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

OWNER OF FORMER SOUTH SUBURBAN HOME HEALTH CARE BUSINESS SENTENCED TO 10 YEARS IN PRISON FOR $2.9 MILLION MEDICARE FRAUD

CHICAGO — The co-owner of a former south suburban home health care business was sentenced today to 10 years in federal prison for defrauding Medicare of more than $2.9 million by submitting tens of thousands of false claims annually that misrepresented medical services provided to beneficiaries.

BAHIR HAJ KHALIL, the executive manager and co-owner of House Call Physicians LLC, in Palos Hills, was the last of three defendants to be sentenced following Khalil’s conviction at a trial in September.

“I want the word to go forth from this sentence that this kind of crime does not pay and will be treated harshly,” U.S. District Judge Charles Kocoras said in Federal Court in Chicago. Judge Kocoras imposed the maximum sentence of 10 years on each of seven counts and ordered them to be served concurrently.

Khalil, 34, of Palos Hills, a native of Syria and a Canadian citizen who was not authorized to work in the U.S., has remained in federal custody since he was arrested in July 2011 and House Call Physicians closed its doors. He will be subject to deportation after completing his sentence.

“Khalil preyed on Medicare beneficiaries — people who were sick, elderly and disabled — and exploited them because they were vulnerable and easy to use to accomplish his fraud. To Khalil, the math was simple: Find people on Medicare; perform unnecessary tests and services; bill Medicare; get paid,” the government argued at sentencing.

Khalil was convicted of six counts of health care fraud and he and his business partner, MOHAMMED KHAMIS RASHED, 46, of Chicago, were also convicted of one count of visa fraud for attempting to illegally obtain a work visa for Khalil. Rashed, a former engineer for the City of Chicago who invested in House Call and was a co-owner, was sentenced by Judge Kocoras on Tuesday to six months in prison and fined $20,000.

A third defendant PASCHAL U. OPARAH, 47, of South Holland, a suspended podiatrist who pleaded guilty to health care fraud last April and cooperated with the government’s investigation, was sentenced on Dec. 12 to 18 months in prison, and was ordered to pay $791,095 in restitution.

Khalil was ordered to pay restitution and forfeiture, both in the amount of $2,934,392, representing proceeds from the fraudulent billing scheme.

The forfeiture includes approximately $155,575 that was seized when he was arrested.

Over the course of the fraud, Khalil wrote himself more than $400,000 in checks from the company’s bank account.

According to trial evidence and court records, the fraud scheme involved billing for:
services that were not medically necessary, including uncomfortable nerve conduction tests;
services purportedly provided by physicians when, in fact, they were performed by physician assistants; and services purportedly performed by a licensed podiatrist when, in fact, they were performed by Oparah, whose license was suspended.

Khalil also directed the false certification of patients as eligible for home health services when, in fact, they were not homebound as required by Medicare.

Although he had no medical training or license, Khalil established House Call Physicians in 2006 and engaged in Medicare fraud from that time until he was arrested in July 2011.

In secretly recorded conversations with physicians and physician assistants, Khalil made it clear that he believed that he, not the doctors, should decide when patients needed a procedure like a nerve conduction or bone density tests.

The government was represented by Assistant U.S. Attorneys Patrick Otlewski and Ryan Hedges.

Gary Shapiro

The sentences were announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois; Thomas R. Trautmann, Acting Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; 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 James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General. The U.S. Railroad Retirement Board Office of Inspector General also participated in the investigation. The investigation was conducted by the Medicare Fraud Strike Force, which expanded to Chicago in 2011, and is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce anti-fraud laws around the country.

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

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.

Gary Shapiro

“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:

CHICAGO AREA DERMATOLOGIST AND PSYCHOLOGIST CHARGED IN NATIONWIDE MEDICARE FRAUD STRIKE FORCE TAKEDOWN

Total of 91 Defendants Charged Nationwide for Submitting
Approximately $430 Million in False Billing

CHICAGO — An area dermatologist and a psychologist were charged this week with engaging in separate health care fraud schemes to defraud the Medicare program and/or private health insurers of millions of dollars, federal law enforcement officials announced today. Also today, a co-owner of a former south suburban home health care business was convicted of a federal charge, a week after the other co-owner was convicted of health care fraud by a federal jury.

The Chicago charges are part of a nationwide takedown by Medicare Fraud Strike Force operations in seven cities, announced today by the Departments of Justice and Health and Human Services, that led to charges against 91 defendants for their alleged participation in schemes to collectively submit approximately $429.2 million in fraudulent claims.

In Chicago, two defendants were charged in separate indictments filed yesterday and Tuesday in U.S. District Court. One defendant, a licensed psychologist, was charged with health care fraud for allegedly over-billing the Medicare program, while the dermatologist was charged with mail and wire fraud for defrauding Medicare and private health insurance companies.

“Today’s enforcement actions reveal an alarming and unacceptable trend of individuals attempting to exploit federal health care programs to steal billions in taxpayer dollars for personal gain,” said Attorney General Holder. “Such activities not only siphon precious taxpayer resources, drive up health care costs, and jeopardize the strength of the Medicare program — they also disproportionately victimize the most vulnerable members of society, including elderly, disabled and impoverished Americans.”

“These cases ought to be taken as a warning that dishonest medical providers ought to think twice before cheating Medicare and private insurers,” said Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois.

Details of the Chicago cases follow:

United States v. Robert Kolbusz

Dr. Robert Kolbusz, a dermatologist in Downers Grove, was charged in a seven-count indictment returned yesterday with defrauding Medicare and private health insurance companies by submitting false claims for hundreds of patients resulting in millions of dollars of losses. Kolbusz falsely diagnosed patients with actinic keratosis, or sun-induced skin lesions that have the potential to become cancerous, and then billed Medicare, Blue Cross Blue Shield of Illinois, Aetna, and Humana for treatments that were ineffective and falsely documented.

Kolbusz, 55, of Oak Brook, was charged with four counts of wire fraud and three counts of mail fraud. He will be arraigned at a later date in U.S. District Court.

Between 2003 and 2010, Kolbusz allegedly falsely documented patients’ charts to support medically unnecessary, cosmetic treatments that he ordered. In some instances, he falsely documented the removal of more than 1,000 lesions from patients over several years of treatment, according to the indictment.

The government is represented by Assistant U.S. Attorneys Stephen Lee and Tinos Diamantatos. The case was investigated by the Federal Bureau of Investigation and the Health and Human Services Office of Inspector General (HHS-OIG.)

United States v. Sharon A. Rinaldi

Sharon A. Rinaldi, a licensed psychologist in Illinois, was charged in a five-count indictment returned on Tuesday with defrauding Medicare by submitting thousands of false claims for providing psychotherapy services to Medicare beneficiaries residing in skilled nursing homes in the Chicago area.

Rinaldi, 57, of Inverness, was charged with five counts of health care fraud. She is scheduled to be arraigned on Oct. 10 in U.S. District Court. The indictment also seeks forfeiture of more than $100,000 that was seized from her home and a personal bank account.

According to the indictment, between December 2008 and August 2012, Rinaldi claimed that she provided services to Medicare beneficiaries who were deceased at the time; that she provided services on certain dates when she was in other locations, such as Las Vegas and San Diego; and she inflated the number of hours that she had provided services on particular dates, often exceeding 24 hours in a single day.

The government is represented by Assistant U.S. Attorneys Paul Tzur. The case was investigated by the FBI and the HHS-OIG.

United States v. Khalil, et al.

In the home health care fraud case, which was indicted last year, a federal jury last week convicted Bhair Haj Khalil, the co-owner and executive manager of House Call Physicians LLC in Palos Hills, of six counts of health care fraud for submitting false claims totaling more than $2.5 million to Medicare, resulting in losses of more than $1.15 million.

Khalil, 34, formerly of Palos Hills and who is in federal custody, and his business partner, Mohammed Khamis Rashed, 46, of Chicago, were also convicted of visa fraud for attempting to illegally obtain a work visa for Khallil.

After a trial for both defendants last month, Khalil was convicted by a jury on Sept. 25, while Rashed’s case was tried by U.S. District Judge Charles Kocoras, who issued his guilty verdict today.

A third defendant, Paschal U. Oparah, a suspended podiatrist, pleaded guilty in the case last spring. All three are scheduled to be sentenced in December.

Evidence in the case showed that the fraud scheme involved billing for home health services as if they were performed by physicians when they were actually performed by physicians’ assistants; billing for podiatry services that were actually performed by Oparah, whose license was suspended; and falsely certifying that patients were eligible for home health services when they were not and causing medically unnecessary tests to be provided to Medicare beneficiaries.

The government is represented by Assistant U.S. Attorneys Patrick Otlewski and Ryan Hedges. The case was investigated by the FBI, the HHS-OIG, and the U.S. Department of Labor Office of Inspector General.

The charges in these cases carry the following maximum penalties on each count: health care fraud and visa fraud — 10 years in prison, and mail and wire fraud — 20 years in prison, and a $250,000 maximum 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.

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. Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 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.

Gary Shapiro

The results of the nationwide takedown were announced today by Attorney General Holder, HHS Secretary Kathleen Sebelius, Assistant Attorney General Lanny A. Breuer of the Criminal Division, FBI Associate Deputy Director Kevin Perkins, Inspector General Daniel R. Levinson of the HHS-OIG, and Dr. Peter Budetti, Deputy Administrator for Program Integrity of the Centers for Medicare and Medicaid Services (CMS). Mr. Shapiro announced the Chicago charges together 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 public is reminded that indictments contain only charges and 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.

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

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.

Gary Shapiro

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.

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

CHICAGO AREA SURGEON SENTENCED TO 10 MONTHS IN CUSTODY FOR MAKING FALSE STATEMENTS ABOUT SERVICES AND MEDICARE BENEFITS

CHICAGO — A Chicago area vascular and thoracic surgeon was sentenced today to 10 months in federal custody after being convicted at trial of making false statements in post-operation reports relating to health care services and Medicare benefits.

The defendant, DR. JOHN NATALE, was found guilty following a week-long trial in May of two counts of making false statements by a jury that also acquitted him of two counts of health care fraud and one count of mail fraud for allegedly defrauding Medicare.

Natale, 63, of South Barrington, was ordered to begin serving his sentence on Nov. 1by U.S. District Judge Rebecca Pallmeyer, who also imposed a fine of $40,000 and periods of community service during one year of supervised release after incarceration.

“The goal here was to collect more than he [Natale] otherwise would have been entitled,” Judge Pallmeyer said in determining that there was an intended loss to Medicare of at least $10,000.

Natale faced a maximum sentence of five years in prison and a federal sentencing guideline range of 15 to 21 months after Judge Pallmeyer also found that Natale had obstructed justice while testifying in his own behalf at trial.

Natale specialized in repairing abdominal aortic aneurysms, which is a weakening of the artery, and the trial focused on six surgeries he performed in 2003 and 2004 on patients at Northwest Community Hospital in Arlington Heights.

Natale later operated at Swedish Covenant Hospital in Chicago, according to his trial testimony.

Northwest Community Hospital medical officials, who also testified at trial, cooperated with the government’s investigation.

The evidence at trial showed, and the jury found, that for at least two patients in 2004, Natale prepared false post-operation reports that, among other things, contained extensive details about aneurysm repairs that he never performed, and falsely described the surgeries he did perform as being more complex and elaborate than they actually were.

In the case of one patient whose medical condition deteriorated a year after Natale operated, another surgeon testified that he had to untangle the falsehoods in Natale’s records, which, if relied upon, would have had a serious impact on his subsequent treatment of that patient.

The government was represented by Assistant U.S. Attorney Amarjeet Bhachu.

The sentence 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 Thomas P. Brady, Inspector-in-Charge of the Chicago Office of the U.S. Postal Inspection Service.

The investigation was conducted by the Medicare Fraud Strike Force, which expanded to Chicago in 2011, and is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce anti-fraud laws around the country.

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

HOME HEALTH CARE ADMINISTRATOR SENTENCED TO 20 MONTHS IN FEDERAL PRISON FOR HEALTH CARE FRAUD AND KICKBACK SCHEME

ROCKFORD — An Elmhurst, Ill., woman was sentenced today in federal court to 20 months in federal prison on her conviction for health care fraud and a kickback scheme. Merigrace Orillo, 45, co-owned and operated Chalice Home Healthcare Services, Inc., with her husband Virgilio Orillo. Chalice had offices in Chicago, Freeport, and Morris, Illinois.

Medicare is a national healthcare program which provides free or below-cost health care to eligible beneficiaries, primarily persons who are 65 years of age or older. Chalice was an enrolled provider with the Medicare program since 2004.

According to a written plea agreement, Chalice’s nurses, nurses aids, physical therapists, and occupational therapists provided services to patients in their homes. Chalice was usually paid for these services through the Medicare program.

Orillo admitted that from January 2007 through April 2010, she and her husband falsified documents in order to increase the payments Chalice received from Medicare.

The falsifications made Chalice’s patients appear to be sicker than they actually were and in need of greater care than they actually required.

Orillo also admitted that she knowingly assisted her husband in paying cash kickbacks to a Chicago doctor.

The kickbacks were paid in return for the doctor referring patients to Chalice for home healthcare services.

Orillo admitted that she withdrew cash from Chalice’s bank account and provided that cash to her husband to be used to pay these kickbacks. At the sentencing hearing, the court found that Orillo’s scheme caused a loss of more than $700,000 to the Medicare program.

The indictment, which was filed on February 15, 2011, charged both Orillo and her husband Virgilio with healthcare fraud.

The charges against Virgilio Orillo were dismissed after he died on August 30, 2011.

Frederick Kapala

Today’s sentencing hearing was conducted by United States District Judge Frederick J. Kapala.

In addition to the 20 month federal prison sentence, Judge Kapala also ordered Orillo to pay $744,481 in restitution to the Medicare Trust Fund. Orillo will not be eligible for parole on her prison sentence.

The investigation was conducted by the Medicare Fraud Strike Force, which expanded to the Northern District of Illinois in 2011, and is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce anti-fraud laws around the country.

The sentencing was announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Lamont Pugh, III, Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Chicago.
The government was represented by Assistant U.S. Attorney Scott A. Verseman.

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

CHICAGO PHYSICIAN SENTENCED TO 30 MONTHS IN PRISON FOR HEALTH CARE FRAUD INVOLVING UNNECESSARY PATIENT TESTS

CHICAGO — A physician who operated a south side medical clinic, Dr. Jaswinder Rai Chhibber, was sentenced to 2½ years in federal prison for engaging in a health care fraud scheme between 2007 and July 2010, federal law enforcement officials announced today.

Chhibber, who operated the former Cottage Grove Community Medical Clinic, located at 642 East 79th St., Chicago, was convicted following a trial in March of defrauding Blue Cross Blue Shield of Illinois by submitting false insurance claims for medically unnecessary tests he ordered for patients and using false diagnosis codes to justify those tests.

Chhibber, 50, of Schaumburg, was ordered to begin serving his 30-month prison term on Sept. 5 by U.S. District Judge Suzanne Conlon, who imposed the sentence, along with a $15,000 fine, late yesterday in Federal Court.

Chhibber was found guilty of five counts of healthcare fraud and four counts of making false statements involving a health care benefits program after a week-long trial. The jury found him not guilty of seven additional counts.

The evidence at trial showed that Chhibber

• ordered medically unnecessary tests,
• falsified patients’ medical records, and
• used false diagnosis codes on insurance claim forms in various fashions

for at least five patients who testified at trial, including two undercover federal agents who posed as patients.

Evidence also showed that Chhibber administered

• echocardiograms,
• electrocardiograms,
• nerve conduction studies,
• carotid doppler exams, and
• abdominal ultrasounds

for an unusually high percentage of his patients.

The sentence was announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, together with 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 Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The U.S. Department of Labor Office of Inspector General and the U.S. Railroad Retirement Board Office of Inspector General also participated in the investigation.

The investigation was conducted by the Medicare Fraud Strike Force, which expanded to Chicago in 2011, and is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce anti-fraud laws around the country.

The government is being represented by Assistant U.S. Attorneys Joel Hammerman and Samuel B. Cole.

An email from Mike Tryon about the next-to-the-last week in Springfield:

Key legislation was debated and voted on last week in the General Assembly. Here is an update of some of the more noteworthy items:

Bill to Curb use of Special Prosecutors Heads to Governor

After receiving unanimous support in the Illinois House in March, legislation that would put strict guidelines in place for judges who wish to appoint special prosecutors to investigate elected officials gained unanimous Senate support last week.

I was a sponsor of this bill.

House Bill 4797 was filed in response to the excessive bills associated with an investigation of McHenry County States Attorney Lou Bianchi, who was eventually acquitted on all charges.

To date, the taxpayers of McHenry County have had to pay more than $525,000 in special prosecutor costs.

According to the bill, before a judge can appoint a special prosecutor, he/she must first exhaust all efforts to find a state’s attorney from

• another county or
• the Illinois Attorney General to do the work.

If it is determined that a special prosecutor must be hired, the bill includes language that gives county boards a voice in discussions regarding costs and the right to see itemized bills.

House Approves Massive Medicaid Reforms

Historic Medicaid reforms – a key component to fixing the State’s budget crisis, were also approved last week.

While difficult, I supported the reforms.

Without meaningful Medicaid reforms, Illinois’ backlog of unpaid bills would grow to approximately $21 billion by 2017, a level of spending that is simply unsustainable.

The General Assembly’s action to cut nearly $1.6 billion from the State’s $11 billion Medicaid program will go far in helping get Illinois back on solid fiscal ground.

All Kids, the Democrats version of Govenror Jim Edgar's Kids Care which allowed coverage of illegal aliens.

With passage of Senate Bill 2840, an estimated 300,000 individuals are expected to be removed from Illinois’ Medicaid rolls because they

• do not meet income eligibility guidelines,
• are not Illinois residents,
• have died, or
• have aged-out of the All Kids program.

This eligibility verification alone will save taxpayers $350 million.

The bill also provides for a moderate rate reduction for hospitals of 3.5% and exempts Critical Access and Safety Net Hospitals from the reduction.

In addition, Senate Bill 2840 will do the following:

1. Roll back the Blagojevich expansion of Family Care by reducing the eligibility limit for parents to $30,000 for a family of four
2. Impose a $10 co-pay for emergency room visits
3. Require a $3.60 co-pay on all services and a $2 co-pay for generic medications
4. Limit prescription coverage to four prescriptions per month without doctor certification of need or specialty drug/condition exception
5. Eliminate funding for adult chiropractic services

Shortly after the House approval of SB 2840, the Senate also approved the bill. It awaits final action by the Governor.  [For who voted how, see here.  Democrat Jack Franks did not support the bill.]

Cigarette Tax Approved

A $1 a pack of cigarettes tax hike was passed by the Illinois House Friday.

Last week the House also voted to increase the cigarette tax in Illinois. Under current law, the State charges a tax on cigarettes that is equivalent to 98 cents per pack of 20.

Senate Bill 2194 would raise the cigarette tax to $1.98 per pack.

The additional revenue raised by this tax, an estimated $350 million per year, would garner a federal match, bringing in a total of $700 million for the State’s financially stretched Medicaid program.

SB 2194 also contains language intended to create a financial incentive for Illinois hospitals and hospital-affiliated health care facilities to provide charity health care to low-income and underserved Illinois residents.

SB 2194 was approved by the House by a vote of 60-52-0 and awaits action in the Senate.

I voted against this bill because I can not and will not support any additional taxes on the people of Illinois.

The key to getting Illinois’ finances in order involves making difficult decisions; not simply creating more revenue sources.

A video poker machine in Crystal Lake.

Gambling Expansion Approved

With many providers waiting months to be paid by the State, and painful cuts being imposed on Medicaid, many other State programs, and on the State’s own workforce, the House passed legislation this week for a new round of licenses to conduct gambling within a variety of Illinois venues.

Senate Bill 1849, as amended, would direct the State to award five additional licenses to operate riverboat casinos at specified locations throughout Illinois.

The bill would also authorize a Chicago casino and the operation of slot machines at Illinois racetracks.

SB 1849 would raise estimated gaming tax revenue of $200 million a year, with additional one-time revenues through the awarding of the additional gaming licenses.

The bill would also provide funding for many agricultural programs and the State Fairgrounds.

The House passed SB 1849 on Wednesday by a vote of 69-47-2; the bill is currently awaiting a concurrence vote in the Senate.

Governor Pat Quinn has indicated that he does not support the proposal.

I voted against the bill, and while I am not opposed to a MODEST expansion of gambling, I feel strongly that revenues from any expansion need to be earmarked, at least in part, toward a pension stabilization fund.

General Assembly Works Through the Weekend

The General Assembly worked through the weekend and is also in session today. As your Representative, I am committed to staying in Springfield as long as it takes to make the required decisions that will lead us to a balanced budget for fiscal year 2013. I will continue to update you as other important pieces of legislation move through the process.

Remember our Military Today on Memorial Day

Lastly, as you gather with friends and family to celebrate this Memorial Day, please keep in your heart the brave men and women who have served in uniform and given their lives in service to our country. All of these heroes are deserving of our utmost respect today, and every day.

Sincerely,

Michael W. Tryon
State Representative, District 64

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

CHICAGO AREA SURGEON CONVICTED AT FEDERAL TRIAL OF MAKING

FALSE STATEMENTS RELATING TO HEALTH CARE BENEFITS AND SERVICES

CHICAGO — Dr. John Natale, a Chicago area vascular and thoracic surgeon, was convicted of two federal felony counts for making false statements in reports relating to health care benefits and services following a week-long trial in U.S. District Court. 

A jury deliberated several hours yesterday afternoon before

• convicting Natale of two counts of making false statements and
• acquitting him of
•  two counts of health care fraud and
• one count of mail fraud

Natale, 63, of South Barrington, remains free on his own recognizance while awaiting sentencing, which U.S. District Judge Rebecca Pallmeyer scheduled for Aug. 15.  He faces a maximum penalty of five years in prison and a $250,000 fine on each of the two counts.

Natale specializes in repairing abdominal aortic aneurysms, which is a weakening of the artery, and the trial focused on six surgeries he performed in 2003 and 2004 on patients at Northwest Community Hospital in Arlington Heights.

Natale currently operates at Swedish Covenant Hospital in Chicago, according to his own testimony at trial.

Northwest Community Hospital medical officials, who also testified at trial, assisted with the government’s investigation.

Natale was indicted last September for allegedly defrauding Medicare by submitting false claims for payment and by intentionally preparing fictitious medical reports that detailed medical procedures that he knew did not occur or were more complex than those he actually performed.

The evidence at trial showed, and the jury found, that for at least two patients in 2004, Natale  prepared false post-operative reports that, among other things,

• contained extensive details about aneurysm repairs that he never performed, and
• falsely described the surgeries he did perform as being more complex and elaborate than they actually were.

In the case of one patient whose medical condition deteriorated a year after Natale operated, another surgeon testified that he had to untangle the falsehoods in Natale’s records, which, if relied upon, would have had a serious impact on his subsequent treatment of that patient.

The government is being represented by Assistant U.S. Attorneys Amarjeet Bhachu and Christopher Niewoehner.

Patrick Fitzgerald

The conviction was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, together with 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 Thomas P. Brady, Inspector-in-Charge of the Chicago Office of the U.S. Postal Inspection Service.

The investigation was conducted by the Medicare Fraud Strike Force, which expanded to Chicago in 2011, and is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce anti-fraud laws around the country.

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

HOME HEALTH CARE ADMINISTRATOR PLEADS GUILTY TO FEDERAL HEALTH CARE FRAUD AND KICKBACK SCHEME

ROCKFORD — An Elmhurst, Ill., woman pleaded guilty today in federal court in Rockford to healthcare fraud and kickback violations. Merigrace Orillo (“Orillo”), 45, co-owned and operated Chalice Home Healthcare Services, Inc. (“Chalice”), with her husband Virgilio Orillo.

Chalice had offices in Chicago, Freeport, and Morris, Illinois. Orillo admitted that her fraud scheme caused a loss of more than $400,000 to the Medicare program.

Medicare is a national healthcare program which provides free or below-cost health care to eligible beneficiaries, primarily persons who are 65 years of age or older. Chalice was an enrolled provider with the Medicare program since 2004.

According to a written plea agreement, Chalice’s nurses, nurses aids, physical therapists, and occupational therapists provided services to patients in their homes.

Chalice was usually paid for these services through the Medicare program.

Orillo admitted that from January 2007 through April 2010, she and her husband falsified documents in order to increase the payments Chalice received from Medicare. These falsifications were made on documents known as OASIS forms.

The falsifications made Chalice’s patients appear to be sicker than they actually were and in need of greater care than they actually required.

In the plea agreement, Orillo also admitted that she knowingly assisted her husband in paying cash kickbacks to a Chicago doctor.

The kickbacks were paid in return for the doctor referring patients to Chalice for home healthcare services. Orillo admitted that she withdrew cash from Chalice’s bank account and provided that cash to her husband to be used to pay these kickbacks.

The indictment, which was filed on February 15, 2011, charged both Orillo and her husband Virgilio with healthcare fraud. The charges against Virgilio Orillo were dismissed after he died on August 30, 2011.

Healthcare fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, or a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater, as well as restitution to the victims. The kickback charge carries a maximum penalty of 5 years in prison and a $250,000 fine. The actual sentence will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.

The investigation was conducted by the Medicare Fraud Strike Force, which expanded to the Northern District of Illinois in 2011, and is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce anti-fraud laws around the country.

The guilty plea was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Lamont Pugh, Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Chicago.

The government is being represented by Assistant U.S. Attorney Scott A. Verseman.