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Date: 01-16-2020

Case Style:

United States of America v. Theresa C. Merced

Case Number: 5:20-cr-00006-DCR

Judge: Danny C. Reeves

Court: United States District Court for the Eastern District of Kentucky (Urban County)

Plaintiff's Attorney: Paul McCaffrey

Defendant's Attorney:


Call 918-582-6422 for free help finding a criminal defense lawyer in Lexington or Jackson, Kentucky.


Description: Lexington, KY - The United States of America charged Theresa C. Merced, age 80, with soliciting kickbacks.

A Jackson, Kentucky, woman admitted she solicited kickbacks from a toxicology laboratory in exchange for urine drug testing referrals, lied to law enforcement agents about the kickback she received, and then attempted to cover up the kickback by requesting the alteration of certain financial records.

Theresa C. Merced, 80, pleaded guilty to one count of violating the Eliminating Kickbacks in Recovery Act (EKRA), 18 U.S.C. § 220; one count of making false statements, 18 U.S.C. § 1001; and one count of attempted tampering with records, 18 U.S.C. § 1512.

Merced, the office manager of a substance abuse treatment clinic in Jackson, Ky., admitted that between December 2018 and August 2019, she solicited kickbacks from the CEO of a toxicology lab in exchange for urine drug test referrals. According to the plea agreement, in August 2019 the CEO delivered to Merced a $4,000 check as part of a larger package of promised inducements. Merced caused the check to be cashed. When Merced was questioned about the check by law enforcement agents in September 2019, she denied knowledge of it, and stated that the $4,000 was probably a loan from the lab CEO to her husband. Shortly after her interview with the agents concluded, Merced called the lab CEO and asked that he alter the lab’s financial records so that the entry for the $4,000 check would say “rent/loan,” consistent with the lie she told the agents.

EKRA, enacted by Congress in October 2018 as part of a broader package of legislation aimed at combatting the opioid crisis, prohibits, among other things, the solicitation or receipt of kickbacks in exchange for the referral of urine drug testing services. Merced’s EKRA conviction is believed to be the first in the nation.

The investigation was conducted by the U.S. Department of Health and Human Services, Office of Inspector General, and the Kentucky Office of Attorney General, Medicaid Fraud Control Unit.


Charges:


18:220(a) - SOLICIT CASH FOR REFERRING PATIENTS
(1)
§220. Illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories

(a) Offense.—Except as provided in subsection (b), whoever, with respect to services covered by a health care benefit program, in or affecting interstate or foreign commerce, knowingly and willfully—

(1) solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind, in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory; or

(2) pays or offers any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—

(A) to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory; or

(B) in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory,

shall be fined not more than $200,000, imprisoned not more than 10 years, or both, for each occurrence.

(b) Applicability.—Subsection (a) shall not apply to—

(1) a discount or other reduction in price obtained by a provider of services or other entity under a health care benefit program if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or entity;

(2) a payment made by an employer to an employee or independent contractor (who has a bona fide employment or contractual relationship with such employer) for employment, if the employee's payment is not determined by or does not vary by—

(A) the number of individuals referred to a particular recovery home, clinical treatment facility, or laboratory;

(B) the number of tests or procedures performed; or

(C) the amount billed to or received from, in part or in whole, the health care benefit program from the individuals referred to a particular recovery home, clinical treatment facility, or laboratory;

(3) a discount in the price of an applicable drug of a manufacturer that is furnished to an applicable beneficiary under the Medicare coverage gap discount program under section 1860D–14A(g) of the Social Security Act (42 U.S.C. 1395w–114a(g));

(4) a payment made by a principal to an agent as compensation for the services of the agent under a personal services and management contract that meets the requirements of section 1001.952(d) of title 42, Code of Federal Regulations, as in effect on the date of enactment of this section;

(5) a waiver or discount (as defined in section 1001.952(h)(5) of title 42, Code of Federal Regulations, or any successor regulation) of any coinsurance or copayment by a health care benefit program if—

(A) the waiver or discount is not routinely provided; and

(B) the waiver or discount is provided in good faith;

(6) a remuneration described in section 1128B(b)(3)(I) of the Social Security Act (42 U.S.C. 1320a–7b(b)(3)(I));

(7) a remuneration made pursuant to an alternative payment model (as defined in section 1833(z)(3)(C) of the Social Security Act) or pursuant to a payment arrangement used by a State, health insurance issuer, or group health plan if the Secretary of Health and Human Services has determined that such arrangement is necessary for care coordination or value-based care; or

(8) any other payment, remuneration, discount, or reduction as determined by the Attorney General, in consultation with the Secretary of Health and Human Services, by regulation.

(c) Regulations.—The Attorney General, in consultation with the Secretary of Health and Human Services, may promulgate regulations to clarify the exceptions described in subsection (b).

(d) Preemption.—

(1) Federal law.—This section shall not apply to conduct that is prohibited under section 1128B of the Social Security Act (42 U.S.C. 1320a–7b).

(2) State law.—Nothing in this section shall be construed to occupy the field in which any provisions of this section operate to the exclusion of State laws on the same subject matter.

(e) Definitions.—In this section—

(1) the terms "applicable beneficiary" and "applicable drug" have the meanings given those terms in section 1860D–14A(g) of the Social Security Act (42 U.S.C. 1395w–114a(g));

(2) the term "clinical treatment facility" means a medical setting, other than a hospital, that provides detoxification, risk reduction, outpatient treatment and care, residential treatment, or rehabilitation for substance use, pursuant to licensure or certification under State law;

(3) the term "health care benefit program" has the meaning given the term in section 24(b);

(4) the term "laboratory" has the meaning given the term in section 353 of the Public Health Service Act (42 U.S.C. 263a); and

(5) the term "recovery home" means a shared living environment that is, or purports to be, free from alcohol and illicit drug use and centered on peer support and connection to services that promote sustained recovery from substance use disorders.

S18:1001(a)(2) - FALSE STATEMENTS
(2)
18:1512(c)(1) - WITNESS TAMPERING
(3)

Merced is scheduled to be sentenced on May 1, 2020. She faces up to 20 years in prison and a maximum fine of $250,000. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.

Outcome: NOTICE regarding Passport for criminal defendant as to Theresa C. Merced: Dft not permitted to apply for issuance of passport or passport card during pendency of this action. (STC) (Entered: 01/14/2020)

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