Medicare Fraud Scheme Relied on “Doctored” EMR Scheme
A physician, his attorney wife and another individual have been indicted on felony Medicare fraud charges in Missouri. The case may be one of the first of its kind using an electronic medical records (EMR) system to create false patient progress notes.
On October 14th, a federal grand jury sitting in Missouri indicted Yev Gray, M.D., his wife Natalie Gray and James Sayadzad. All three are officers of Aggeus Healthcare; a Chicago based healthcare company that provides podiatry services in 16 states. The services are primarily supplied to nursing home patients.
Charges include conspiracy to commit healthcare fraud and making false statements relating to healthcare matters. Each faces a maximum of 25 years in prison if convicted and hefty fines.
The Inspector General of Health and Human Services (OIG) has previously warned of potential fraud involving electronic medical records but we are aware of no actual cases until these indictments last week.
The OIG has previously expressed concerns about the “cut and paste” feature of EMR and the lack of audit logs that would reveal the “who and when” whenever a medical record was created or altered.
According to the indictments, Dr. Gray and his wife created an EMR system that automatically generated patient progress notes that were not accurate and did not match the patient’s condition and treatment. Podiatrists that contracted their services to Aggeus were required to use the EMR system and couldn’t add information that might indicate that certain services weren’t needed or even provided.
As an example, if a podiatrist claimed that he or she debrided several toenails, Aggeus’ EMR system automatically indicated that the patient suffered from fungus, peripheral vascular disease and pain. This would be done automatically even if the patient suffered no paid or any of the listed diseases. According to the indictment, the system would automatically insert a progress note that read, “The patient or staff request treatment because the toenails are painful to a degree as to affect ambulation and balance.”
Toenail clipping or debriding is considered routine care and is normally not reimbursable by Medicare. By diagnosing certain diseases or claiming the patient was in pain, however, Aggeus was able to bill Medicare for the services.
The Grays advertised to nursing homes throughout the United States that they would provide foot care services to patients regardless of insurance. That freed up nursing home staff and resulted in many homes signing contracts with Aggeus. Unfortunately, taxpayers paid for many of these services even though they were not eligible for Medicare.
If a facility or podiatrist complained, the Grays would say that Medicare required the information in the file notes. Yev Gray, M.D. is the owner and president of Aggeus while his wife Natalie served as the Director of Corporate and Legal Affairs. According to court records, Ms. Gray was in charge of Medicare billing.
Cut and paste medical notes are common according to medical professionals that spoke with us but no one is aware of an EMR that auto-populates symptoms, diagnosis and treatment. How many of the services billed to Medicare by Aggeus were not medically necessary or performed remains to be seen. With services in many states, the government believes that overpayments could be in the millions of dollars.
Medicare fraud has reached epidemic proportions in the United States and costs taxpayers billions of dollars annually. As fast as regulators uncover a new scheme dishonest medical professionals invent new ways to cheat the system. We will see how many new EMR based Medicare fraud cases are uncovered as healthcare moves to more automated record keeping systems.
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Have information about Medicaid or Medicare fraud? The federal government and many states pay large awards to whistleblowers with inside information about fraud involving government funded healthcare. A few states have laws that also extend to healthcare fraud involving private insurance. Reporting the fraud to a Medicare fraud tip line won’t get you an award, however. To get the large awards, one must file a False Claims Act lawsuit in court.
Want more information on becoming a whistleblower and collecting an award for reporting Medicare fraud? Give us a call. Our clients have received over $100 million in awards. For more information contact attorney Brian Mahany at or by telephone at (direct).
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