Owner of Houston Home Health Agency Sentenced to 80 Yrs for Involvement in $13 Million Medicare Fraud

Owner of Home Health Agency Sentenced in Absentia to 80 Years in Prison for Involvement in $13 Million Medicare Fraud Conspiracy and for Filing Fraudulent Tax Returns

U.S. Department of Justice press release Dec. 8, 2017                                                                             

The owner of a Houston home health agency was sentenced today to 80 years in prison for his role in a $13 million Medicare fraud scheme and for filing false tax returns.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region and Special Agent in Charge D. Richard Goss of the Houston Field Office of the Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.

Ebong Tilong, 53, of Sugarland, Texas, was sentenced by U.S. District Judge Melinda Harmon of the Southern District of Texas. In November 2016, after the first week of trial, Tilong pleaded guilty to one count of conspiracy to commit healthcare fraud, three counts of healthcare fraud, one count of conspiracy to pay and receive healthcare kickbacks, three counts of payment and receipt of healthcare kickbacks, and one count of conspiracy to launder monetary instruments. In June 2017, Tilong pleaded guilty to two counts of filing fraudulent tax returns. Tilong failed to appear for his original sentencing, which was scheduled for Oct. 13, 2017.

According to the evidence presented at trial and Tilong’s admissions in connection with his guilty plea, from February 2006 through June 2015, Tilong and others conspired to defraud Medicare by submitting over $10 million in false and fraudulent claims for home health services to Medicare through Fiango Home Healthcare Inc. (Fiango), owned by Tilong and his wife, Marie Neba, 53, also of Sugarland, Texas. The trial evidence showed that using the money that Medicare paid for such fraudulent claims, Tilong paid illegal kickbacks to patient recruiters for referring Medicare beneficiaries to Fiango for home health services. Tilong also paid illegal kickbacks to Medicare beneficiaries for allowing Fiango to bill Medicare using beneficiaries’ Medicare information for home health services that were not medically necessary or not provided, the evidence showed. Tilong falsified medical records and directed others to falsify medical records to make it appear as though the Medicare beneficiaries qualified for and received home health services. Tilong also attempted to destroy evidence, blackmail a witness, and suborn perjury from witnesses, including a co-defendant while in the federal courthouse, the evidence showed.

According to the evidence presented at trial and his admissions to the tax offenses, from February 2006 to June 2015, Tilong received more than $13 million from Medicare for home health services that were not medically necessary or not provided to Medicare beneficiaries.

In connection with his guilty plea to the tax offenses, Tilong admitted that to maximize his gains from the Medicare fraud scheme, he created a shell company called Quality Therapy Services (QTS) to limit the amount of tax that he paid to the IRS on the proceeds that he and his co-conspirators stole from Medicare. According to his plea agreement, in 2013 and 2014, Tilong wrote almost a million dollars in checks from Fiango to QTS, purportedly for physical-therapy services that QTS provided to Fiango’s Medicare patients. The evidence showed that QTS did not provide those services. According to his plea agreement, in 2013 and 2014, Tilong’s fraudulent tax scheme caused the IRS a tax loss of approximately $344,452.

To date, four others have pleaded guilty or been convicted based on their roles in the fraudulent Medicare scheme at Fiango. Nirmal Mazumdar, M.D., of Houston, Texas, the former medical director of Fiango, pleaded guilty to a scheme to commit health care fraud for his role at Fiango. Daisy Carter, 58, of Wharton, Texas, and Connie Ray Island, 49, of Houston, Texas, two patient recruiters for Fiango, pleaded guilty to conspiracy to commit health care fraud for their roles at Fiango. Neba was convicted after a two-week jury trial of one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiracy to pay and receive health care kickbacks, one count of payment and receipt of health care kickbacks, one count of conspiracy to launder monetary instruments and one count of making health care false statements.

On Aug. 11, Neba was sentenced to 75 years in prison and Island was sentenced to 33 months in prison. On Oct. 3, Mazumdar was sentenced to time served with three years of home confinement. Carter is awaiting sentencing.

The case was investigated by the FBI, IRS-CI and HHS-OIG under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Trial Attorney William S.W. Chang, Senior Trial Attorney Jonathan T. Baum, and Trial Attorney Andrew Pennebaker of the Fraud Section.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.

Michigan Doctor Johnny Trotter Sentenced to 15 Years in Prison for $26 Million Health Care Fraud Scheme

Department of Justice

Office of Public Affairs

Nov. 7, 2017 - A Detroit-area doctor was sentenced to 180 months in prison today for his role in a $26 million health care fraud scheme that involved billing Medicare for nerve block injections that were never provided and efforts to circumvent Medicare’s investigation of the fraudulent scheme. A co-conspirator who owned a medical billing company was previously sentenced to 10 years in prison.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office and Special Agent in Charge Manny Muriel of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.

Johnny Trotter M.D., 42, of Bloomfield Hills, Michigan, was sentenced today by U.S. District Judge George C. Steeh of the Eastern District of Michigan. The owner of the medical billing company, Elaine Lovett, 61, of Detroit, was sentenced by Judge Steeh on Sept. 26. Judge Steeh also ordered each defendant to pay $9,199,946 in restitution and scheduled a hearing tomorrow on forfeiture. Trotter and Lovett were convicted in April 2017 after a four-week jury trial of one count of conspiracy to commit health care fraud and wire fraud, and three counts of health care fraud. Trotter was remanded to custody pending a detention hearing tomorrow.

According to the evidence presented at trial, from May 2008 until May 2014, Trotter and Lovett knowingly submitted fraudulent bills for services that they knew had not been provided, mainly nerve block injections. Additionally, after Medicare imposed a requirement in 2009 that required Trotter’s claims to undergo a medical review prior to payment, Trotter and Lovett conspired to circumvent Medicare’s fraud investigation of Trotter by creating sham medical practices, the evidence showed. To continue to receive payment for services that were not provided, Trotter and Lovett concealed their involvement with these practices from Medicare, and instead recruited their family members and employees to serve as straw owners of the companies, the evidence further showed.

The FBI, HHS-OIG and IRS-CI investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. Fraud Section Assistant Chiefs Malisa Dubal and Allan Medina, as well as Trial Attorneys Tom Tynan and Jacob Foster, prosecuted the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

https://www.justice.gov/opa/pr/michigan-doctor-and-owner-medical-billing-company-sentenced-15-years-prison-26-million-health

Autistic Self Advocacy Network Condemns New Attacks On The Affordable Care Act

 

Press Release - Oct 16, 2017 - The Autistic Self Advocacy Network (ASAN) condemns the multiple new attacks on the Affordable Care Act (ACA) from the Trump administration in the past 24 hours. These attacks undermine our health care system, will raise costs for everyone, and threaten the lives of people with disabilities. ASAN calls on Congress to step up to the plate and exercise real leadership by passing a bipartisan bill that will restore funding for Cost Sharing Reductions, protect and fully fund Open Enrollment, and shield the American people from future attacks on our health care. 

The recent actions from the White House hurt our country in multiple ways. The executive order signed yesterday threatens critical protections for people with disabilities by making it easier for insurance companies to discriminate against people with pre-existing conditions. It also allows insurers to sell junk coverage that doesn’t cover critical services and won’t protect consumers from soaring health care costs. In addition, last night’s decision to withhold funding for Cost Sharing Reductions will raise costs for everyone, but particularly for working- and middle-class Americans who rely on this basic assistance to afford health insurance. These actions will directly harm millions of people and are without justification.

The American people have clearly and repeatedly rejected these kinds of proposal over the past nine months. As ASAN has stated in the past, any future attempts at health care reform must meet the needs of all Americans, leave the Medicaid program intact, and proactively include the disability community from the beginning of the process. ASAN calls on the Trump administration to listen to the voices of everyday Americans, stop the attacks on our health care, and support a bipartisan process in Congress. Our government must work to develop thoughtful and carefully considered proposals that make healthcare better for everyone and increase access to quality, affordable coverage rather than endangering the lives of people with disabilities.

The Autistic Self Advocacy Network is a 501(c)(3) nonprofit organization run by and for autistic people. ASAN was created to serve as a national grassroots disability rights organization for the autistic community run by and for autistic Americans, advocating for systems change and ensuring that the voices of autistic people are heard in policy debates and the halls of power. Our staff work to educate communities, support self-advocacy in all its forms, and improve public perceptions of autism. ASAN’s members and supporters include autistic adults and youth, cross-disability advocates, and non-autistic family members, professionals, educators, and friends.

source: press release 

Health Insurance 2018 Open Enrollment (OE) begins on November 1, 2017 End Date Vary by State

The American Association of People with Disabilities (AAPD) has shared the following detailed information on Open Enrollment for Government Health Care Programs for 2018. There are important dates and changes noted below. This post will be updated as needed.

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Healthcare Open Enrollment #5Changes and Challenges

From November 1, 2017 through December 15, 2017 (in most states), individuals will be able to purchase health insurance through the marketplace established by the Affordable Care Act (ACA).

IMPORTANT: 2018 ACA Open Enrollment starts November 1, 2017 in all 50 states and DC It ends on December 15, 2017 in all states except: California (1/31/2018) Colorado (1/12/2018) Connecticut (12/22/2017) District of Columbia (1/31/2018) Massachusetts (1/23/2018) Minnesota (1/14/2018) New York (1/31/2018) Rhode Island (12/31/2017) Washington (1/15/2018)   *Special enrollment period (12/16/2017 – 12/31/2017) available for hurricane victims*

There are a number of changes that have occurred to the 2018 OE period, which will run from November 1st to December 15th in most states. Shorter Enrollment Period. The first major change is a shorter enrollment period. The 2018 enrollment period was originally scheduled to run November 1, 2017 through January 31, 2018. However, the Department of Health and Human Services cut the period in half so that it only runs until December 15, 2017. This means it is crucial to get information out to individuals about OE5 before and during the open enrollment period since individuals will have less time to sign up for ACA healthcare. Cuts to the outreach, education, and enrollment budget. The second change refers to a series of deep budget cuts that happened in late August. These cuts include a 90% reduction for marketplace advertising, a 42% cut for HealthCare.gov (the website that allows individuals to sign up for health insurance), and a $25.7 million cut to Navigators (trained individuals that help guide people through the ACA sign-up process). Website Outages. It was recently announced that the federal health insurance exchange – HealthCare.gov – will be shut down for maintenance once a week, every week for 12 hours, during the open enrollment period. With the already shorten open enrollment period, these outages will make it even more difficult for people to sign up for health insurance through the marketplace. These changes will suppress marketplace enrollment and will likely limit the number of people who gain health insurance. Having less people sign up for coverage could lead to less-balanced risk pools and higher costs.

What does this mean for people with disabilities? The ACA has helped, and continues to help, people with disabilities in a number of ways. Providing protections for people with pre-existing conditions opened the door for many people with disabilities to receive affordable, comprehensive health insurance. The ACA also eliminated lifetime benefit limits, meaning there were no caps to the amount of money one could receive in a lifetime from an insurer. Medicaid expansion in 32 states, including Washington, DC, provided individuals with incomes at or below 138% of the poverty line affordable healthcare. These provisions resulted in 20 million people gaining health insurance by January of this year. Government health insurance is extremely important to people with disabilities – in 2015 58.3% of adults with disabilities had government health insurance compared to 17.4% of adults without disabilities. Shortening the Open Enrollment period and cutting funding means less uninsured individuals will have the opportunity to enroll in health insurance, and fewer individuals will be able to take advantage of the opportunities ACA has created for people with disabilities.

What can we do now? Help spread the word about Open Enrollment Period #5! While a significant amount of funding has been cut and the enrollment period shortened, we can make a difference by spreading information through our own networks. Post to Facebook or send a Tweet about the Open Enrollment period. Ask your friends and family if they have health insurance. Every effort helps!

Open Enrollment Resources HealthCare.gov – Open Enrollment website Get America Covered – provides enrollment information specific to your state Get Covered America – locate someone in your area who can help you complete your health insurance application Families USA Enrollment Assister Resource Center – materials to help navigators and assisters be successful during open enrollment and beyond Out2Enroll – Enrollment resources and support for the LGBTQ community ACA Signup Project – Graphics and materials to help promote Open Enrollment #5

Beginning in April 2018, New Medicare cards Offer Greater Protection For Million of Americans

New cards will no longer contain Social Security numbers, to combat fraud and illegal use

The Centers for Medicare & Medicaid Services (CMS) is readying a fraud prevention initiative that removes Social Security numbers from Medicare cards to help combat identity theft, and safeguard taxpayer dollars. The new cards will use a unique, randomly-assigned number called a Medicare Beneficiary Identifier (MBI), to replace the Social Security-based Health Insurance Claim Number (HICN) currently used on the Medicare card. CMS will begin mailing new cards in April 2018 and will meet the congressional deadline for replacing all Medicare cards by April 2019. Today, CMS kicks-off a multi-faceted outreach campaign to help providers get ready for the new MBI.

“We’re taking this step to protect our seniors from fraudulent use of Social Security numbers which can lead to identity theft and illegal use of Medicare benefits,” said CMS Administrator Seema Verma. “We want to be sure that Medicare beneficiaries and healthcare providers know about these changes well in advance and have the information they need to make a seamless transition.”

Providers and beneficiaries will both be able to use secure look up tools that will support quick access to MBIs when they need them. There will also be a 21-month transition period where providers will be able to use either the MBI or the HICN further easing the transition

CMS testified on Tuesday, May 23rd before the U.S. House Committee on Ways & Means Subcommittee on Social Security and U.S. House Committee on Oversight & Government Reform Subcommittee on Information Technology, addressing CMS’s comprehensive plan for the removal of Social Security numbers and transition to MBIs.

Personal identity theft affects a large and growing number of seniors. People age 65 or older are increasingly the victims of this type of crime. Incidents among seniors increased to 2.6 million from 2.1 million between 2012 and 2014, according to the most current statistics from the Department of Justice. Identity theft can take not only an emotional toll on those who experience it, but also a financial one: two-thirds of all identity theft victims reported a direct financial loss. It can also disrupt lives, damage credit ratings and result in inaccuracies in medical records and costly false claims.

Work on this important initiative began many years ago, and was accelerated following passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). CMS will assign all Medicare beneficiaries a new, unique MBI number which will contain a combination of numbers and uppercase letters. Beneficiaries will be instructed to safely and securely destroy their current Medicare cards and keep the new MBI confidential. Issuance of the new MBI will not change the benefits a Medicare beneficiary receives.

CMS is committed to a successful transition to the MBI for people with Medicare and for the health care provider community. CMS has a website dedicated to the Social Security Removal Initiative (SSNRI) where providers can find the latest information and sign-up for newsletters. CMS is also planning regular calls as a way to share updates and answer provider questions before and after new cards are mailed beginning in April 2018.

For FAQ, visit: https://www.cms.gov/Medicare/New-Medicare-Card/index.html
For more information, please visit: https://www.cms.gov/medicare/ssnri/index.html
source: press release 05/30/2017      

Dr. Roberto A. Fernandez of Miami Sentenced for Role in Pain Pill Diversion and $4.8 Million Medicare Fraud Scheme

Sept. 20, 2017 - A Miami physician was sentenced today to 97 months in prison and three years of supervised release, for his role in a $4.8 million health care fraud scheme that involved the submission of false and fraudulent claims to Medicare and the illegal prescribing of controlled substances, including oxycodone and hydrocodone.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Special Agent in Charge Brian Swain of the U.S. Secret Service’s (USSS) Miami Field Office made the announcement.

Roberto A. Fernandez, M.D., 51, of Miami, was sentenced by U.S. District Judge Cecelia M. Altonaga of the Southern District of Florida.  Judge Altonaga also ordered Fernandez to pay $4.8 million in restitution, jointly and severally with his co-conspirators.  Fernandez pleaded guilty on July 11,  to one count of conspiracy to commit health care fraud and wire fraud in connection with a scheme, that ran from April 2011 to February 2017, involving the submission of false and fraudulent claims to Medicare and the illegal prescribing of controlled substances, including oxycodone, hydrocodone and alprazolam.

As part of his guilty plea, Fernandez admitted that he referred Medicare beneficiaries to pharmacy owners in exchange for illegal health care kickbacks.  Fernandez admitted knowing that the pharmacy owners were billing and receiving reimbursements from Medicare for prescription drugs based upon the prescriptions he sold, and that many of his prescriptions were medically unnecessary.  For example, he admitted providing prescriptions for expensive, name brand drugs, including HIV/AIDS medications that conflicted with other HIV drugs already prescribed to the beneficiaries.

Fernandez also solicited referrals of Medicare beneficiaries to his own practices from his co-conspirators, he admitted, including submitting claims to Medicare under his Part B provider number for services he did not, in fact, render.  Additionally, Fernandez admitted to receiving kickbacks in return for signing plans of care and prescriptions for medically unnecessary home health services.

Fernandez further admitted that he prescribed controlled substances, including addictive opioids, to patients and patient recruiters in return for $100 to $200 cash per prescription.  Fernandez admitted that he knew these patients did not need the controlled substances he prescribed, and that he would sometimes write prescriptions for controlled substances for patients whom he did not even examine. 

The FBI, HHS-OIG and USSS investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  Assistant U.S. Attorney Lisa H. Miller of the Southern District of Florida and a former Fraud Section trial attorney, and Fraud Section Trial Attorney Adam G. Yoffie are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

source: press release Department of Justice

New Orleans Woman Kim Ricard Convicted for Role in $2.1 Million Medicare Kickback Scheme

Sept 14, 2017 - A federal jury found a New Orleans woman guilty of conspiracy, identity theft and false statements charges for her role in an approximately $2.1 million Medicare kickback scheme.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Duane A. Evans of the Eastern District of Louisiana, Special Agent in Charge C.J. Porter of the Office of Inspector General – Health and Human Services Dallas Field Office and Special Agent in Charge Jeff Sallet of the FBI’s New Orleans Field Office made the announcement.

After a two-day trial, Kim Ricard, age 51, of New Orleans, was convicted of one count of conspiracy to pay and receive kickbacks in connection with Medicare beneficiaries. In addition, Ricard was convicted of three counts of accepting kickbacks, along with three counts of identity theft and one count of making false statements to federal agents. Sentencing has been scheduled for December 7, before U.S. District Judge Jane Milazzo of the Eastern District of Louisiana, who presided over the trial.

According to evidence presented at trial, from 2008 to 2013, Ricard and others engaged in a scheme to refer mentally ill Medicare patients to home health agencies in and around New Orleans, in exchange for kickbacks. The evidence further established that Ricard unlawfully used the Medicare identification information of three Medicare beneficiaries in connection with the scheme. Ricard then lied to investigators, the evidence showed.

As a result of the scheme, Ricard’s co-conspirator caused Medicare to pay over $2.1 million based on those illegally-obtained referrals

One other defendant was charged in this matter. Milton Diaz, 65, of Harvey, Louisiana, pleaded guilty and is awaiting sentencing.

This case was investigated by the Office of Inspector General of the Department of Health and Human Services, and the FBI. Trial Attorneys Claire Yan and Kate Payerle of the Criminal Division’s Fraud Section are prosecuting the case.

The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov

.source: press release Department of Justice

SSA Law Judge David Black Daugherty Sentenced for Role in $550 Million Social Security Fraud Scheme

Former Social Security Administrative Law Judge Sentenced to Four Years in Prison for Role in $550 Million Social Security Fraud Scheme

Department of Justice - A former social security administrative law judge (ALJ) was sentenced today to four years in prison for his role in a scheme to fraudulently obtain more than $550 million in federal disability payments from the Social Security Administration (SSA) for thousands of claimants.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division, Special Agent in Charge Amy S. Hess of the FBI’s Louisville Field Division, Special Agent in Charge Tracey D. Montaño of the IRS Criminal Investigation (IRS-CI) Nashville Field Office and Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.

David Black Daugherty, 81, of Myrtle Beach, S.C., was sentenced by U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky, who also ordered Daugherty to pay restitution of over $93 million to the SSA and HHS. Daugherty pleaded guilty in May 2017 to two counts of receiving illegal gratuities.

According to admissions made as part of his guilty plea, beginning in 2004, Daugherty, as an ALJ assigned to the SSA’s Huntington, W. Va., hearing office, sought out pending disability cases in which Kentucky attorney Eric Christopher Conn represented claimants and reassigned those cases to himself. Daugherty then contacted Conn and identified the cases he intended to decide the following month and further solicited Conn to provide medical documentation supporting either physical or mental disability determinations. Without exception, Daugherty awarded disability benefits to individuals represented by Conn – in some instances, without first holding a hearing. As a result of Daugherty’s awarding disability benefits to claimants represented by Conn, Conn paid Daugherty an average of approximately $8,000 per month in cash, until approximately April 2011. All told, Daugherty received more than $609,000 in cash from Conn for deciding approximately 3,149 cases.

As a result of the scheme, Conn, Daugherty, and their co-conspirators obligated the SSA to pay more than $550 million in lifetime benefits to claimants based upon cases Daugherty approved for which he received payment from Conn.

Daugherty was indicted last year, along with Conn and Alfred Bradley Adkins, a clinical psychologist. The defendants were charged with conspiracy, fraud, false statements, money laundering and other related offenses in connection with the scheme.

Conn pleaded guilty on March 24, to a two-count information charging him with theft of government money and paying illegal gratuities, and was sentenced in absentia on July 14 to 12 years in prison. Conn absconded from court ordered-electronic monitoring on June 2, and is considered a fugitive. He remains under indictment. On June 12, Adkins was convicted after a jury trial of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud and one count of making false statements. Adkins is scheduled to be sentenced on September 22.

The SSA-OIG, FBI, IRS-CI and HHS-OIG investigated the case. Trial Attorney Dustin M. Davis of the Criminal Division’s Fraud Section and Trial Attorney Elizabeth G. Wright of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case, with previous co-counsel including Assistant U.S. Attorney Trey Alford of the Western District of Missouri and Investigative Counsel Kristen M. Warden of the Justice Department’s Office of the Inspector General

Source: press release Aug.25, 2017.

https://www.justice.gov/opa/pr/former-social-security-administrative-law-judge-sentenced-four-years-prison-role-550-million

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• Kentucky Lawyer Pleads Guilty in Massive Social Security Disability Scheme, 100's Face Loss of Monthly Checks
• Former Administrative Law Judge Pleads Guilty for Role in $550 Million Social Security Disability Fraud Scheme
• Fugitive Eric Conn A Kentucky Lawyer Sentenced in $550 Million Social Security Fraud Scheme

Home Health Agency Owner Godwin Oriakhi Convicted for Defrauding Medicare & Medicaid of $17 Million

Houston Home Health Agency Owner Sentenced to 480 Months in Prison for Conspiring to Defraud Medicare and Medicaid of More Than $17 Million

WASHINTON – The owner and operator of five Houston-area home health agencies was sentenced on Thursday to 480 months in prison for conspiring to defraud Medicare and the State of Texas’ Medicaid-funded Home and Community-Based Service (HCBS) and Primary Home Care (PHC) Programs of more than $17 million and launder the money that he stole from Medicare and Medicaid. The HCBS and PHC Programs provided qualified individuals with in-home attendant and community-based services that are known commonly as “provider attendant services” (PAS). This case marks the largest PAS fraud case charged in Texas history.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Dallas Regional Office, Special Agent in Charge D. Richard Goss of IRS Criminal Investigation’s (CI) Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.

Godwin Oriakhi, 61, of Houston, was sentenced by U.S. District Judge Sim Lake of the Southern District of Texas. In March 2017, Oriakhi pleaded guilty to two counts of conspiracy to commit health care fraud and one count of conspiracy to launder monetary instruments.

According to admissions made as part of Oriakhi’s plea, he, his co-defendant daughter and other members of his family owned and operated Aabraham Blessings LLC, Baptist Home Care Providers Inc., Community Wide Home Health Inc., Four Seasons Home Healthcare Inc. and Kis Med Concepts Inc., all of which were home health agencies in the Houston area. Oriakhi admitted that he, along with his daughter and other co-conspirators, obtained patients for his home health agencies by paying illegal kickback payments to patient recruiters and his office employees for hundreds of patient referrals. In his plea, Oriakhi also admitted that he, along with his daughter and co-conspirators, paid Medicare and Medicaid patients by cash, check, Western Union and Moneygram for receiving services from his family’s home health agencies in exchange for the ability to use the patients’ Medicare and Medicaid numbers to bill the programs for home healthcare and PAS services. Oriakhi admitted that he, his daughter and their co-conspirators also directly paid some of these patients for recruiting and referring other Medicare and Medicaid patients to his agencies. Additionally, Oriakhi admitted that he, his daughter and other co-conspirators paid physicians illegal kickbacks payments, which Oriakhi and his co-conspirators called “copayments,” for referring and certifying Medicare and Medicaid patients for home health and PAS services.

Oriakhi further admitted that each time he submitted a claim predicated on an illegal kickback payment he knew he was submitting a fraudulent claim to Medicare or Medicaid based on his false representations that the claim and the underlying transaction complied with the federal Anti-Kickback Statute and other state and federal laws. Oriakhi further admitted that he knew that Medicare and Medicaid would not otherwise pay for the fraudulent claims, according to his plea. In addition to the home health care and PAS services fraud scheme, Oriakhi admitted that he and his co-conspirators used the money fraudulently obtained from Medicare and Medicaid to make illegal kickback payments to patient recruiters, employees, physicians and patients to promote the Medicare home health and Medicaid PAS fraud conspiracies, and ensure their successful continuation.

In total, Oriakhi that he and his co-conspirators submitted approximately $17,819,456 in fraudulent home healthcare and PAS claims to Medicare and Medicaid and received approximately $16,198,600 on those claims.

To date, three others have pleaded guilty based on their roles in the fraudulent scheme at Oriakhi’s home healthcare agencies. Oriakhi’s daughter, Idia Oriakhi, and Charles Esechie, a registered nurse who was Baptist’s primary admissions nurse, each pleaded guilty to one count of conspiring with Oriakhi and others to commit health care fraud. Jermaine Doleman, a patient recruiter, pleaded guilty to conspiring with Oriakhi and others to commit health care fraud and launder money. Doleman was also charged in two other healthcare fraud cases. Esechie was also sentenced on August 17, to 60 months in prison. Idia Oriakhi and Jermaine Doleman are awaiting sentencing.

The case was investigated by the IRS-CI, FBI, HHS-OIG and MFCU under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Senior Trial Attorney Jonathan T. Baum and Trial Attorneys Aleza S. Remis and William S.W. Chang of the Fraud Section of the Justice Department’s Criminal Division.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.

Source: press release Aug. 18, 2017https://www.justice.gov/opa/pr/houston-home-health-agency-owner-sentenced-480-months-prison-conspiring-defraud-medicare-and

Houston Physician Ronald F. Kahn Convicted of Conspiracy in $1.5 Million Medicare Fraud Scheme

July 19, 2017 - A federal jury convicted a Houston physician today for his role in a scheme involving approximately $1.5 million in fraudulent Medicare claims for home health care services and various medical testing and services.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Dallas Region and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.

After a four-day trial, Ronald F. Kahn, M.D., 62, of Harris County, Texas, was convicted of one count of conspiracy to commit health care fraud and one count of conspiracy to pay and receive illegal kickbacks. Sentencing has been scheduled for September 25, before U.S. District Judge Kenneth M. Hoyt, who presided over the trial.

According to evidence presented at trial, from approximately 2006 until 2013, Kahn and others engaged in a scheme to defraud Medicare out of approximately $1.5 million in fraudulent claims for home heath care services in connection with Allied Covenant Home Health, Inc., a Houston home healthcare agency (Allied). Kahn fraudulently admitted patients for home health care with Allied when they did not qualify for such services, the evidence showed. To make it appear that these patients did qualify, Kahn falsified medical records and signed false documents purporting to show that patients admitted to Allied’s home health program satisfied Medicare’s requirements for admission, the evidence showed.

The evidence also showed that Kahn paid illegal kickbacks for patients from Harris Health Care Group, a Houston medical clinic (Harris). Kahn paid illegal kickbacks to the owner of Harris in order to bill Medicare for facet injections that were medically unnecessary, not provided or both, the evidence showed.

The case was investigated by the FBI, HHS-OIG and Texas MFCU, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Assistant Chief Ashlee McFarlane and Trial Attorney Scott Armstrong of the Fraud Section.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

source: Dept. of Justice press release

Fugitive Eric Conn A Kentucky Lawyer Sentenced in $550 Million Social Security Fraud Scheme

A Kentucky lawyer who is on the run from law enforcement was sentenced in absentia on Friday to 12 years in prison for participating in a more than $550 million disability fraud scheme, the U.S. Department of Justice said.

article By Timothy Mclaughlin for Reuters | July 14, 2017                                                        

Eric Christopher Conn, 56, pleaded guilty on March 24 to charges stemming from what prosecutors said was his role in a scheme to fraudulently obtain more than $550 million in federal disability payments for thousands of people.

Conn is a fugitive who has been on the run since last month and was not at his sentencing by U.S. District Judge Danny Reeves of the Eastern District of Kentucky in Lexington, the Justice Department said in a statement.

Scott White, an attorney for Conn, did not immediately respond to a request for comment.

White told a Kentucky television station last month that Conn should surrender.

Conn must also pay around $106 million in restitution to the Social Security Administration and U.S. Department of Health and Human Services, the Justice Department said in Friday's statement.

Prosecutors said that from 2004 to 2016, Conn, of Pikeville, Kentucky, participated in a scheme that involved submitting thousands of falsified medical documents to the U.S. Social Security Administration.

Two other co-consiprators, a retired administrative law judge from the U.S. Social Security Administration and a clinical psychologist, are awaiting sentencing for their roles in the scheme.

Conn fled home detention last month using a truck registered by one of his co-conspirators. The truck was discovered in New Mexico near the border with Mexico, the Federal Bureau of Investigation said in a statement on Friday.

The statement did not say when the truck was discovered or which co-conspirator gave him the truck. A spokesman for the FBI was not immediately available for comment.

Along the way, Conn made several stops including at a gas station and a Wal-Mart store in New Mexico where he was captured on video surveillance. There is no indication Conn crossed the border into Mexico, the FBI said.

There is a $20,000 reward from the FBI for information leading to Conn's location and arrest.

The FBI's account of Conn's escape contradicts a report last month by the Lexington Herald-Leader, which said Conn fled the United States using a fake passport after the newspaper exchanged emails with an individual it identified as Conn.

The FBI statement "shows that the account of the escape by the person claiming to be Conn was false," the newspaper reported on Friday.
(Reporting by Timothy Mclaughlin in Chicago; Editing by Matthew Lewis)

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RELATED POSTS

• 100s Face Loss of Social Security Disability Checks Due To Fraud Probe
• Kentucky Lawyer Pleads Guilty in Massive Social Security Disability Scheme, 100's Face Loss of Monthly Checks
• Former Administrative Law Judge Pleads Guilty for Role in $550 Million Social Security Disability Fraud Scheme

Roberto A. Fernandez, M.D. of Miami, Pleads Guilty for Role in Pain Pill Diversion and $4.8 Million Medicare Fraud Scheme

Department of Justice

Office of Public Affairs

July 12, 2017 - A licensed physician in Miami pleaded guilty in federal court yesterday for his role in a multi-faceted $4.8 million health care fraud scheme that ran from April 2011 to February 2017, involving the submission of false and fraudulent claims to Medicare and the illegal prescribing of Schedule II (e.g., oxycodone and hydrocodone) and Schedule IV (e.g., alprazolam) controlled substances.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office, and Special Agent in Charge Brian Swain of the U.S. Secret Service’s (USSS) Miami Field Office made the announcement.

Roberto A. Fernandez, M.D., 51, of Miami, pleaded guilty before U.S. District Judge Cecelia M. Altonaga of the Southern District of Florida to one count of conspiracy to commit health care fraud and wire fraud. Sentencing is set for September 20.

According to admissions made as part of his guilty plea, Fernandez referred Medicare beneficiaries to pharmacy owners in exchange for illegal health care kickbacks. Fernandez admitted knowing that the pharmacy owners were billing and receiving reimbursements from Medicare for prescription drugs based upon the prescriptions he sold, and that his patients did not truly need many of the medications he prescribed in exchange for the kickbacks. For example, he admitted providing prescriptions for expensive, name brand drugs, including anti-psychotics and HIV/AIDS medications that were not medically necessary.

Fernandez also solicited referrals of Medicare beneficiaries to his own practices from his co-conspirators, he admitted, including submitting claims to Medicare under his Part B provider number for services he did not, in fact, render to Medicare beneficiaries. Additionally, Fernandez admitted receiving kickbacks in return for signing plans of care and prescriptions for home health services.

Fernandez also admitted that he prescribed controlled substances, including dangerous opioids, to patients and patient recruiters in return for $100 - $200 cash per prescription. Fernandez admitted that he knew these patients did not need the controlled substances he prescribed. Furthermore, Fernandez admitted that he wrote many of these controlled substance prescriptions for patients that he did not even examine.

The FBI, HHS-OIG, and USSS investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. Former Fraud Section Trial Attorney and current Assistant U.S. Attorney Lisa H. Miller of the Southern District of Florida and Fraud Section Trial Attorney Adam G. Yoffie are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

source: Dept of Justice press release

Social Security Projects 2018 COLA of 2.2Percent

More than 61 million retirees, disabled workers, spouses and surviving children receive Social Security benefits. The average monthly payment is $1,253

By Stephen Ohlemacher, Associated Press |  July 13, 2017
AP - Millions of Americans who rely on Social Security can expect to receive their biggest payment increase in years this January, according to projections released Thursday by the trustees who oversee the program.

But the elderly shouldn't get too excited.

The increase is projected to be just 2.2 percent, or about $28 a month for the average recipient. Social Security recipients have gone years with tiny increases in benefits. This year they received an increase of 0.3 percent, after getting nothing last year.

More than 61 million retirees, disabled workers, spouses and surviving children receive Social Security benefits. The average monthly payment is $1,253.

The trustees released the projection, along with their annual warning about the long-term financial problems of Social Security and Medicare, the federal government's two bedrock retirement programs. Medicare provides health insurance to about 58 million people, most of whom are at least 65 years old.

Unless Congress acts, the trust funds that support Social Security are estimated to run dry in 2034, the same year as last year's projection. Medicare's trust fund for inpatient care is projected to be depleted in 2029, a year later than last year's forecast.

If Congress allows either fund to be depleted, millions of Americans living on fixed incomes would face steep cuts in benefits.

Neither Social Security nor Medicare faces an immediate crisis. But the trustees warn that the longer Congress waits to address the program's problems, the harder it will be to sustain Social Security and Medicare without significant cuts in benefits, big tax increases or both.

"Lawmakers should address these financial challenges as soon as possible," the trustees wrote in their report. "Taking action sooner rather than later will permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare."

Republicans in Washington have long clamored to address the long-term financial problems of Social Security and Medicare, the largest benefit programs run by the federal government. But don't expect them to do much about it.

Over the years, House Speaker Paul Ryan, R-Wis., has insisted on overhauling those programs, proposing a voucher-like system for Medicare and calling for partially privatizing Social Security.

Now that Republicans control Congress and the White House, Ryan says he doesn't want to tackle Social Security. Instead, Republicans and the White House are focused on repealing and replacing former President Barack Obama's health care law.

President Donald Trump has promised not to cut Social Security or Medicare, though his budget proposal for next year would reduce Social Security's disability benefits by nearly $70 billion over the next decade. The savings would come from encouraging, and in some cases requiring, people receiving the benefits to re-enter the workforce.

But even if Trump finds the savings, it wouldn't come close to solving the program's long-term financial problems.

Social Security is independently funded by payroll taxes, so it is not subject to annual spending bills approved by Congress. AARP hopes it stays that way.

"Social Security should remain separate from the budget. Medicare can improve if we reduce the overall cost of health care, rather than impose an age tax, and if we lower prescription costs, instead of giving tax breaks to drug and insurance companies," said AARP CEO Jo Ann Jenkins.

Over the past decade, Social Security and Medicare made up about 40 percent of federal spending, excluding interest on the debt — and that share is projected to grow in the future, according to the nonpartisan Congressional Budget Office.

Fifty years ago, the two programs accounted for 16 percent of federal spending.

The programs are expanding in part because the U.S. is growing older.

In 1960, there were 5.1 workers for each person getting Social Security benefits. Today, there are about 2.8 workers for each beneficiary. That ratio will drop to 2.1 workers by 2040, according to the CBO.

The trustees who oversee Social Security and Medicare are Treasury Secretary Steven Mnuchin, Health and Human Services Secretary Tom Price, Labor Secretary Alexander Acosta and acting Social Security Commissioner Nancy Berryhill.

Copyright Associated Press

July 2017 Largest National Health Care Fraud Takedown in History

The U.S. Department of Health and Human Services Office of Inspector General, along with our state and federal law enforcement partners, participated in the largest health care fraud takedown in history in July 2017. More than 400 defendants in 41 federal districts were charged with participating in fraud schemes involving about $1.3 billion in false billings to Medicare and Medicaid. OIG also issued exclusion notices to 295 doctors, nurses, and other providers based on conduct related to opioid diversion and abuse. Takedowns protect Medicare and Medicaid and deter fraud -- sending a strong signal that theft from these taxpayer-funded programs will not be tolerated. The money taxpayers spend fighting fraud is an excellent investment: For every $1.00 spent on health care-related fraud and abuse investigations in the last three years, more than $5.00 has been recovered.

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source: press release

American's Health Insurance Premiums Could Increase Under U.S. Senate Healthcare Bill aka TrumpCare

The U.S. Senate Better Care Reconciliation Act (BCRA) would make significant changes to the amounts that people pay for nongroup coverage and for the care they receive under the Affordable Care Act (ACA). The tables below provide estimates of how premiums after taking into account tax credits would change for people currently enrolled in the federal and state marketplaces.

Kaiser Family Foundation  REPORT | by  Gary Claxton, Anthony Damico, Larry Levitt , and Cynthia Cox | June 26, 2017                                                                                                                                  
Under current law, people with incomes between 100 percent and 400 percent of the federal poverty level are eligible for premium tax credits to help them pay the premium for nongroup coverage purchased through the federal or a state marketplace if they do not have access to other affordable coverage. People are responsible for paying a specified percent of their income (“required income percentage”) toward the cost of the benchmark plan (the second-lowest cost silver plan in their area), and the federal government pays the remainder of the premium to their insurer; this amount is the person’s premium tax credit. The required income percentages people are responsible to pay vary with income: In 2017, people with incomes between 100 percent and 133 percent of poverty contribute 2.04 percent of income, while people with incomes between 300 percent and 400 percent of poverty contribute 9.69 percent of their income.1 Because premiums vary with age but the share of income people are responsible to pay does not, older people receive larger premium tax credits than younger people with the same income but pay the same amount for the benchmark plan.

Beginning in 2020, the BCRA would make several significant revisions that affect the premium tax credits that people receive when they purchase nongroup coverage. First, the bill would revise income eligibility for premium tax credits, extending eligibility to people with incomes below poverty but capping eligibility at 350 percent of poverty. Second, the bill amends the way that premium tax credits are calculated so that the required income percentages vary with age and with income. Our estimates of the required income percentages under current law and the BCRA for 2020 are shown in the Appendix. The result is that on average people at younger ages would pay a lower share of their income to purchase a benchmark plan than they today while people at older ages would pay a higher share. Third, the bill reduces the value of the benchmark plans that are used to determine premium tax credits. The result is that a person who used their premium tax credit to purchase a benchmark plan would get a plan that on average would pay 58 percent of expected covered costs (a bronze plan), compared to 70 percent (a silver plan) under current law. A plan paying 58 percent of expected covered costs would have much higher cost sharing (e.g., deductibles) than a plan covering 70 percent of costs. This change is particularly important because the BCRA also would eliminate the cost sharing subsidies available under current law that reduce cost sharing and out-of-pocket limits for marketplace enrollees with incomes at or below 250 of poverty.

The bill also authorizes states to change the amount that premiums for adults can vary due to age, from 3:1 under current law to 5:1 (or a different ratio at state discretion). This would lower premiums for younger adults and raise them for older adults in states that made the change.2

Results
We estimated the average premiums that current marketplace enrollees would pay, after receiving any premium tax credit, for a benchmark silver plan in 2020 under current law and under the BCRA. Most current marketplace enrollees purchase silver plans, so we used those as the basis for a comparison of how much people would pay for equivalent coverage under the ACA versus the BCRA. The methods we used in making our estimates are described in more detail below.

Overall, marketplace enrollees would pay on average 74 percent more towards the premium for a benchmark silver plan in 2020 under the BCRA than under current law (Table 1). Younger enrollees would see modest increases on average (10 percent for those under age 18; 17 percent for those ages 18 to 34), while average premiums would more than double for enrollees ages 55 to 64. State-level results are in Appendix Table 2.

Table 1: Monthly Premium for a Silver Plan Among Exchange Enrollees (By Age), 2020 Age ACA Premium After Tax Credit  /  BCRA Premium After Tax Credit  /  % Change

Under 18 / $110 $120 / 10%

18-34 /  $145 $169  / 17%

35-44 /  $194 $271 / 39%

45-54 /  $208 $403 / 94%

55-64 /  $271 $583  / 115%

65 and Older  / $310 $660  / 113%

Overall (All Ages)  / $197 $342  /74%

Source: Kaiser Family Foundation

These results vary significantly by income as well (Table 2). Marketplace enrollees with incomes below 200 percent of poverty would see an average increase in their premium costs of 177 percent, while higher income enrollees would see an increase of 57 percent.

Table 2: Monthly Premium for a Silver Plan Among Exchange Enrollees (By Income and Age), 2020
	Income Below 200% of Poverty			Income 200% of Poverty or Above
Age	ACA Premium After Tax Credit	BCRA Premium After Tax Credit	% Change	ACA Premium After Tax Credit	BCRA Premium After Tax Credit	% Change
< 18	$26	$58	121%	$176	$170	-4%
18-34	$57	$103	82%	$247	$247	0%
35-44	$69	$149	117%	$296	$369	25%
45-54	$67	$215	223%	$323	$556	72%
55-64	$69	$272	294%	$399	$782	96%
65 +	$76	$296	288%	$439	$862	96%
Overall	$61	$168	177%	$311	$489	57%
Source: Kaiser Family Foundation

There are important differences by age within these income groups: among enrollees with incomes below 200 percent of poverty, those in 18 to 34 age group would see an average increase of 82 percent while those in the 55 to 64 age group would see an average increase of 288 percent. Among enrollees with incomes 200 percent of poverty and above, enrollees in the 18 to 34 age group would not see an increase while those age 55 to 64 would see their premium costs almost double.

Discussion

The vast majority of marketplace enrollees would pay higher premiums in 2020 for a silver plan. Older and lower income enrollees see the biggest increases. These results are driven by several provisions in the BCRA. First, the BCRA reduces the value of the benchmark plan used to calculate the premium tax credits (from a plan that, on average, pays 70 percent of expected costs to a plan that pays 58 percent of expected costs). Lowering the benchmark means that marketplace enrollees could enroll in what is roughly a bronze plan by paying their required income percentage, but that they would need to pay the entire difference in premium to enroll in the silver level plans that are most prevalent today. The second factor is the change in the required income percentages under the BCRA, which generally would reduce what younger adults would be required to pay but increases the amounts paid by older adults, particularly those at higher incomes. Among people with higher incomes, reducing the maximum income eligibility for premium tax credits from 400 percent of poverty to 350 percent of poverty increases costs for some marketplace enrollees, particularly people at higher ages who face relatively high premiums. Increasing the permitted premium variation due to age also would increase premiums for older adults not eligible for premium tax credits.

These significant increases in the costs for silver plans may cause some or many marketplace enrollees to look to lower-value bronze-level plans, which they could purchase by paying their required income percentage. For younger marketplace enrollees, they generally would pay less under the BCRA to purchase a bronze level plan than they would pay for a silver plan under current law; older enrollees, however, generally would pay more for a bronze level plan under the BCRA than they would pay for a silver plan under current law. Moving down to bronze level plans, however, would expose enrollees to much higher cost sharing than in silver plans, and for many enrollees who now receive cost-sharing subsidies, the increases would be very large. The BCRA would eliminate the cost sharing subsidies provided under current law beginning in 2020.

The reduction in the value of the benchmark plan, along with the elimination of cost sharing subsidies, raises questions about whether lower income people would continue their coverage under the BCRA. While premiums after premium tax credits might be somewhat lower for younger enrollees purchasing bronze plans, their cost sharing would likely be thousands of dollars higher; the average deductible for bronze plans in 2017 with a combined deductible for medical and prescription expenses is $6,105; this compares to an average deductible of $809 for plans with cost sharing reductions for people with incomes between 150 and 200 percent of poverty and $255 for people with incomes between 100 and 150 percent of poverty. Many people with low incomes would have a difficult time paying the cost sharing under the benchmark plans in the BCRA, and may decide they do not want to pay even a relatively small premium for a plan that they would struggle to use.

Because of the short time between the release of the discussion draft and the planned debate and vote in the Senate, we were unable to address all of the provisions that might affect premiums under the BCRA. Our analysis assumes that unsubsidized premiums for a 40-year-old would ultimately be the same under the ACA and BCRA. In the score released today (June 26), the Congressional Budget Office expects the difference in unsubsidized premiums for a 40-year-old between the ACA and BCRA to be quite small in 2026, which is consistent with our assumption; however, they expect BCRA premiums to be relatively lower in 2020, due in part to larger federal funding available in 2020 to reduce premiums. While these changes would have some impact on our results, the impact would be muted because we have focused on the amount that people pay after tax credits, and for most marketplace enrollees, those amounts are determined by their required income percentage and not the actual plan premium. For these people, the actual premium affects the amount of their tax credit, but not what they would pay for a benchmark plan. Generally lower premiums would affect our results primarily for those marketplace enrollees who would pay the full premium with no premium tax credit under the BCRA. These generally would be people with higher incomes or younger people facing very low premiums such that the full premium would be less than their required income percentage.

Methods
We used data from the March 2016 Current Population Survey, the 2016 National Health Interview Survey and administrative data about the income and demographic distribution of the population enrolled in the federal and state marketplaces to construct a model of nongroup enrollees.

To impute marketplace enrollment status for each individual reporting directly purchased private health insurance to the March 2016 Current Population Survey, we applied a series of modeling techniques to the health insurance units (HIUs) described here in order to model the division of individuals holding nongroup coverage between those enrolled in a marketplace and those enrolled outside of a marketplace. Using the same multiply-imputed technique described here, we repeated our draw of each state’s nongroup population ten times to accurately account for sampling error.

We revised our Uninsured Calibration described in here to more closely align with the insurance coverage movements shown by the recent CDC publication of full-year 2016 National Health Interview Survey (NHIS) estimates.3 This CDC document shows continued gains in public coverage during the year and a leveling-off of private insurance coverage gains after the early 2016 Marketplace enrollment surge that mirrors administrative data sources. Our previous publications on this topic were calibrated to NHIS 2016 first quarter estimates; however, both HHS-published effectuated enrollment in the Exchanges at the end of March 2016 and also the insurer rate filings used to estimate the size of the off-marketplace population more closely align with the trends exhibited by NHIS 2016 full-year statistics.4 Calibrating to national CDC estimates allowed for on- and off-marketplace sampling targets consistent with administrative enrollment at the state level.

For each state’s on-marketplace and off-marketpace nongroup population, we drew purchasing units across five strata, each informed by federal data. For each state and the District of Columbia, we sampled subsidy-eligible marketplace enrollees both above and below 250% FPL, followed by a small group of ACA subsidy-eligibles forgoing help in the off-exchange market.5 Consistent with this administrative data, we also sampled a small group of wealthier nongroup enrollees (those not eligible for subsidies) into the Exchanges, and moved the remaining nongroup individuals into the off-exchange market. For non-immigrants with incomes below 100% of poverty, we calculate the amount of their required premium contribution as though their income were 138% of poverty. To most accurately reflect the age and income distribution of the Exchanges, each marketplace-purchasing unit received a sampling probability proportional to the average monthly subsidy per person within the state. At the conclusion of these ten repeated state sample draws, our average advanced premium tax credit (APTC) per month landed at $284 nationwide (compared to the $291 reported by HHS) and within $30 of the actual amounts displayed on table two of the HHS effectuated enrollment report for every geography except for the state of Connecticut.6 This close match of estimated APTC dollars for forty-nine states and the District of Columbia reflected a high degree of accuracy of the demographic (primarily age and income) distribution of our sampled exchange population.

To compare the effect of the Senate’s proposed Better Care Reconciliation Act (BCRA) against current law under the Affordable Care Act (ACA), we attached both the second lowest cost silver and the lowest cost bronze plan premiums to each individual in each local market. These 2017 premiums from the Kaiser Family Foundation’s Subsidy Calculator matched CPS respondents at the state and metropolitan area-level, with smaller areas not disclosed by the U.S. Census Bureau computed using a population-weighted average premium across the aggregation of non-metro areas. Matching our prior eligibility analyses, we computed ACA eligibility and subsidy receipt using the second lowest cost silver plan available to the HIU as the benchmark plan. To reflect the 58% Actuarial Value (AV) level stated by the BCRA, we used each geographic area’s lowest cost bronze plan as the benchmark plan for each HIU. In a small number of geographies without a bronze plan option for purchase on the 2017 exchanges, we used 85% of the silver plan as that local area’s benchmark plan premium. For each individual’s premium calculations under the BCRA, we relaxed the ACA’s 3:1 age rating to a 5:1 age band in all states that did not have community rating requirements in place prior to 2014. We followed CBO and HHS inflation factors to project all dollar values and thresholds to calendar year 2020. Using CBO’s economic projections,7 we inflated the 2015 income amounts in the 2016 CPS for each HIU to 2020 dollars. We increased premium dollars from 2017 to 2020 and both ACA and BCRA premium caps from 2014 to 2020 using Centers for Medicare & Medicaid Services Office of the Actuary projections.8 Our analysis assumes that states do not take up a waiver under the BCRA.

Gary Claxton, Larry Levitt, and Cynthia Cox are with the Kaiser Family Foundation. Anthony Damico is an independent consultant to the Kaiser Family Foundation.

http://www.kff.org/health-reform/issue-brief/premiums-under-the-senate-better-care-reconciliation-act/