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Federal Medicare Fraud

Recently, Allstate Hospice LLC. and Verge Home Care LLC. were ordered to pay $1,847,279.36 as a fine for Medicaid Fraud. The companies had to pay the money as a result of Medicare fraud in the form of unlawful referrals.





Why was it illegal?

Under the Medicare laws there are many provisions that make certain things illegal. One provision commonly known as the Stark law, or officially known as the Physician Self-Referral law, prohibits illegal kickback schemes. The Stark law specifically prohibits entities from billing Medicare for certain services referred by physicians. The law aims to prevent any referrals where the physician and entity have a financial relationship that would affect the referral. Essentially, the government wants doctors to refer services because they are in best interest of the patient and not because of financial interest.

The anti-kickback statute was created to stop people from referring patients in order to receive money where the services provided were paid by Medicare, Medicaid, or other federally funded programs. The goal is to ensure that every patient gets the best medical advice.


The Investigation

In 2016, the feds started to investigate these companies for unlawful referrals. During that time, it was revealed that the founders, Onder Ari, 49 and Sedat Necipoglu, 48 were paying significant referral fees and gave other perks to physicians that were giving them significant amount of referrals. These perks included tickets to sporting events, paying for travel expenses, and other gifts. Doctors that gave significant referrals were also engaged in a medical directorship agreement with the companies. The agreements would pay the doctors a monthly fee for their position. It was also revealed that those payments were in excess of what a medical directorship would normally pay.


What should you know?

The federal government is very aggressive in pursuing Medicare fraud. The US Attorneys see these cases as major corruption and an extreme abuse of the public trust. Prosecutors want to make example of offenders to prevent waste, but also to save the lives of patients that are not getting the best advice from doctors due to their conflict of interest. Should you get a call from any investigating agency or the US Attorney’s office, you should take the matter very seriously.


Published by Jason Chan, Boston White Collar Defense Attorney


© 2017 by John Seed & Jason Chan Associates   |   Boston, Worcester, New Bedford, Beverly   |   (781)-343-1384 

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