After banned from Medicare, podiatrist bills $1M for fake care, including double-amputee’s feet

Introduction

Medicare says it wasn’t its responsibility to keep tabs on a Maryland podiatrist who was banned from the program in 2007 for fraud, then submitted more than $1 million in fake bills to Medicare Advantage insurers.

Dr. Larry Bernhard, a podiatrist from Gambrills Md., last week pled guilty to submitting hundreds of claims to Medicare Advantage on behalf of nursing home patients he did not treat. In one case involving a double-amputee, Bernhard submitted 18 bills—totaling $4,830—for foot care he never provided, according to a plea agreement with the U.S. Justice Department.

Bernhard will be sentenced in November and faces up to five and one-half years in prison. He also could lose his medical license.

It was the second time the podiatrist admitted to defrauding the government-funded Medicare program.

In October 2007, Bernhard was ordered to repay more than $12,000 for falsely billing the government and was barred from participating in Medicare and Medicaid. His name was added to the Health and Human Services Department’s list of nearly 50,000 names of physicians, nurses and other providers the Health and Human Services Department has banned from the public-funded healthcare programs.

But that didn’t stop Bernhard from collecting money from the massive U.S. entitlement program.

The same month in 2007 that he signed a settlement with the government, he began sending fake bills to Medicare Advantage, a federally-funded program that is administered by private insurance companies, in this case, UnitedHealth Group and Bravo Health, which was later acquired by HealthSpring Inc.

The Centers for Medicare and Medicaid, a division of HHS, says it is the responsibility of those companies to ensure that providers submitting bills are eligible to participate in Medicare Advantage. CMS does not see the names of providers that bill Medicare Advantage for payment, a spokesman said.

Both UnitedHealth and HealthSpring refused to comment to iWatch News, or to describe what general steps they take to ensure providers are eligible to participate in the Medicare Advantage program.

Under the Medicare Advantage program, the government pays insurers a set amount for each patient each month, regardless of how much care the patient actually receives. The program has been criticized by some Democratic lawmakers in the past for higher per-patient costs than traditional, government-administered Medicare.

But health care experts say Medicare Advantage isn’t necessarily more vulnerable to fraud than Medicare, which has struggled to rein in inflated and fake bills for years.

A new report by the Government Accountability Office today found that CMS is behind schedule in building an Integrated Data Repository, to help it detect suspicious transactions that could be fraudulent. Data from the Medicare Advantage program has not yet been added to the repository, according to the watchdog arm of Congress.

Margaret Murphy, associate director at the Center for Medicare Advocacy, an organization that supports Medicare recipients, says she worries if private insurers in Medicare Advantage provide the same level of service as the traditional Medicare program and whether there is enough government oversight of how insurers administer the health care.

“They have a minimum set of requirements they’re supposed to meet,” Murphy said of private insurers, “but it’s really hard to get the government to say what they’re doing to enforce that.”

Insurance companies in Medicare Advantage are instructed to check the names of providers against the government database of banned participants, said CMS spokesman Tony Salters. While CMS periodically audits insurers in Medicare Advantage, it does not currently check their compliance with the list of banned providers.

Medicare Advantage regulations say “employing or contracting” with banned providers could subject insurers to sanctions ranging from fines to being thrown out of the Medicare Advantage program.

Similar offenses by other Medicare Advantage insurers have not resulted in fines, Salters said.

The Maryland podiatrist’s plea agreement calls for him to repay $1.1 million to the two insurance companies. Bernhard faces a minimum sentence of two years, which is mandatory for a charge of identity theft, which in this cae is linked to his use of names, Social Security numbers and other personal information of patients that he did not treat.

Bernhard’s lawyer, Joseph L. Evans, told iWatch News that after the podiatrist was banned from Medicare in 2007, it was difficult for him to earn a living because most of his patients were residents of nursing homes. “Those circumstances are infused with Medicare,” said Evans, a federal public defender.

Bernhard’s medical license is up for review before Maryland’s Board of Podiatric Medical Examiners when it meets later this week, said Eva Schwartz, executive director of the state group. “At least on the surface, it looks pretty egregious,” she said.