Complexity of health care industry enables fraud schemes, NE Ohio doctors charged for overbilling

Health care fraud is an estimated $60 billion business every year and two Cleveland-area doctors have been federally indicted for allegedly playing a role in the illegal enterprise.

Dr. Ashis Rakhit and Dr. Jayati Rakhit, who are married, were arraigned Wednesday on nearly two dozen counts of health care fraud-related offenses.

The Rakhits were federally indicted on one count of conspiracy to commit healthcare fraud; 11 counts of healthcare fraud; six counts of making false statements to healthcare matters and three counts of distributing controlled substances.

According to a leading expert, health care fraud is pervasive, because the massive industry is convoluted and complex, featuring so many different public and private payers.

Between 2011 and 2018, Dr. Ashis Rakhit, 65, and Dr. Jayati Rakhit, 56, allegedly recorded fake symptoms present in their patients in order to perform unnecessary and expensive tests. The tests included nuclear stress tests, cardiac catheterizations, bone density scans and EKGs.

The two longtime doctors are also accused of overbilling Medicare, Medicaid and private insurance companies by inflating codes to reflect more costly procedures and tests that weren’t actually performed, according to the indictment.

Overbilling and “ghost billing” are common ways to commit health care fraud. According to Louis Saccoccio, the CEO of the National Health Care Anti-fraud Association, both schemes generally span numerous patients and providers over an extended period of time. The illegal activity is typically spread out in order to avoid suspicion. 

“It’s being committed against Medicare, Medicaid and various insurance companies,” Saccoccio said. “It takes a while for that is happening to show up in the data.”

Most insurance providers, both public and private, use analytics and big data to spot trends and anomalies in the billing practices of thousands of doctors. That information acts as a lead for law enforcement agencies. The data can also be shared amongst other providers, Saccoccio said. This information-sharing allows providers and the NHCAA to proactively combat health care fraud, which is a $60 billion business annually.

And that’s a conservative estimate.

However, even with the abundance of data, oftentimes dirty doctors aren’t detected until well after the fraud has been committed, Saccoccio said.

“Many times, it is after-the-fact. In many circumstances, you are in a ‘pay and chase’ type of situation, where it’s been detected but the claims have been paid, so you have to go after the individuals and get that money back.”

Oftentimes, that money is never fully recouped. Safeguards can be made more proactive by using additional investigators and making further investments in data collection, Saccoccio said.

“Health care fraud is not just a financial crime,” Saccoccio said.

While health care fraud severely impacts taxpayers and private insurance customers, there’s also a risk to patient safety.

Federal authorities also allege the Rakhits distributed controlled substances outside their medical practice. The couple allegedly traded drugs, like Percocet and Xanax, in an effort to lure patients into their fraudulent scheme.

“They’ve put prescription pain killers on a street at a time when we are facing an unprecedented crisis in terms of opioid overdoses and deaths,” said Justin Herdman, the U.S. Attorney for the Northern District of Ohio. “They’ve put vulnerable people in a position to face a pathway toward addiction. You’ve got two physicians here who took an oath to protect their patients – to do no harm – and they’ve turned around and violated the trust of their patients.”

The couple, who both specialized in cardiovascular disease and internal medicine, had privileges at St. Vincent Charity Medical Center and operated offices from Ohio Cardiology Associates, which had locations at 2322 E. 22nd Street in Cleveland, 10850 Pearl Rd. in Strongsville and 6789 Ridge Rd. in Parma. According to the indictment, Ashis Rakhit also practiced at 7211 Broadway Avenue, where authorities conducted a raid on Wednesday morning.

“Whether it’s in the health care fraud space or narcotics violations or violent crime, we always hope there’s a deterrent effect in the cases that we bring,” Herdman said. “I wish it were the only instance we had of this but unfortunately we’ve seen cases that are similar to this in the past. I would love to say that we would never see another one of these in our district but I think that’s unrealistic.”

St. Vincent Charity Medical Center has suspended the admitting privileges of the Rakhits. According to a hospital spokesperson, patients are being connected to other physicians.

In accordance with Ohio state law, both doctors have been temporarily barred from submitting claims to the state’s Medicaid program. If they are convicted, they will be permanently barred from submitting Medicaid claims.

The two doctors have pleaded not guilty. As a condition of their bond, both had to surrender their passports and travel visas. They also have to notify pre-trial services if they make wire transfers exceeding $5000. The couple reportedly has more than $20 million in assets and frequently makes large transfers to their home country of India, prosecutors said.

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