber, president and owner of the Cottage Grove Community Medical Clinic in Chicago, was charged by a criminal complaint unsealed today with one count of health care fraud.

The complaint alleges that Chhibber devised and participated in a scheme to defraud health care insurance providers including

• Medicare,
• Medicaid, and
• Blue Cross Blue Shield of Illinois,

which administers medical claims for several union health and welfare funds in the Chicago area.

According to the charges, Chhibber submitted medical services reimbursement claims for procedures never rendered, or if performed, carried out despite not being medically necessary.

In particular, Chhibber is charged with performing complicated diagnostic tests on patients, such as e

• chocardiograms,
• electrocardiograms (“EKGs”),
• non-invasive vascular studies,
• nerve conduction studies and c
• arotid doppler ultrasounds,

without a medical need for those tests.

The complaint further alleges that Chhibber billed insurance providers for diagnostic tests never actually performed on patients. To justify the charges submitted to insurance providers, the complaint alleges that Chhibber submitted false patient diagnoses in the reimbursement claims he submitted to insurers. The investigation is ongoing.

Jaswinder Rai Chhibber, 48, of Schaumburg, was arrested this morning and will appear before the Honorable Jeffrey Cole, U.S. Magistrate Judge, for an initial appearance later today.

AUSAs Joel Hammerman and Samuel Cole represent the government. The case was investigated by the FBI and Inspector General’s offices of the U.S. Department of Health and Human Services, the U.S. Department of Labor, and the U.S. Railroad Retirement Board.

United States v. Jay Hammerman

Jay Hammerman, a pharmacist and the owner of Jay’s Save Rite Thorndale Pharmacy, was charged earlier today by criminal information with two counts of health care fraud.

According to the charges, Hammerman devised and participated in a scheme to defraud health care insurance providers, including

• Medicare,
• Medicaid,
• Blue Cross Blue Shield of Illinois,
• Blue Cross Blue Shield of Minnesota,
• Health Net,
• Humana, and
• Caremark,

by submitting fraudulent reimbursement claims for prescription medications that were never actually dispensed. The criminal information alleges that Hammerman was able to obtain more than $200,000 in reimbursement claims for prescription medications never ordered, dispensed or purchased by the pharmacy’s customers.

Hammerman, 62, of Chicago, will be arraigned at a later date in U.S. District Court.

The government is being represented by Assistant U.S. Attorney Joel Hammerman, who is not related to the defendant. The case was investigated by the FBI, the Inspector General’s offices of the U.S. Department of Health and Human Services and the U.S. Department of Labor, and the Office of Criminal Investigations of the Food and Drug Administration.

In addition to the foregoing cases, which address allegations of fraud against Medicare or Medicaid as part of the HEAT partnership between the U.S. Department of Justice and the U.S. Department of Health and Human Services, the following cases announced today involve allegations of fraud against private insurers and/or the City of Chicago.

United States v. Brandy Howard

Brandy Howard, a licensed chiropractor, was charged with two counts of health care fraud, three counts of mail fraud, and two counts of false statements relating to health care matters, in a criminal indictment filed Tuesday in U.S. District Court and unsealed today.

Howard allegedly submitted false claims to Blue Cross Blue Shield for orthotics.

According to the charges, Howard participated in health fairs at school districts and a police department, where she advertised that she could provide Blue Cross PPO subscribers with free shoes.

She then prepared and submitted to Blue Cross fraudulent letters of medical necessity stating that the subscribers required orthotics because they had reported chronic pain, when in fact Howard knew that they had not made such statements. The indictment alleges that Howard submitted claims to Blue Cross in excess of $20,000.

Howard, 35, of Naperville, was arrested upon surrendering to authorities today and will appear today before the Honorable Young B. Kim, U.S. Magistrate Judge, for an initial appearance at 1:00 p.m.

The government is being represented by Assistant U.S. Attorney Shoshana L. Gillers. The case was investigated by the FBI and the Inspector General’s office of the U.S. Department of Labor.

United States v. Andrew Carr

Dr. Andrew Carr, a licensed chiropractor, was charged with one count of health care fraud.

According to the charges, Carr operated numerous chiropractic businesses in the Chicago suburbs over the past six years.

The complaint alleges that Carr submitted claims to

• Blue Cross Blue Shield of Illinois (which administers several union health and welfare funds in the Chicago area),
• Aetna, Inc., and
• Professional Benefits Administrators

for chiropractic services that were never rendered. The investigation is ongoing.

Andrew Carr, 41, of Lake in the Hills, was arrested this morning and will appear before the Honorable Jeffrey Cole, U.S. Magistrate Judge, for an initial appearance today at 1:15 p.m.

AUSAs Steven Grimes and Shoba Pillay represent the government. The case was investigated by the FBI, the Office of the Inspector General of the U.S. Department of Labor, and the U.S. Department of Labor Employee Benefits Security Administration.

United States v. U.S. Occupational Health

U.S. Occupational Health, a medical services company that performed physical examinations and medical testing for employees of private and governmental entities, was charged by criminal information yesterday today with one count of mail fraud.

According to the charges, the City of Chicago (“the City”) used USOH to perform physical examinations and medical testing on applicants and employees of various City departments, including

• the Chicago Police Department (“CPD”) and
• the Chicago Fire Department (“CFD”).

USOH’s contract with the City required, among other things, that the results of certain medical tests performed for the CPD and CFD — specifically,

• pulmonary function studies,
• EKGs, and
• x-rays

– be reviewed and interpreted by board-certified specialists in pulmonology, cardiology, and radiology.

The criminal information alleges that between 1999 and 2005, USOH defrauded the City by falsely representing that the results of tests performed at USOH had been reviewed by board-certified specialists in pulmonology, cardiology, and radiology when, in fact, such board-certified specialists had not reviewed or interpreted the results of these tests.

USOH accomplished this, in part, by using signature stamps of actual board-certified specialists to sign letters indicating that the specialists had reviewed and interpreted the results of tests performed at USOH. Overall, USOH examined in excess of 10,000 applicants for the CPD and CFD, and USOH caused the City to overpay USOH approximately $600,000 as a result of the fraud.

U.S. Occupational Health, an Illinois corporation, will be arraigned at a later in U.S. District Court.

The government is being represented by Assistant U.S. Attorney Rick Young. The case was investigated by the FBI and the City of Chicago Inspector General’s Office.

It follows:

Friends,

If you are following the news at all you know that this current veto session in Springfield is probably one of the most important in our state’s history. Legislation involving income taxes, Medicaid reform and whether or not to abolish the state’s death penalty are just a few of the “hot button” issues that are being debated in the General Assembly.

At the end of this veto session I will send you an update about which bills passed and which did not.

Please know that as pressure is put on lawmakers to raise the state’s income tax I will stand firm in my belief that this is the worst possible time to raise taxes on the people of Illinois.

I will not support any measure that increases the personal income tax to either 5.25% or 5.5% and increases the corporate income tax to 10.9%.

I am very happy to report that the House has approved sweeping reforms to Medicaid that will save $800 million for this costly program. I served on the special Medicaid Reforms committee and I believe the results of our work will go far in controlling state spending.

Medicaid is one of the fastest growing segments of Illinois’ budget and unfortunately it is a system that is often abused. The bill that now awaits the Governor’s signature puts more stringent eligibility requirements in place and imposes a two year moratorium on eligibility and program expansions.

A key component of the reforms is that now income and Illinois residency will be verified for all applicants. The new law also allows for data sharing between state agencies for electronic eligibility verification.

The bill also ends the practice of automatic renewal of eligibility for the program.

In the past re-enrollment forms were automatically sent out to Medicaid users and it was assumed that individuals were still eligible. Moving forward there will be no assumption that all users will re-qualify each year.

The bill also reigns in runaway spending associated with the All Kids Insurance Program by capping eligibility requirements at 300 percent of the federal poverty level. When the All Kids program was implemented by Governor Blagojevich in 2005 there was no income cap tied to the program and benefits were also offered to undocumented residents. The All Kids reforms will significantly reduce fraud and help ensure that resources are directed only to those families truly in need.

Other components of the bill include a more holistic approach to caring for Medicaid patients by moving more into managed and integrated care programs, and a new provision which allows for a $2,000 civil penalty for each fraudulent claim that is made for benefits or payments.

Looking ahead, the 97th Illinois General Assembly will be sworn into office on Wednesday, January 12.

One key proposal being brought forth by House Republicans is common-sense procedural reforms to the rules for bringing bills forward to the floor of the House of Representatives for consideration.

We live in a democracy and as such Illinois residents deserve to have a voice in their state government. Unfortunately, often times that is not the case. Today in Illinois we are subject to a “power of one” form of government.

In November of 2010 the people of Illinois elected the 118 members of the Illinois House of Representatives. Each of the 118 was elected to represent the will of approximately 100,000 constituents from their home district.

But for 26 of the last 28 years in Illinois, one man- and his set of rules- has governed the Illinois House; circumventing our democracy and placing the power over all legislation into the hands of one man- the Speaker of the House.

The public has a right to expect that their ideas and concerns, brought forward in Springfield by their elected representatives, will receive fair consideration on the House floor.

However, many times good legislation is blocked from ever receiving consideration by the 118 members of the House.

Today, moving a bill to the House floor for consideration requires a unanimous vote of the Rules Committee. In other words, 117 of the 118 State Representatives can be in favor of bringing a bill to the floor for immediate consideration and discussion, but if the “one” objects, the bill can be blocked.

Is that democracy?

Is that representation of the people by the people?

The following procedural reforms are being proposed so that Illinois can begin to change back into a true democracy where Illinoisans will have a legitimate voice in their state government:

• Guaranteed consideration of any bill supported by 71 members of the House of Representatives rather than the requirement of unanimous approval of the Rules Committee
• Advanced Notice of Hearings of the Rules Committee as well as Notice of the legislation they intend to discuss (currently deliberations are often secretive, held with little or no notice and in small rooms that do not accommodate non-committee members)
• A Mandatory Public Review Period Prior to Committee Action on Amendments to Bills
• Specific, line-item spending for state programs so people know how much money is being spent and on what
• Regular reviews of state programs to ensure efficiency and effectiveness A Mandatory Public Review Period before Passage of any Budget Bill
• Decreasing the number of House Committees by half, from 60 to 30

These procedural rules changes bring common sense to a currently flawed process. If approved, they will go far in increasing transparency, reestablishing a democracy in Illinois and in preventing a situation where one man has the power to stop any piece of legislation that he feels does not further is own personal agenda.

As always, do not hesitate to call or email me if you have additional questions on these or other new laws. I can be reached at (815) 459-6453 or via e-mail at mike@miketryon.com.

Best Regards,

Michael W. Tryon, State Representative, District 64