Vero Beach doctor, wife to pay $22.6M settlement for falsifying diagnoses

WASHINGTON, D.C. – Dr. Walter Janke, his wife, Lalita Janke, and Vero Beach-based Medical Resources L.L.C. have agreed to pay $22.6 million to resolve allegations of Medicare fraud, the US Department of Justice said Monday.

The couple and medical business is accused of billing Medicare to pay inflated amounts based upon the submission of false diagnosis codes. The Jankes were the owners of America’s Health Choice Medical Plans Inc., a Medicare Advantage Organization approved by the federal health care program to provide health care to enrolled Medicare beneficiaries.

The Jankes also owned Medical Resources, America’s Health Choice’s primary care provider. The two companies are no longer doing business.

The agreement resolves a lawsuit brought by the United States in the U.S. District Court for the Southern District of Florida alleging that the Jankes and Medical Resources violated the False Claims Act by causing America’s Health Choice to falsely increase the severity of beneficiary diagnoses to obtain higher Medicare payments.

Under the Medicare Advantage Program, Medicare Advantage Organizations are paid more to provide services for members with serious and/or chronic medical conditions then they are for relatively healthy members.

In addition to suing the Jankes and Medical Resources, the United States successfully petitioned the court to freeze approximately $20 million of the Janke’s assets believed to be the proceeds of their unlawful scheme.

A portion of the Janke’s frozen assets, along with monies resulting from the dissolution of America’s Health Choice now held in receivership by the Florida Department of Financial Services, will be used to pay the settlement.

“Patients seeking health care should be able to rely on the diagnoses they are given,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “We will aggressively pursue those who falsify medical diagnoses in order to receive taxpayer funds to which they are not entitled.”

Christopher B. Dennis, Special Agent in Charge of the Department of Health and Human Services’ Miami Regional Office of Inspector General (HHS-OIG), stated while “the OIG continues to target healthcare fraud criminally, this case involving Medicare’s managed care program also reinforces the OIG’s commitment to civilly investigate health care fraud.”

“This case confirms that Medicare Advantage plans must comply with Medicare’s requirements that payment data must be accurate,” said The Centers for Medicare & Medicaid Services Administrator Donald Berwick, M.D.

Both agencies expressed appreciation for the Department of Justice’s willingness to collaborate with them on the case and to ensure that restitution be made to the Medicare Trust Fund and the federal taxpayers.

The settlement is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT), which was announced by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius in May 2009.

The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $4.2 billion since January 2009 in cases involving fraud against federal health care programs.

The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $5.8 billion.

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