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Blackanthem Military News
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Last Updated:
May 15, 2008 - 12:14:09 PM |
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Blackanthem Military News
 FALLS CHURCH, VA.- A U.S. federal court has ordered a Philippine corporation to liquidate its assets and pay over $100 million to the U.S. government in restitution, fines and forfeitures. Health Visions Corp., was sentenced for mail fraud in U.S. District Court, Western District of Wisconsin, April 24, 2008 following a lengthy investigation involving fraudulent TRICARE claims in the Philippines.
The sentencing stems from a July, 2005 indictment of Health Visions and its president, Thomas A. Lutz, on 75 counts of defrauding the TRICARE program. Charges were brought in the Western District of Wisconsin because Wisconsin Physicians Service, the fiscal intermediary which processed and paid the fraudulent claims, is located in Madison, Wis. Lutz pleaded guilty in December, 2006, to conspiracy to pay kickbacks. His sentencing has not been scheduled.
"This is an excellent example of everyone working together to protect the TRICARE program against fraud," said Army Maj. Gen. Elder Granger, deputy director, TRICARE Management Activity.
The favorable outcome resulted from an ongoing investigation by the Defense Criminal Investigative Service, the investigative arm of the Department of Defense, Office of Inspector General (DoD-IG), with assistance from the DoD-IG Audit Readiness and Operations Support Directorate, as well as assistance from the U.S. Postal Inspection Service. The prosecution was handled by Assistant U.S. Attorneys Peter M. Jarosz and Daniel J. Graber.
"The conviction furthers our goal to protect the TRICARE program," said U.S. Attorney Erik C. Peterson. "Our veterans deserve quality health care. We will continue to vigorously investigate and prosecute these cases."
Health Visions and Lutz schemed to offer kickback agreements with medical providers in the Philippines in which the provider, at the request of Lutz, paid 50 percent of the amount of the bills for medical services rendered to TRICARE patients back to Health Visions. The patients were referred by Health Visions. Bills submitted to TRICARE were also inflated and in some cases a sham insurance program was created to circumvent beneficiary deductibles and cost shares. The fraud took place during a six-year period starting in 1998.
Since the fraudulent practices came to light, TMA has worked diligently to modify claims processing requirements and has aggressively instituted additional claims processing controls, said Granger. "The controls TMA has put into place have proven effective in overall cost avoidance. From 2001 to 2007 the total cost avoidance in the Philippines has been approximately $288 million." Cost avoidance reflects dollars not paid because of claims processing edits and fraud controls that were in place
"TMA will continue to aggressively review practices and controls designed to reduce fraud," said Granger. "When criminal activities are suspected, we refer the cases to the appropriate law enforcement agencies. Beneficiaries receive an Explanation of Benefits (EOB) following payment by TRICARE for care, and they are strongly encouraged to inform TRICARE if the services listed on the EOB were not received."
TMA has adopted multi-faceted anti-fraud controls in the Philippines including: anti-fraud data mining, provider certification, fixed fee schedules and price caps, and education and outreach to providers.
In addition, TMA is conducting reviews of claims before they are paid to prevent duplicate payments, payments for non-covered services, and excessive reimbursement. Savings from these reviews of overseas claims for 2007 were approximately $2.5 million, $1.7 million for 2006, and $5 million for 2005. Savings from beneficiary prepayment review for the same time frame resulted in just over $1 million in savings. Overseas screening of claims led to claim denials of approximately $9.8 million for 2007, $7.1 million for 2006 and $24.9 million in 2005.
About TRICARE Management Activity and the Military Health System
TRICARE Management Activity, the Defense Department activity that administers the health care plan for the uniformed services, retirees and their families, serves more than 9.1 million eligible beneficiaries worldwide in the Military Health System (MHS). The mission of the MHS is to enhance Department of Defense and national security by providing health support for the full range of military operations. The MHS provides quality medical care through a network of providers, military treatment facilities, medical clinics and dental clinics worldwide. For more about the MHS go to www.health.mil.
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