Superseding Indictment — United States v. Ron K. Elfenbein, District of Maryland (Document 29)

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Superseding Indictment filed January 11, 2023 as Document 29 in United States of America v. Ron K. Elfenbein, Case 1:22-cr-00146-JKB, District of Maryland. Counts 1-5 charge Health Care Fraud under 18 U.S.C. § 1347, with aiding and abetting under 18 U.S.C. § 2. The indictment alleges that Elfenbein was a physician, owner and medical director of Drs ERgent Care, LLC, which operated COVID-19 testing sites, and that from in or around March 2020 through in or around February 2022 the defendant executed a scheme to defraud Medicare, Medicaid, TRICARE, commercial insurers and the HRSA COVID-19 Uninsured Program. It alleges false claims for evaluation and management services that were medically unnecessary and not provided as represented, and includes a forfeiture notice under 18 U.S.C. § 982.

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Case 1:22-cr-00146-JKB Document 29 Filed 01/11/23 Page 1 of 15

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

~—
UNITED STATES OF AMERICA CRIMINAL NO. () K-22 -| Uv
V. (Healthcare Fraud, 18 U.S.C. § 1347;
Aiding & Abetting, Principal, 18 U.S.C.
RON K. ELFENBEIN, § 2; Forfeiture, 18 U.S.C. § 982, 21 U.S.C. §
853(p), and 28 U.S.C. § 2461(c))
Defendant.

SUPERSEDING INDICTMENT

The Grand Jury charges that:

COUNTS 1-5
Health Care Fraud
(18 U.S.C. § 1347)

At all times material to this Superseding Indictment:

The Defendant and Relevant Entities

L. Defendant RON K. ELFENBEIN, a resident of Anne Arundel County, Maryland,
was a physician, owner, and the medical director of Drs ERgent Care, LLC.

oe Drs ERgent Care, LLC, d/b/a First Call Medical Center and Chesapeake ERgent
Care (hereinafter “Drs ERgent Care”), was a Maryland limited liability company that operated
medical clinics in Gambrills, Maryland, in the District of Maryland, and elsewhere. Drs ERgent
Care operated COVID-19 testing sites, including drive-through testing sites, in Anne Arundel and
Prince George’s Counties, including a location in Earleigh Heights, Maryland.

The Medicare, Medicaid, and TRICARE Programs

3. The Medicare Program (“Medicare”) was a federally funded program that provided

free or below-cost health care benefits to certain individuals, primarily the elderly, blind, and
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disabled, The benefits available under Medicare were governed by federal statutes and regulations.
The United States Department of Health and Human Services (“HHS”), through its agency, the
Centers for Medicare and Medicaid Services (“CMS”), oversaw and administered Medicare.
Medicare was divided into four parts: hospital insurance (Part A), medical insurance (Part B),
Medicare Advantage (Part C), and prescription drug benefits (Part D). Medicare Part B covered
medically necessary physician office services and outpatient care, including laboratory tests.

4. The Medicaid Program (“Medicaid”) was jointly funded by the federal and state
governments and was a program that provided health care benefits to certain low-income
individuals and families in states. Medicaid was administered by CMS and various state agencies.
Medicaid helped pay for reasonable and necessary medical procedures and services, such as
physician services, provided by qualified health care professionals. Maryland Medicaid, also
called Medical Assistance, was administered by the Maryland Department of Health and Mental
Hygiene.

5. The United States Department of Defense, through the Defense Health Agency,
administered the TRICARE program (“TRICARE”), which was a comprehensive health care
insurance program that provided health care benefits to United States military personnel, retirees,
and their families.

6. Medicare, Medicaid, and TRICARE were each a “health care benefit program,” as
defined by Title 18, United States Code, Section 24(b), and a “Federal health care program,” as
defined by Title 42, United States Code, Section 1320a-7b(f).

Fe Individuals who received benefits under Medicare, Medicaid, and TRICARE were
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referred to as “beneficiaries” or “recipients.”

8. Physicians, clinics, laboratories, and other health care providers (collectively,
“providers”) upon enrolling in Medicare, Medicaid, and TRICARE, could provide items and
services to beneficiaries and recipients, and upon submitting claims, receive reimbursement.

9 To enroll in Medicare, Medicaid, and TRICARE, providers were required to submit
an application in which the providers agreed to abide by the policies and procedures, rules, and
regulations governing reimbursement for the particular health care benefit program.

10. For instance, the Medicare provider enrollment application, CMS Form 855B, was
required to be signed by an authorized representative of the provider to enroll in Medicare. CMS
Form 855B contained a certification that stated:

I agree to abide by the Medicare laws, regulations, and program
instructions that apply to this supplier. The Medicare laws,
regulations, and program instructions are available through the
Medicare contractor. I understand that payment of a claim by
Medicare is conditioned upon the claim and the underlying
transaction complying with such laws, regulations and program
instructions (including, but not limited to, the Federal anti-kickback

statute and the Stark law), and on the supplier’s compliance with all
applicable conditions of participation in Medicare.

CMS Form 855B contained additional certifications that the provider “will not knowingly present
or cause to be presented a false or fraudulent claim for payment by Medicare, and [] will not submit
claims with deliberate ignorance or reckless disregard of their truth or falsity.”

11. An enrolled provider who provided items or services to beneficiaries or recipients
was able to submit claims for reimbursement to the appropriate health care benefit program.

Payments were often made directly to the provider, rather than to a beneficiary or recipient. This
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payment occurred when the provider submitted the claim for payment, either directly or through a
billing company.

12. Medicare, Medicaid, and TRICARE regulations required providers to maintain
complete and accurate patient medical records reflecting the medical assessment and diagnoses of
their patients, as well as records that documented actual treatment of the patients to whom services
were provided and for whom claims for payment were submitted by the physician. Medicare,
Medicaid, and TRICARE required complete and accurate patient medical records so that
Medicare, Medicaid, and TRICARE would be able to verify that the services were provided as
described on the claim form. These records were required to be sufficient to permit Medicare,
Medicaid, or TRICARE, or their contractors, to review the appropriateness of payments made to
the provider.

13. When seeking reimbursement for provided benefits, services, or items, providers
submitted the cost of the benefit, service, or item provided together with a description and the
appropriate “procedure code,” as set forth in the Current Procedural Terminology (“CPT”) Manual
or the Healthcare Common Procedure Coding System (“HCPCS”). Additionally, claims submitted
seeking reimbursement included: (a) the beneficiary’s or recipient’s name and Health Insurance
Claim Number (““HICN”); (b) the date upon which the benefit, item, or service was provided or
supplied to the beneficiary or recipient; and (c) the name of the rendering provider, as well as the
provider’s unique identifying number, known either as the Unique Physician Identification

Number (“UPIN”) or National Provider Identifier (“NPI”).
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14. | Medicare, Medicaid, and TRICARE paid for claims only if the items or services
were medically reasonable, medically necessary for the treatment or diagnosis of the patient’s
illness or injury, documented, and actually provided as represented. By submitting claims to
Medicare, Medicaid, and TRICARE, the provider certified, among other things, that its services
on behalf of beneficiaries and recipients complied with Medicare, Medicaid, and TRICARE’s rules
and regulations and Federal law, including those related to fraud, waste, and abuse.

Commercial Insurance Plans

13. Commercial insurance plans were provided by private health insurance companies
(“Commercial Insurers”) that offered individual and group health benefit plans under which
individuals could obtain coverage for health care items and services. Individuals who received
benefits from Commercial Insurers were referred to as “members.”

16. Each of the Commercial Insurers was a “health care benefit program,” as defined
in Title 18, United States Code, Section 24(b) and Title 18, United States Code, Section 220(e)(3).

17. Commercial Insurers often made payments directly to providers, rather than to
members who received the health care benefits, items, and services.

18. To obtain payment for treatment or services provided to a member, providers were
required to submit itemized claim forms to the member’s commercial insurance plan. The claim
forms were typically submitted electronically. The claim form required certain important
information, including: the member’s name and identification number; a description of the health
care benefit, item, or service that was provided or supplied to the member; the billing codes for

the benefit, item, or service; the date upon which the benefit, item, or service was provided or

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supplied to the member; and the name of the referring provider, as well as the applicable
identification number for the referring provider.

19. When a provider submitted a claim to Commercial Insurers, the provider certified
that the contents of the form were true, correct, complete, and that the form was prepared in
compliance with applicable laws and regulations. The provider also certified that the items or
services being billed were medically necessary and were in fact provided as billed.

HRSA COVID-19 Uninsured Program

20. The Families First Coronavirus Response Act (“FFCRA”) was a federal law
enacted on or about March 14, 2020, as part of the federal government’s initial response to the
then-emerging coronavirus pandemic.

21. The FFCRA, among other things, appropriated funds to reimburse the cost of
providing diagnostic testing and services for COVID-19 in individuals without health insurance.
These funds, and additional funds appropriated through subsequent legislation for testing,
treatment, and vaccines for uninsured individuals, were distributed through the COVID-19 Claims
Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine
Administration for the Uninsured Program (“HRSA COVID-19 Uninsured Program”). The HRSA
COVID-19 Uninsured Program was administered by HHS through its agency, the Health
Resources and Services Administration (“HRSA”). HRSA had a contract with UnitedHealth
Group to handle claims administration and payments and provided reimbursements on a rolling

basis directly to eligible providers.
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22. The HRSA COVID-19 Uninsured Program was a “health care benefit program,” as
defined by Title 18, United States Code, Section 24(b), and a “Federal health care program,” as
defined by Title 42, United States Code, Section 1320a-7b(f).

23. In order to receive reimbursement under the HRSA COVID-19 Uninsured
Program, a provider had to submit claims, with respect to uninsured individuals, for: (a) COVID-
19 testing, which meant a test for the detection of SARS-CoV-2 or the diagnosis of the virus that
causes COVID-19, as well as testing-related items and services such as an office visit or telehealth
visit that resulted in the administration of a COVID-19 test; (b) care or treatment related to positive
diagnoses of COVID-19, where COVID-19 was the primary reason for treatment; or (Cc)
administering a COVID-19 vaccination.

24. Providers seeking reimbursement under the HRSA COVID-19 Uninsured Program
were required to enroll as a provider participant, check to ensure that patients were uninsured,
submit claims and patient information electronically, and receive payment through direct deposit.
Reimbursements were generally made at Medicare rates.

Evaluation and Management CPT Codes

25. In 2020, evaluation and management services (sometimes referred to as “E/M
Services” or “office visits”) were billed using CPT codes 99201 through 99205 for new patients,
and 99211 through 99215 for existing patients. In 2021, CPT code 99201 was deleted, and E/M
Services were billed using CPT codes 99202 through 99205 for new patients, and 99211 through
99215 for existing patients. The code that providers were required to bill for E/M Services were

organized into various categories and levels. In general, the more complex the visit, the higher the

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level of code a provider could bill within the appropriate category. To bill any code, the services
furnished must have met the definition of the code, been medically necessary, and occurred as
represented.

26: The 2020 code description for CPT code 99204 was: “[o]ffice or other outpatient
visit for the evaluation and management of a new patient, which requires these 3 key components:
A comprehensive history; A comprehensive examination; Medical decision making of moderate
complexity. Counseling and/or coordination of care with other physicians, other qualified health
care professionals, or agencies are provided consistent with the nature of the problem(s) and the
patient’s and/or family’s needs. Usually, the presenting problem(s) are of moderate to high
severity. Typically, 45 minutes are spent face-to-face with the patient and/or family.” The 2021
code description for CPT code 99204 was: “Office or other outpatient visit for the evaluation and
management of a new patient, which requires a medically appropriate history and/or examination
and moderate level of medical decision making. When using time for code selection, 45-59
minutes of total time is spent on the date of the encounter.”

27. The 2020 code description for CPT code 99214 was: “Office or other outpatient
visit for the evaluation and management of an established patient, which requires at least 2 of these
3 key components: A detailed history; A detailed examination; Medical decision making of
moderate complexity. Counseling and/or coordination of care with other physicians, other
qualified health care professionals, or agencies are provided consistent with the nature of the
problem(s) and the patient’s and/or family’s needs. Usually, the presenting problem(s) are of

moderate to high severity. Typically, 25 minutes are spent face-to-face with the patient and/or

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family.” The 2021 code description for CPT code 99214 was: “Office or other outpatient visit
for the evaluation and management of an established patient, which requires a medically
appropriate history and/or examination and moderate level of medical decision making. When
using time for code selection, 30-39 minutes of total time is spent on the date of the encounter.”

The Scheme to Defraud

28. From inor around March 2020, and continuing through in or around February 2022,
in the District of Maryland, the defendant, RON K. ELFENBEIN, aided and abetted by others,
and aiding and abetting others known and unknown to the Grand Jury, in connection with the
delivery of and payment for health care benefits, items, and services, did knowingly and willfully
execute and attempt to execute a scheme to defraud a health care benefit program affecting
commerce, as defined in Title 18, United States Code, Section 24(b), that is, Medicare, Medicaid,
TRICARE, Commercial Insurers, and the HRSA COVID-19 Uninsured Program, and to obtain
and attempt to obtain, by means of materially false and fraudulent pretenses, representations, and
promises, money and property owned by, and under the custody and control of Medicare,
Medicaid, TRICARE, Commercial Insurers, and the HRSA COVID-19 Uninsured Program, in
violation of Title 18, United States Code, Sections 1347 and 2 (hereinafter the “scheme to
defraud”).

Purpose of the Scheme to Defraud

20, It was a purpose of the scheme to defraud for the defendant, RON K.
ELFENBEIN, to unlawfully enrich himself and others by: (a) submitting and causing the

submission of false and fraudulent claims to Medicare, Medicaid, TRICARE, Commercial

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Insurers, and the HRSA COVID-19 Uninsured Program for E/M Services during the COVID-19

pandemic that were medically unnecessary, not provided as represented, and ineligible for

reimbursement; (b) concealing the submission of false and fraudulent claims and the receipt and

transfer of the proceeds of the fraud; and (c) using proceeds of the fraud for the personal use and

benefit of the defendant and others.

30.

Manner and Means of the Scheme to Defraud

The manner and means by which the defendant, RON K. ELFENBEIN, and others

known and unknown to the Grand Jury sought to accomplish the objects and purpose of the scheme

to defraud included, among other things:

a.

b.

RON K. ELFENBEIN controlled, operated, and directed Drs ERgent Care.

RON K. ELFENBEIN submitted and caused the submission of enrollment
documents to Medicare for Drs ERgent Care, in which he attested he would “not
knowingly present or cause to be presented a false or fraudulent claim for payment
by Medicare, and [] will not submit claims with deliberate ignorance or reckless
disregard of their truth or falsity.”

RON K. ELFENBEIN caused Drs ERgent Care to enroll and contract with
Commercial Insurers, including CareFirst BlueCross BlueShield, to provide
services to the Commercial Insurers’ members.

RON K. ELFENBEIN caused Drs ERgent Care to offer COVID-19 testing to
members of the public, as the effects of the COVID-19 pandemic were felt in the

United States and many individuals were reporting difficulty obtaining tests to

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determine whether they were infected with the COVID-19 virus.

e. RON K. ELFENBEIN, through Drs ERgent Care, offered COVID-19 testing, but
required that the COVID-19 tests and the reporting of results be bundled, i.e.,
required to be billed in combination with more lucrative, but medically
unnecessary, services, such as E/M Services, that were purportedly of a 30-minute
or longer duration, or involving moderate or high levels of medical decision
making, but did not in fact occur as represented.

f. RON K. ELFENBEIN instructed providers and other employees of Drs ERgent
Care to submit claims to Medicare and other payors for these lucrative E/M
Services knowing that some or all of the beneficiaries were being seen by providers
for less than five minutes total. Nevertheless, RON K. ELFENBEIN instructed
providers and other employees to bill the encounters as moderate complexity E/M
Services even though such encounters did not occur as represented.

g. RON K. ELFENBEIN instructed providers and other employees of Drs ERgent
Care to submit claims for these lucrative E/M Services because the higher
complexity E/M Services were “the ‘bread and butter’ of how we get paid... a
99202 pays way less than a 99204.”

h. RON K. ELFENBEIN, through Drs ERgent Care, submitted and caused the
submission of claims to Medicare, Medicaid, TRICARE, Commercial Insurers, and
the HRSA COVID-19 Uninsured Program for E/M Services that were medically

unnecessary, not provided as represented, and ineligible for reimbursement.

1]
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31.

i. RON K. ELFENBEIN, through Drs ERgent Care, submitted in excess of the

approximate amount of $30 million in claims for reimbursement to Medicare,

Medicaid, TRICARE, Commercial Insurers, and the HRSA COVID-19 Uninsured

Program for moderate complexity E/M Services in conjunction with COVID-19

tests, and was paid approximately $10 million on those claims.

the defendant,

The Charges

RON K. ELFENBEIN,

On or about the dates set forth as to each count below, in the District of Maryland,

aided and abetted by others, and aiding and abetting others known and unknown to the Grand Jury,

for the purpose of executing and attempting to execute the scheme to defraud as described above,

submitted and caused the submission of the following false and fraudulent claims to Medicare and

CareFirst Blue Cross Blue Shield for E/M Services that were medically unnecessary, not provided

as represented, and ineligible for reimbursement, each submission constituting a separate count:

Count | Medicare Date of Date of Claim No. Payor Procedure
Beneficiary | Submission | Service Code;
of Claim Amount
Billed
1 A.H. 03/29/2021 | 03/25/2021 | 691021088249240 | Medicare | CPT 99204
$354.22
2 W.R. 05/03/2021 | 04/23/2021 | 691021123406780 | Medicare | CPT 99204
$354.22
3 D.M. 05/12/2021 | 05/10/2021 | 691021132127230 | Medicare | CPT 99204
$354.22
4 JJ. 03/5/2021 | 03/2/2021 372663924 CareFirst | CPT 99214
BCBS $231.50

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Count | Medicare Date of Date of Claim No. Payor Procedure
Beneficiary | Submission| Service Code;
of Claim Amount
Billed
5 S.T. 04/28/2021 | 04/19/2021 327993824 CareFirst | CPT 99204
BCBS $354.22

Each in violation of Title 18, United States Code, Sections 1347 and 2.

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FORFEITURE ALLEGATION
(18 U.S.C. § 982, 21 U.S.C. § 853(p), 28 U.S.C. § 2461(c))

The Grand Jury for the District of Maryland further finds that:

l. Pursuant to Federal Rule of Criminal Procedure 32.2, notice is hereby given to the
defendant that the United States will seek forfeiture as part of any sentence in accordance with 18
U.S.C. § 982, 21 U.S.C. § 853(p), and 28 U.S.C. § 2461(c), in the event of the defendant’s
conviction on any of the offenses charged in this Superseding Indictment.

2. Upon conviction of any of the offenses set forth in this Superseding Indictment, the
defendant, RON K. ELFENBEIN, shall forfeit to the United States, pursuant to 18 U.S.C.
§ 982(a)(7), any property, real or personal, that constitutes or is derived, directly or indirectly, from
gross proceeds traceable to the commission of the offense.

Substitute Assets

3. If any of the property described above, as a result of any act or omission of the
defendant:
a. cannot be located upon the exercise of due diligence;
b. has been transferred or sold to, or deposited with, a third party;
c. has been placed beyond the jurisdiction of the Court;
d. has been substantially diminished in value; or
e. has been commingled with other property that cannot be subdivided without
difficulty;

the United States shall be entitled to forfeiture of substitute property pursuant to 21 U.S.C. §

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853(p), as incorporated by 18 U.S.C. § 982(b)(1) and 28 U.S.C. § 2461(c).

Erek L. Barron

United States Attorney
District of Maryland

36 S. Charles Street, 4'" Floor
Baltimore, Maryland 21201

GLENN S. LEON

Chief

Criminal Division, Fraud Section
United States Department of Justice

D>KEITH CLOUSER

Trial Attorney

Criminal Division, Fraud Section

U.S. Department of Justice

1400 New York Avenue, N.W., Eighth Floor
Washington, D.C. 20005

(202) 256-0867

A TRUE BILL:
SIGNATURE REDACTED dialzon's

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