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AIS's Health Business Daily
Featured Story October 24, 2008 Compliance Officer Is Accused of Second Contracting Scam, as Feds Seek to Revoke Her Bail Reprinted from REPORT ON MEDICARE COMPLIANCE, the nation's leading source of news and strategic information on false claims, overpayments, compliance programs, billing errors and other Medicare compliance issues. By Nina Youngstrom, Managing Editor, (nyoungstrom@aispub.com) A federal judge in Hawaii may jail a compliance officer until her trial on charges of defrauding a Honolulu hospital through sham consulting contracts amid allegations that she replicated the scam at a Florida HMO while out on bail. Patricia M. Syling was arrested Sept. 29 in Tampa, Fla., after the U.S. District Court for the District of Hawaii issued a warrant for her arrest. Syling is en route to Honolulu, where the federal court will decide whether to revoke her bail or again grant pretrial release. The request for detention was filed by Pretrial Services, the arm of the court responsible for monitoring people on bail. Her mail-fraud trial is slated for November, although it might be delayed. New allegations have been leveled against Syling by Citrus Health Care, Inc., a Tampa-based HMO. In a lawsuit filed Sept. 29 against Syling and one of her consulting firms, Healthcare Solutions Group, the HMO alleges that while she was its compliance officer, Syling allegedly fabricated a Citrus contract with HSG and used it to pay her firm $1.3 million for services never performed. The HMO, which has contracts with Medicare and Medicaid, also contends Syling used a fake name and lied about her credentials to get the compliance officer job. The allegations have been reported to the U.S. attorney's office and the FBI office in Tampa. (No criminal charges have been filed in the HMO case.) If the allegations are true, "Syling apparently took advantage of the trust placed in compliance officers, which is so important, to steal from her employer," says former federal prosecutor Sheila Sawyer, who is now with the law firm Waller Lansden Dortch & Davis, LLP in Nashville, Tenn. "On the other hand, why didn't the HMO do a background check?" Syling has pleaded not guilty to the charges in Hawaii. She denies allegations of wrongdoing in Citrus's complaint, according to her lawyer in that case, Robert Hearn. He tells RMC that "it's very early. We are investigating allegations in the complaint, but so far it looks like a business dispute." About a year ago, Syling was indicted for mail fraud in connection with her compliance activities at The Queen's Medical Center, a 600-bed nonprofit hospital in Honolulu. She became the hospital's corporate compliance administrator and director of the revenue cycle in 2001. While in this position, she privately established two consulting firms, HealthCare Financial Group (HFG) and HealthCare Financial & Compliance Management (HFCM), which she operated, alone, out of her house, according to the indictment. Then she arranged for The Queen's Medical Center to hire her firms for various consulting services, including compliance, HIPAA, chargemaster review and collections - for which the hospital paid half-a-million dollars, says the indictment. The U.S. attorney's office in Honolulu alleged Syling was being paid again through the consulting firms for work she performed or should have performed as the employed compliance officer. She resigned from the hospital in 2004. Her alleged scheme began to unravel when her replacement questioned the contracts. In court papers, she denies the charges, saying the hospital knew about the consulting work and approved the contracts. One executive was aware she owned the firms, Syling maintains. Her lawyer for the criminal case did not return RMC's calls. The court in Honolulu allowed Syling to move to Florida while out on bail in the mail-fraud case. She was monitored by the pre-trial release office in Tampa. But according to the lawsuit's allegations, the change of scenery did not prompt a change in behavior. Irregularities Alleged From Early On The lawsuit filed by Citrus alleges irregularities from the day she applied for the compliance-officer job. Not even the name she gave the HMO was real, the complaint says. Syling used a fake one — Patricia Dunne — and her ex-husband's Social Security number, according to the suit. "Syling fabricated nine years of experience as a compliance officer with an entity named [HFG]," which she said was a division of Blue Cross Blue Shield of Ohio, the lawsuit alleges. Syling began working for Citrus in October 2007. About a month later, she allegedly told the HMO that it should hire a consulting firm for audits and repricing. She then selected a firm — which turned out to be HSG, her own, one-woman show - and drafted and filed away a "consulting services agreement" between Citrus and HSG that was purportedly executed in 2006, says the complaint. The agreement called for HSG to perform various services, such as auditing claims for fraud, waste and abuse according to Medicare and Medicaid guidelines, doing collections and developing audit protocols. The consulting agreement bore a forged or lifted signature of Citrus's president and chief operating officer, the lawsuit alleges. HSG, which was located at Syling's home in Lutz, Fla., and had no clients, did not exist at the time the agreement was signed, the lawsuit states. She filed articles of incorporation with the state in March 2007, so the consulting arrangement with the hospital allegedly predated HSG's official existence by 11 months. Syling, who never disclosed her ownership of HSG to Citrus, "began processing invoices for service allegedly provided by HSG and requesting payment to HSG" under the agreement, the lawsuit contends. The HMO then began issuing checks to HSG, at Syling's request, for services like "training in survey for fraud and abuse," compliance auditing, quality-report medical review and recovery of claims. Two of the checks Citrus wrote HSG were for huge amounts — $395,000 and $408,000. The lawsuit also alleges that Syling got Citrus to pay HFG, which is incorporated in Tennessee but is a sole proprietorship. HFG is the consulting firm she allegedly used to defraud the Honolulu hospital and then reported as her former employer when applying to the Citrus job. But "HSG and HFG provided no services and did not recover any amount for overpaid claims," the lawsuit alleges. Citrus is suing her to recover the money, alleging fraud, breach of fiduciary duties and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), among other things. Sawyer says the U.S. attorney's office in Tampa may indict Syling for the new conduct, even though she is already facing criminal charges in Hawaii. Considering the dates of the Citrus lawsuit, the Florida arrest and the Hawaii bench warrant, it seems obvious that Citrus and prosecutors in Florida and Hawaii communicated about Syling and coordinated their activities. "Given the timing of the civil complaint, it seems clear that the HMO waited to file until after Syling's arrest so that she wouldn't know the charges were coming and have an opportunity to flee the country before law enforcement could act," Sawyer says. Citrus, which has 41,000 members, allegedly has its own problems. According to Florida Health News, the HMO is under a state corrective action plan to improve its finances. A lawyer for Citrus didn't return RMC's call requesting comment. Lack of Screening, Internal Controls This tale is about more than an alleged rogue compliance officer. It also raises questions about the lack of oversight and checks and balances at the Citrus HMO and The Queen's Medical Center. Citrus apparently didn't detect that a compliance-officer candidate — someone in a highly trusted, sensitive position - was allegedly lying about basic information (e.g., Social Security number, past employment). "Who was minding the store?" asks Sawyer, who is not involved in this case. "It really speaks to a lack of internal controls." She cautions that health care organizations must "vet their compliance officers very carefully." Having an experienced, credible compliance officer is critically important in helping providers fend off allegations of fraud and abuse, she maintains. This case is a stark reminder of the importance of segregation of compliance from operations. "Obviously, given the responsibility afforded to compliance officers, providers should take special pains to be sure that…there are appropriate checks and balances on all contracts and invoices. That would include compliance officers not having operational responsibilities," says San Francisco attorney William Keane, who is with the law firm Farella, Braun + Martel LLP. "The minute you have compliance officers personally entering into contracts, there is an inherent conflict of interest without a second level of scrutiny. But who is overseeing that?" The risks are higher when compliance is consolidated in one small department, he says. It's essential to keep the compliance officer independent of operations, especially in terms of service or consulting contracts, says Keane, who isn't involved in this case. But he maintains
that background checks in the absence of obvious red flags — a
conviction, a Medicare exclusion — are easier said than done. In
fact, as far as anyone knows, Syling could have had a sterling record
as a compliance officer in the years preceding the allegations. She
also is presumed innocent until proven guilty in a court of law. (Syling
worked in health care administration before her two compliance jobs,
but details were unavailable.) |
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