Indictment — No. 2:22-cr-00180 (Dkt. 1, E.D.N.Y.)

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An indictment filed April 19, 2022 as Document 1 in United States v. Perry Frankel, Case 2:22-cr-00180-JS, in the U.S. District Court for the Eastern District of New York. The introduction describes the Medicare, Medicare Advantage and Medicaid programs, national provider identifier numbers and how providers submit claims. Counts One through Three are captioned Health Care Fraud, citing 18 U.S.C. § 1347, and a criminal forfeiture allegation follows under 18 U.S.C. § 982(a)(7).

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“Indictment — No. 2:22-cr-00180 (Dkt. 1, E.D.N.Y.).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-2-22-cr-00180-dkt-1-e-d-n-y-ded5d8a68e/, SHA-256 ccf1cba88a3ca9804c484ef0bce42246dee981cc42fe151f7fdf593a5d213090.

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Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 1 of 12 PageID #: 1

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA INDICTMENT

- against - fi Jl. 22 1
(T. 18, U.S.C., §§ 982(a)(7), 982(b)(1),
PERRY FRANKEL, 1347,2 and 3551 et seq.: T. JZl^
U.S.C.,§ 853(p))
Defendant.

X
SEYBERXX
THE GRAND JURY CHARGES: ^OCKE,M.J.
INTRODUCTION

At all times relevant to this Indictment, unless otherwise indicated:

I. Background

A. The Medicare and Medicaid Programs

1. The Medicare Program ("Medicare") was a federal health care program

providing benefits to persons who were over,the age of65 or disabled. Medicare was

administered by the Centers for Medicare and Medicaid Services("CMS"),a federal age:icy

under the United States Department ofHealth and Human Services. Individuals who received

benefits under Medicare were referred to as Medicare "beneficiaries."

2. Medicare was divided into multiple parts. Medicare Part A covered
health services provided by hospitals, skilled nursing facilities, hospices and home health

agencies. Medicare Part B covered outpatient hospital services and professional services

provided by physicians and other providers (collectively,"Providers").
Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 2 of 12 PageID #: 2

3. Medicare Part C—^also known as Medicare Advantage—offered

beneficiaries the opportunity to secure coverage ifirom private insurers ("Contractors")fbr many

ofthe same services that were provided by Parts A and B,in addition to certain mandatory and

optional supplemental benefits.

4. CMS provided fixed, monthly payments to the Contractors for ea^h

beneficiary enrolled in a Medicare Advantage plan administered by the Contractors. Tliese

monthly payments were referred to as "capitation" payments. To obtain payment for trsatment

or services provided to a beneficiary enrolled in a Medicare Advantage plan, health care

providers submitted itemized claim forms to the Contractors. .

5. The Medicaid Program ("Medicaid")in New York State was a federally

and state funded health care program providing benefits to individuals and families who met

specified financial and other eligibility requirements and certain other individuals who lacked

adequate resources to pay for medical care. CMS was responsible for overseeing the M edicaid

program. Individuals who received benefits imder Medicaid, like those who received b snefits

under Medicare, were referred to as "beneficiaries."

6. Medicaid covered the costs ofphysicians' services,and outpatient care,

among other services.

7. In New York State, Medicaid offered a managed care delivery sy^em to
provide Medicaid benefits to eligible beneficiaries called Medicaid Managed Care, Under

Medicaid Managed Care, private entities referred to as managed care organizations provi ded

insurance plans covering most Medicaid benefits to eligible beneficiaries in exchange foi*

monthly payments from New York State.
Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 3 of 12 PageID #: 3

8. Various private insurers, including, among others. Insurer-1,Insurer-2 and

Insurer-3 (collectively,the "Private Insurers"), entities the identities of which are known to the

Grand Jury, participated in Medicare Part C as Contractors and offered eligible member s the

opportunity to enroll in Medicare Advantage plans. Insurer-1 and lnsurer-2 also particijpated in
New York's Medicaid Managed Care plans.

9. Medicare, Medicare Advantage plans and Medicaid Managed Carle plans

were "health care benefit program[s]" as defined by Title 18, United States Code, Section 24(b).

10. CMS assigned Providers a unique national provider identifier("N PI")

number. A Provider used its assigned NPl number when submitting claims for reimbursement

to Medicare, Medicare Advantage plans and Medicaid Managed Care plans (collectively, the

"Health Care Benefit Programs").

11. A Provider was required to be enrolled with the Health Care Bene;It

Programs in order to submit claims. To enroll in Medicare, a Provider was required to enter into

an agreement with CMS in which the Provider agreed to comply with all applicable statutory,

regulatory and program requirements for reimbursement from Medicare. By signing the

Medicare enrollment application, the Provider certified that the Provider understood that

payment ofa claim was conditioned on the claim and the underlying transaction complying with

Medicare regulations. Medicare program instructions and federal law, and on the Provide r's

compliance with all application conditions of participation in Medicare. A similar agreement

was required ofProviders enrolled in Medicare Advantage plans and Medicaid Managed Care

plans.
Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 4 of 12 PageID #: 4

12. Providers were authorized to submit claims to the Health Care Benefit

Programs only for services that were medically necessary and actually provided to the

beneficiaries.

13. In order to receive payment for a service covered by the Health Care

Benefit Programs,the Provider was required to submit a claim for payment electronically or in

writing; The claim required the Provider to identify, arhong other infomiation: the Prov ider

submitting the claim; the Provider providing the service; the beneficiary; the services rendered;

the diagnosis or nature ofthe illness or condition treated; and the date or dates ofservice.

14. The Health Care Benefit Programs paid for claims only ifthe item s or

services were medically reasonable, medically necessary for the treatment or diagnosis ofthe

patient's illness or injury, documented and actually provided as represented.

B. CPT Codes for Evaluation and Management Services

15. A claim to the Health Care Benefit Programs identified the service or

services provided using billing codes, also known as current procedural terminology cod^s
("CPT Codes"), which specifically identified the medical service or services provided to

beneficiaries.

16. The Health Care Benefit Programs covered evaluation and managejment
services or "office visits" when certain requirements were met. The CPT Codes for evaluation

and management services were organized into various categories and levels. In general, the

more complex the visit, the higher the level ofreimbursement from insurance. To bill usfng any

CPT Code,the services furnished must have met the definition ofthe CPT Code.

17. Prior to January 1,2021, CPT Code 99202 was a code used to identify an

office or other outpatient visit for the evaluation and management ofa new patient, which
Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 5 of 12 PageID #: 5

required three key components: an expanded problem focused history; an expanded problem

focused examination; and straightforward medical decision making. The description of CPT

Code 99202 indicated that: (a)usually, the presenting problem(s) were oflow to moderate

severity; and(b)typically, 20 minutes were spent face-to-face with the patient and/or family.

18. Beginning on January 1,2021,CPT Code 99202 was a code usec to

identify an office or other outpatient visit for the evaluation and management ofa new

patient, which required a medically appropriate history and/or examination and straight brward

medical decision making. When selecting CPT Code 99202 based on time spent on the date of

the encounter,the code indicated that a total of 15-29 minutes was spent.

19. Prior to January 1,2021, CPT Code 99212 was a code used to identify an

office or other outpatient visit for the evaluation and management ofan established pati(mt,

which required at least two ofthe following three key components: a problem focused history;

a problem focused examination; and straightforward medical decision making. The description

of CPT Code 99212 indicated that: (a) usually, the presenting problem(s) were self-lin ited or

minor; and(b)typically, 10 minutes were spent face-to-face with the patient and/or fami ly.

20. Beginning on January 1,2021, CPT Code 99212 was a code used to

identify an office or other outpatient visit for the evaluation and management ofan established

patient, which required a medically appropriate history and/or examination and straightforward

medical decision making. When selecting CPT Code 99212 based on time spent on the date of

the encounter, the code indicated that a total of 10-19 minutes was spent.

21. Prior to January 1,2021, CPT Code 99213 was a code used to ideitify an

office or other outpatient visit for the evaluation and management of an established patient,

which required at least two ofthe following three key components: an expanded problem
Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 6 of 12 PageID #: 6

focused history; an expanded problem focused examination; and medical decision making oflow

complexity. The description ofCPT Code 99213 indicated that: (a) usually, the presenting

problem(s) were oflow to moderate severity; and(b)typically, 15 minutes were spent face-to-

face with the patient and/or family.

22. Beginning on January 1, 2021, CPT Code 99213 was a code used to

identify an office or other outpatient visit for the evaluation and management ofan established

patient, which requires a medically appropriate history and/or examination and low level of

medical decision making. When selecting CPT Code 99213 based on time spent on the date of

the encounter,the code indicated that a total of20-29 minutes was spent.

C. . The Defendant and Relevant Entity

23. The defendant PERRY FRANKEL was a medical doctor who was

licensed by the State ofNew York and whose principal area of practice was cardiology.

FRANKEL certified to Medicare that he would comply with all Medicare rules and regulations

and federal laws, including, among other things, that he would not knowingly present or cause to

be presented a false and jfraudulent claim for payment by Medicare. FRANKEL was the; owner

of Advanced Cardiovascular Diagnostics PLLC("Advanced Cardio"), a New York limited

liability company.

24. Advanced Cardio was a cardiology practice located in Great Neck,New

York. Advanced Cardio also operated numerous mobile COVID-19 testing sites throughout

Long Island, New York.

U. The Fraudulent Scheme

25. From approximately September 2020 to approximately March 2022,the

defendant PERRY FRANKEL,together with others, submitted and caused the submissiori of
Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 7 of 12 PageID #: 7

false and fraudulent claims to the Health Care Benefit Programs for evaluation and management

services during the COVID-19 pandemic that were medically unnecessary, not provided as

represented and ineligible for reimbursement

26. Specifically, the deferidant PERRY FRANKEL operated numeroiis mobile

COVID-19 testing sites at various locations throughout Long Island, New York (collectively, the

"Mobile Testing Sites"). The Mobile Testing Sites were staffed with mid-level provide rs,

including nurse practitioners and physicians' assistants and/or, in some instances, medical

assistants and COVID-19 swabbers (collectively,"Mobile Testing Site Staff). Beneficiaries
visited the mobile COVID-19 testing sites to be tested for COVID-19 and briefly met wi h the

Mobile Testing Site Staff, who typically interacted with patients for less than five minute|s, which

included collecting insurance information, asking patients whether they had COVID-19

symptoms and administering a nasal swab for COVID-19 testing. Often, patients remained in

their cars during the testing process. Beneficiaries at the Mobile Testing Sites did not receive

evaluation and management services as defined in CPT Codes 99202,99212 and 99213.

27. The defendant PERRY FRANKEL submitted or caused the submijsion of

claims to the Health Care Benefit Pro^ams using CPT Codes 99202,99212 and 99213 seeking
payments for evaluation and management services for beneficiaries who received C0VIE'-19

tests from the Mobile Testing Sites, when,in fact, these evaluation and management services

were not provided. For some claims, FRANKEL was not in the state ofNew York on the dates

he purportedly provided evaluation and management services at the Mobile Testing Sites.

FRANKEL was listed as the rendering provider for all ofthe evaluation and management

services purportedly provided at the Mobile Testing Sites.
Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 8 of 12 PageID #: 8

28. From approximately September 2020 to approximately March 2022,the

defendant PERRY FRANKEL submitted and caused to be submitted approximately $1.3 million

in claims to the Health Care Benefit Programs for evaluation and management services in

connection with COVID-19 testing that were medically unnecessary, not provided as represented

and ineligible for reimbursement.

COUNTS ONE THROUGH THREE
(Health Care Fraud)

29. The allegations contained in paragraphs one through 28 are realleged and

incorporated as iffully set forth in this paragraph.

30. In or about and between September 2020 and March 2022, both dates

being approximate and inclusive, within the Eastem District ofNew York and elsewhere,the

defendant PERRY FRANKEL,together with others, did knowingly and willfully execute; and

attempt to executed a scheme and artifice to defraud the Health Care Benefit Programs, which

were health care benefit programs, as that term is defined under Title 18, United States Code,

Section 24(b), and to obtain, by means of one or more materially false and fraudulent preienses,

representations and promises, money and property owned by, and under the custody and pontrol

ofthe Health Care Benefit Programs,in connection with the delivery ofand payment for!lealth

care benefits, items and services.

31. On or about the dates specified below, within the Eastem District o| New

York and elsewhere,the defendant PERRY FRANKEL,together with others, submitted aid

caused to be submitted the following false and fraudulent claims to the Health Care Benefjt

Programs for evaluation and management services that were not medically necessary, not

provided as represented, and ineligible for reimbursement, in an attempt to execute, and in

execution of, the scheme described above:

8
Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 9 of 12 PageID #: 9

Count Medicare Approximate Date Procedure Approi imate
Beneficiary of Claim Code Amount Billed

ONE Individual-1, an March 23,2021 OPT 99202 $250.00
individual whose
identity is known
to the Grand Jury
TWO Individual-2, and March 23,2021 OPT 99212 $200,00
individual whose
identity is known
to the Grand Jury
THREE IndividuaLS, an November 28,2021 OPT 99212 $200 00
individual whose
identity is known
to the Grand Jury

(Title 18, United States Code, Sections 1347,2 and 3551 et seq.)

CRIMINAL FORFEITURE ALLEGATION

32. The United States hereby gives notice to the defendant that, upon his

conviction ofany ofthe offenses charged herein, the government will seek forfeiture in

accordance with Title 18, United States Code, Section 982(a)(7), which requires any person
convicted of a federal health care offense to forfeit property, real or personal, that constitites, or

is derived directly or indirectly from,gross proceeds traceable to the commission ofsuch

offense.

33. Ifany ofthe above-described forfeitable property, as a result of an^ act or

omission ofthe defendant:

(a) cannot be located upon the exercise of due diligence;

(b) has been transferred or sold to, or deposited with, a third paijty;

(d) has been substantially diminished in value; or
Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 10 of 12 PageID #: 10

(e) has been commingled with other property which cannot be divided

without difficulty;

it is the intent ofthe United States, pursuant to Title 21, United States Code, Section 852|(p),as
incorporated by Title 18, United States Code, Sections 982(b)(1),to seek forfeiture of ar y other

property ofthe defendant up to the value ofthe forfeitable property described in the forfeiture

allegation.

(Title 18, United States Code, Sections 982(a)(7) and 982(b)(1); Title 21, United

States Code, Section 853(p))

A TRUE BILL

FOREPERSON

lEONPEACE ^
sTITED STATES ATTORNEY
EASTERN DISTRICT OF NEW YORK

1
JOSEPH S. BEEMSTERBQER
ACTING CHIEF,FRAUD SECTION
CRIMINAL DIVISION
U.S. DEPARTMENT OF JUSTICE

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Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 11 of 12 PageID #: 11

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Case 2:22-cr-00180-JS Document 1 Filed 04/19/22 Page 12 of 12 PageID #: 12

F. #2021R010S8

FORMDBD-34 No.
JUN.8S

UNITED STATES DISTRICT COURT
EASTERN District of NEW YORK

CRIMINAL DIVISION .

THE UNITED STATES OF AMERICA
VS.

PERRY FRANKEL.

Defendant.

INDICTMENT
(T. 18, U.S.C., §§ 982(a)(7), 982(b)(1), 1347,2 and 3551 et seg.; T.21,
U.S.C.,§ 853(p))

A true bill.
/y . n

Foreperson

Filed in open court this day,

of A.D.20

Clerk

Bail, $

Patrick J. Campbell and Kelly M.Lyons,DOJ Trial Attorneys,(718)
254-6366

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