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Taylor Swift, Justin Bieber and the comprehensive nature of kickbacks


Two of the biggest pop stars on the planet are involved in healthcare fraud schemes that stole millions from Medicare.

It's true. Sort of.

No, Justin Bieber is not billing Medicare for unnecessary services and Taylor Swift isn't falsifying patient records, in between crooning out platinum records. But they are both entwined in multi-million dollar schemes, even if they don't know it.

Earlier this month, Nurses' Registry and Home Health Corporation, based in Lexington, Kentucky, agreed to pay $16 million to settle charges that the company provided kickbacks to local physicians in exchange for home health referrals. For eight years, the company used those referrals to bill Medicare for services that were never needed, often falsifying medical records or forging physician signatures to make it appear the patients they were caring for were homebound.

Instead of offering cash--usually go-to bribe in these fraud schemes--the company offered tickets to sporting events and concerts, including tickets to Taylor Swift concerts.

That was just one of many requests. Nurses' Registry was also a corporate sponsor of University of Kentucky athletics, and the company's owner, Lennie House, was a "significant contributor" to the K Fund, a school spokesman told Kentucky.com in 2011. His donations got him four season tickets to UK basketball games each year, which he then distributed to doctors with high referral rates. House even had tickets to the Kentucky Derby, but when one physician requested them, he was told to send more referrals, according to the Wall Street Journal. Nurses' Registry filed for bankruptcy in June.

If there is a common theme here, it's that physicians are both devoted sports fans and music enthusiasts. Over the summer, a New York doctor was indicted for taking bribes from Biodiagnostic Laboratory Services LLC (BLS), a company accused of shelling out as much as $200,000 in kickbacks each month to dozens of physicians in exchange for test referrals. The New York physician, Bret Ostrager, was indicted for not just accepting cash bribes, but for specific requests for the New York Mets, the New York Knicks, the Broadway show "Newsies," and tickets to Katie Perry and Justin Bieber concerts, according to the Department of Justice.  

Of course, the healthcare industry has a long history of strange kickback schemes that go beyond the usual cash bribes. Earlier this year, Michael Reinstein, a Chicago physician who prescribed an unusually high amount of the antipsychotic drug clozapine, was indicted for fraud after taking kickbacks from the drug's manufacturer, Teva Pharmaceuticals. The company flew Reinstein, his wife, and seven other associates to Miami for fishing trips, boat outings and golf, according to the Chicago Tribune. Subsequent trips included a $2,300 boat cruise and $1,700 in meals, in addition to $100,000 he received in speaking fees each year.

In 2012, San Diego-based Victory Pharmacy Inc. (VPI) paid $11.4 million to settle charges that it provided kickbacks to entice physicians to promote the company's drugs. According to the indictment, VPI sales reps bought ski lift tickets, NBA and MLB tickets, and tickets to Broadways shows. VPI once paid for a strip club outing for one physician's staff, and even pitched in for the lap dances, according to The Washington Times.

And in August, a group of four chiropractors and therapists pleaded guilty to a rather innovative $4 million scheme, in which they lured patients to their facility by offering free massages, lunches, cash-equivalent coupons and recreational classes, according to the indictment. The four then billed Medicare for physical therapy, occupational therapy and chiropractic services. It was similar to a previous scheme, discovered by Blue Cross Blue Shield of Michigan, where the office manager for a physical therapist went to a casino and offered coupons for free 30-minute massages. Subsequently, BCBS Michigan payments to the provider increased 400 percent, with a 93 percent error rate.

As it turns out, kickbacks come in all shapes and sizes, from the standard cash payments to even stranger (and humorous) requests. So, the next time you're feeling down, just picture a 50-year-old family practice physician surrounded by thousands of hysterical teenage girls screaming for Justin Bieber. It's sure to give you a smile. - Evan (@HealthPayer)