genznewsdaily

[genznewsdaily]

FDA Confirms Position Against Birth Tissue Medicare Q-code Billing

You may be wondering why I’m spending so much time blogging about Medicare Q-codes and shady birth tissue vendors. This could also be one of the biggest potential Medicare fraud recoveries in the history of the program. This past week it got way more interesting when the head of FDA CBER made it crystal clear that they were in the process of dismantling this house of cards. Let’s dig in.

Medicare, Birth Tissues, and Q-Codes

If you’ve never read about what I consider a massive billing scam, take a few minutes and watch my video below to catch up:

To quickly summarize we have birth tissue manufacturers who got a billing code (Q-code) in a Medicare rubber-stamp session and that are facilitating physicians to bill Medicare for the use of birth tissues to treat orthopedic problems. This is despite the fact that Medicare guidelines clearly do not support coverage for this indication. Why is that a big deal? Because fraudulently billing Medicare is a federal offense that carries 10 years in prison for each bill submitted.

How Big a Deal is This?

Early on in this scam, I was contacted by Medicare Fraud and Abuse contractors whose job it is to identify and prosecute this sort of stuff. They had already begun an investigation but wanted to know what I knew based on my blogs on this topic. They confirmed that Medicare was paying these claims in error.

Recently, from a back of napkin calculation, I think that by the time this mess gets cleaned up, there could be a billion or more dollars in government funds that have been incorrectly paid to providers for birth tissues used to treat orthopedic problems. Yes, that’s Billion with a “B”. So this is a VERY BIG deal.

Who Regulates Birth Tissues?

After a number of scathing letters and a public warning from the FDA that selling birth tissues like amniotic fluid or umbilical cord Wharton’s Jelly for orthopedic use is illegal and requires a full drug approval (which none of these companies have), one company has come up with a new public position that it’s actually CMS and Medicare that regulate the sale of the tissues they sell.

I have been seeing this new position evolve over the last few months. It’s basically that CMS is the agency that really regulates birth tissues. It began with BioLabs (another company telling physicians to bill Medicare for its birth tissue products used to treat orthopedic conditions), held a webinar where a podiatrist/coder explained how rigorous the Q-code review process was at CMS. After that, I began to see sales reps working for these vendors make statements that it was the granting of their Q-code by CMS that gave them all the regulatory legitimacy they needed. IMHO,

one of their VPs (Beeben Russel) made written statements on Linkedin again asserting that it was Medicare who actually regulated birth tissues and that since Medicare granted his company a Q-code, that meant that not only could Medicare reimburse it for orthopedic use, but that this also superseded the regulatory authority of the FDA. Is that correct? Let’s check that assertion with one made by Peter Marks, the head of CBER, this week.

[genznewsdaily]

Ex-manager of Brewer Chinese buffet pleads guilty to employing, harboring undocumented workers

The former manager of a buffet-style Chinese restaurant in Brewer that has been the target of a federal investigation since 2006 waived indictment Wednesday in U.S. District Court and pleaded guilty to multiple charges related to employing and harboring undocumented workers.

Mei Ya Zhang, 28, of Brewer, pleaded guilty to one count each of conspiracy and aiding and abetting harboring of illegal aliens for commercial advantage and private financial gain, money laundering conspiracy and conspiracy to file false employer’s quarterly federal tax returns.

Zhang was arrested in January, more than three years after the Twin Super Buffet was first raided in November 2011.

Zhang’s sentencing date has not been set. She remains free on $10,000 unsecured bond.

The Twin Super Buffet closed Feb. 25, according to a previously published report. Zhang said in early February that U.S. Immigration and Customs Enforcement, Homeland Security and U.S. Customs and Border Protection agents came to the restaurant three times in a 13-month period, but found no illegal activity.

Zhang said in February that she planned to work in the family’s Waterville restaurant.

The Zhang family owns the New China Super Buffet in Lewiston, the Super China Buffet in Waterville and the Kon Asian Bistro in Portland. It also owns five restaurants in Massachusetts and two in Rhode Island.

Zi Qian Zhang is the family patriarch and resides with his wife, Ai Hui Lu, in Massachusetts, according to court documents.

The older woman remains free on bail. Her sentencing date has not been set.

The investigation, which began in February 2006, revealed that the Zhang organization employed and harbored scores of illegal aliens at its Chinese buffets and bistros, according to court documents. The family allegedly harbored them at 11 safe houses located near the restaurants and ferried them to and from work in vans.

Federal prosecutors in April asked a federal judge to order the owners of 11 Chinese restaurants in three New England states to forfeit more than $153,000 seized from bank accounts in Maine.

Assistant U.S. Attorney Donald Clark alleged in a complaint that the Zhang organization skimmed nearly $2.9 million in cash transactions from the businesses in Maine, Massachusetts and Rhode Island over a 10-month period. The Zhang family also hired and housed undocumented workers whom they paid in cash without withholding taxes, according to the complaint.

Workers were paid between $1,200 and $2,000 a month in cash, and sometimes were required to work 70 or more hours per week, according to the complaint. They received no overtime pay, health insurance, workers’ compensation or other benefits.