Health care fraud remains a significant focus for federal and state enforcement agencies, with particular attention placed on the integrity of Medicaid and Medicare billing. The health care sector, and addiction treatment providers in particular, face heightened scrutiny due to the high volume of claims and the vulnerability of patient populations, particularly those in opioid addiction treatment programs. The United States District Court for the Northern District of Indiana recently sentenced Johann Farley, a Merrillville physician, after pleading guilty to health care fraud. The severity of these penalties should serve as caution to all physicians, but especially those involved in addiction treatment.
Conviction and Sentencing
Dr. Farley operated an addiction treatment practice in Merrillville, Indiana, where many of his patients struggled with opioid addiction. After pleading guilty, Dr. Farley was sentenced to 12 months and one day in prison, followed by one year of supervised release. He was also ordered to pay $557,000 in restitution to Indiana Medicaid and Medicare.
Case documents revealed that Dr. Farley’s billing practices included false claims for extended, complex patient visits that did not occur. Specifically, the United States Attorney’s Office stated: “Farley required these patients to come to his office frequently, sometimes on a daily basis, but the visits only lasted a few minutes, and his patients often did not even see him.” Between January 2016 and May 2020, he submitted over 7,000 claims for services he did not provide, amassing over half a million dollars in fraudulent payments.
In analyzing Dr. Farley’s misconduct versus the penalties imposed, other cases have involved more severe misconduct with defendants receiving comparatively lighter penalties. The doctor received only slightly more than $500,000 in excess payments, which appears minimal compared to other cases that have resulted in prison time. Thus, this case serves as a reminder of the potential for severe consequences for health care fraud, including imprisonment, hefty fines and the loss of a medical license. This disparity highlights the difficulty in accurately assessing the risks and potential penalties associated with health care fraud violations. As such, providers should prioritize billing compliance.
Practical Takeaways
- Ensure billing practices align with compliance standards: Physicians, particularly in addiction treatment, should prioritize compliance by verifying that all billing accurately reflects services rendered. Each claim should meet Medicaid and Medicare standards to prevent misrepresentation. Regular internal audits and staff training can help ensure that billing practices adhere to regulatory requirements, minimizing the risk of costly penalties or legal repercussions.
If you have questions or would like more information about this topic, please contact:
- David Honig at (317) 977-1447 or dhonig@hallrender.com;
- Kennedy Bunch at (317) 977-1420 or kbunch@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
