Florida man involves Ellwood City Medical Center in multi-million health care fraud and kickback scheme
PITTSBURGH - A federal judge has handed down a ten-year prison sentence to a Fort Lauderdale, Florida man convicted of three health care fraud and kickback schemes, one of which involved a Lawrence County hospital.
Fifty-nine-year-old Daniel Hurt was also ordered to pay more than $97 million in restitution and to forfeit more than $30 million and the proceeds from the sale of a yacht for conspiring to commit health care fraud and conspiring to pay and receive unlawful kickbacks.
According to the U.S. Attorney, Hurt schemed to receive illegal kickbacks from cancer genomic (CGx) testing, which was billed as if the testing were done in the Western Pennsylvania. Medicare suffered a loss of more than $25 million from that scheme.
CGx testing uses DNA sequencing to detect mutations in genes that could indicate a higher risk of developing certain types of cancers in the future.
Hurt admitted that he and his co-conspirators acquired thousands of CGx testing samples from Medicare beneficiaries located throughout the United States. Marketers used targeted campaigns to induce beneficiaries to submit CGx cheek swab specimens sent to their homes or provided to them at purported “health fairs” held throughout the United States.
Hurt had the CGx specimens sent to Ellwood City Medical Center in Lawrence County, using the hospital for Medicare billing, even though the hospital had no valid equipment to conduct CGx testing.
Hospital staff were required, at Hurt’s direction, to repackage the samples and send them to third-party laboratories that could complete the testing.
To justify Medicare reimbursement for the CGx testing, Hurt and his co-conspirators obtained CGx prescriptions from telemedicine physicians, even though the doctors did not conduct proper telemedicine visits, were not treating the Medicare beneficiaries for cancer or symptoms of cancer, and did not use the test results in the treatment of the beneficiaries.
Hurt had hospital staff transfer millions of dollars from ECMC created accounts to bank accounts that Hurt controlled. Hurt admitted using funds to pay millions of dollars in kickbacks to the marketers, among others, in exchange for their efforts to obtain CGx samples.
To disguise such kickbacks, Hurt had sham contracts with the marketers to make it appear that they were engaged in, and being paid for, legitimate marketing and referral services.
Acting through entities he controlled, Hurt had similar agreements and business arrangements with Ellwood City Medical Center that disguised the payments he obtained from the facility as purportedly legitimate payments, including payments related to management services at ECMC’s laboratory. Payments, in fact, were based on the volume of CGx tests and the amount of resulting Medicare reimbursements.
Hurt also admitted that he and others used a portion of Medicare reimbursements obtained through the fraudulent CGx claims to engage in transactions that included $3 million in payments toward the purchase of a luxury watercraft in Florida called “In My DNA.”
Investigators also says Hurt and others ran an illegal kickback scheme victimizing both TRICARE—a program that provides civilian health care benefits for military personnel, military retirees, and military dependents—and CHAMPVA—a health care benefit program run by the Department of Veterans Affair.
In all, that scheme caused a loss to TRICARE of more than $18 million and to CHAMPVA of more than $450,000.
Hurt’s third scheme involved illegal kickback payments and cancer genomic testing that cost Medicare of at least $53.3 million.
Investigators say Hurt admitted that he owned several clinical laboratories that conducted or arranged for a variety of medical tests, and that he paid kickbacks and bribes to various entities who supplied referrals and orders for CGx for Medicare and other health care benefit program beneficiaries, even if the tests weren’t medically necessary.
The labs submitted claims for payment to Medicare for the CGx tests, and Medicare reimbursed the laboratories without knowing that the services were not medically necessary or were procured through the payment of kickbacks.
Hurt received at least $26.9 million from the $53.3 million reimbursed by Medicare.
