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Nationally, hundreds swept up in Dept. of Justice crackdown on health care fraud.

By Teri Sforza | [email protected] | Orange County Register

PUBLISHED: October 3, 2020 at 8:10 a.m. | UPDATED: October 3, 2020 at 8:30 a.m.

Unbeknownst to Tarek Greiss, the feds were already listening.

The CEO of Beginnings Treatment Centers and South Coast Counseling in Costa Mesa — who “entered the world of addiction recovery through the front door, as a client” — was on the phone with his Tustin marketing firm, SeKe. It was March 18, 2019, and a new federal law, the Eliminating Kickbacks in Recovery Act of 2018, had kicked in just months before. The law makes giving or receiving money in exchange for addiction treatment referrals a federal crime.

Greiss said he “was hungry for admissions” and low on detox-eligible patients — the people who bring in the biggest insurance payouts, according to a federal indictment filed under seal Sept. 16. He discussed the monetary value of 19 people — values based on the insurance reimbursements they could generate — and compared that to payments already made to SeKe under a marketing services agreement that prosecutors called a “sham.”

That marketing agreement — whereby Greiss paid SeKe a flat fee of $30,000 a month — was designed to meet the new law’s requirements by not basing payments on the number of individuals referred for treatment. But Greiss said he’d “rather get admissions” than get money back from SeKe, undercutting the idea that payments weren’t tied to patient volume, the indictment asserts.

Greiss, who was an anesthesiologist before addiction cost him his medical license in Nevada and he entered the treatment industry in California, is among 345 people charged in a what the U.S. Department of Justice is calling “a historic nationwide enforcement action” that has ensnared more than 100 doctors, nurses and other licensed medical professionals for a wide variety of alleged health care fraud.

Greiss pleaded not guilty to conspiracy and “illegal remunerations for referrals to clinical treatment facilities” on Sept. 28 and was released on a $10,000 bond signed by his mother in Walla Walla, Wash. Trial is slated for November.

“Mr. Greiss is innocent and intends to challenge the government’s allegations at trial,” said his attorney, John L. Littrell, a partner with Bienert | Katzman, which has an office in San Clemente. “This is an industry with a lot of bad actors, but Mr. Greiss is not one of them.

“These allegations have nothing to do with the quality of the care Greiss provides to his patients,” Littrell added. “He has helped countless people endure the most difficult periods of their lives and go on to achieve lasting sobriety.”

Beginnings Treatment Centers, a for-profit enterprise, has several detox facilities in Costa Mesa, according to state records. South Coast Counseling, meanwhile, is registered as a nonprofit. It reported revenue of $8.4 million, and expenses of $8.1 million, in 2018, the most recent year available, according to documents filed with the IRS..

‘Abused along the way’

Brian C. Rabbitt, Acting Assistant Attorney General for the Criminal Division, U.S. Department of Justice

The massive federal crackdown charges defendants with submitting more than $6 billion in fraudulent claims to federal health care programs and private insurers. That includes some $4.5 billion connected to telemedicine schemes; $845 million connected to substance abuse treatment or “sober home” schemes; and another $806 million in other health care fraud and illegal opioid distribution schemes.

“These ‘sober homes’ cases are particularly egregious, not just because of the substantial amounts of financial loss they cause, but also because of the significant harm they cause to patients who are used and abused along the way,” said Acting Assistant Attorney General Brian C. Rabbitt in announcing the crackdown on Sept. 30.

“In many of these cases, defendants are alleged to have preyed upon addicted patients, recruiting them from their hometowns, where they have support networks, and shipping them off to far-away states where they are placed into these so-called ‘sober homes.’ Once there, these vulnerable patients are often provided with drugs that undercut their ability to recover from the addiction they are trying to kick, and they are often shuffled from facility to facility to boost headcount and maximize billing, instead of being given the care they so desperately need.”

In some of the more troubling cases — a great many filed in Florida — some patients were also referred to other healthcare providers who, in return for kickbacks, billed for medically unnecessary tests, medications and services. “This fraud and abuse truly inflict a human — not just financial — toll on their victims,” Rabbitt said.

Many of these prosecutions are the direct result of “the pioneering use of data to strategically target wrongdoing” in healthcare and opioid prescription and distribution, he added.

In the Central District of California, which includes Los Angeles and Orange counties, six people were charged in varying schemes to defraud insurance programs of more than $48 million, the DOJ said. They include allegations that:
  • Minas Kouchumian, a doctor from Tarzana who owned and operated California Medical and Rehabilitation Group in Northridge, billed Medicare $20 million between 2013 and 2019 and was reimbursed $7 million for drainage of tailbone cysts, removal of growths, and injections of drugs to treat osteoporosis and osteoarthritis that he never actually provided, according to court paperwork. He pleaded not guilty.

  • Christian Mohases of Santa Ana, who owned and operated multiple call centers, was charged with obtaining doctors’ orders for orthotic braces and patient referrals for genetic cancer screening tests. His companies then provided those orders and referrals to medical companies in exchange for bribes, court documents allege. He pleaded guilty.

  • John Paul Thropay of Arcadia, a doctor who worked for Blue Sky Hospice from 2014 to 2016, allegedly participated in a scheme to defraud Medicare, according to his indictment. Blue Sky’s owners paid illegal kickbacks of hundreds of dollars per patient for each month the patient remained in hospice. Thropay is accused of doing cursory examinations without consulting medical records before certifying that the patients were terminally ill — often when they were not, according to court paperwork. He pleaded not guilty. “Dr. Thropay will vigorously contest the allegations and looks forward to being acquitted,” said attorney Michael J. Khouri. “He is a very accomplished radiation oncologist and there would have been no reason to overcharge Medicare.”

  • Marc Hoang was accused of making false statements to the DEA to renew the controlled substances registration of Infinite Health Solutions, Inc., a Los Angeles company, though he was not an officer or point of contact for the company. He pleaded not guilty.
In September, Kevin M. Dickau, 32, of Tustin, pleaded guilty to one count of conspiracy to commit health care fraud. He is listed as chief executive for SeKe, Inc., the marketing company for Greiss, on papers filed with the Secretary of State. Akikur Mohammad, 57, a physician from West Hills, pleaded guilty to one count of conspiracy to violate the Eliminating Kickbacks in Recovery Act.


Costa Mesa’s Katrina Foley addressed federal leaders about the sober living industry in Washington D.C. (File photo)

Costa Mesa, a city that is de-facto ground zero for Southern California’s troubled addiction treatment industry, with more licensed addiction rehabs per capita than any place except Malibu, is battling operators in state and federal courts.
Costa Mesa is in federal court with seven cases and has won motions for summary judgement in five of them, meaning that judges ruled in the city’s favor without seeing a need for a trial. It also has won sanctions worth some $200,000 against operators, though it has yet to collect any of that money. The city also has prevailed in state court and is finalizing plans to shut down three operations, said Seymour B. Everett III, partner with Everett Dorey, the law firm representing the city.

Greiss’s operations, though, have not been subject to any of those enforcement actions or lawsuits, officials said.
Mayor Katrina Foley was pleased with the federal actions and hopes they send the message that if people break the law, they’ll be prosecuted.

“The city will continue to shed light on the criminal activities of certain sober living home operators to protect its residents and prosecute operators who illegally operate in Costa Mesa,” she said.

Costa Mesa is down to about 92 sober homes from some 300 a few years ago, Foley said, suggesting the city’s strategy is working.


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And then we have "Sources" like Ms. Sforza who for years have made The Orange County Register the finest newspaper I've ever read and subscribed to:

Teri Sforza | Reporter

Teri Sforza is one of the lead reporters on the OCR/SCNG probe of fraud, abuse and death in the Southern California addiction treatment industry. Our "Rehab Riviera" coverage won first place for investigative reporting from the California Newspaper Publishers Association, first place for projects reporting from Best of the West and is a finalist for the National Institute for Health Care Management Foundation's print award, competing with the New York Times, the Washington Post and ProPublica. Sforza birthed the Watchdog column for The Orange County Register in 2008, aiming to keep a critical (but good-humored) eye on governments and nonprofits, large and small. It won first place for public service reporting from the California Newspaper Publishers Association in 2010. She also contributed to the OCR's Pulitzer Prize-winning investigation of fertility fraud at UC Irvine, covered what was then the largest municipal bankruptcy in America‘s history, and is the author of "The Strangest Song," the first book to tell the story of a genetic condition called Williams syndrome and the extraordinary musicality of many of the people who have it. She earned her M.F.A. from UCLA's School of Theater, Film and Television, and enjoys making documentaries, including the OCR's first: "The Boy Monk," a story that was also told as a series in print. Watchdogs need help: Point us to documents that can help tell stories that need to be told, and we'll do the rest. Send tips to [email protected].

· Ancient Gaseous Emanation
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Believe me, this is just the tip of the iceberg. I worked in the durable medical equipment industry for a number of years. The 'fraud' and 'abuse' of the system is rampant.

Unfortunately, the system is set up to make fudging and bending the rules necessary for a company to stay in business. For every person manufacturing and delivering product we had five people dedicated to billing and unraveling government imposed 'restrictions'. Governmental bureaucratic bungling adds to the problem of getting paid for product made and delivered. Six month to one year delays in payment were common, and then... only a fraction of billings were reimbursed.
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