Kusserow’s Corner: Final Enforcement Highlights for 2013

The Department of Justice (DOJ) closed out 2013 with a number of enforcement actions, many of which were in Florida. It is worth noting that most of these cases involved violations of the Anti-Kickback Statute.


A man pleaded guilty in a $10.5 million Medicare fraud scheme involving a physical and occupational therapy center providing a comprehensive outpatient rehabilitation services that he helped operate. He submitted claims for services not legitimately prescribed or legitimately provided to Medicare beneficiaries. The proceeds were later disbursed to various shell companies and used for, among other purposes, paying kickbacks to obtain Medicare beneficiary identifying information that was used in fraudulent reimbursement claims.

A patient recruiter and a therapy staffing company owner were sentenced to serve 50 months and 46 months in prison, respectively, and ordered to pay $6,928,931 and $1,958,279 in restitution, jointly and severally with their co-defendants, for their participation in a $7 million Medicare fraud scheme involving a defunct home health care company. The company provided expensive physical therapy and home health care services that were medically unnecessary and/or not provided. They negotiated and paid kickbacks and bribes, in return for the recruiters providing patients or home health and therapy services that were medically unnecessary and/or not provided; and assisting in the submission of fraudulent claims. They also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications, and other documentation.

An unlicensed nurse, who fled arrest after conviction for health care fraud for unnecessary or not provided infusion therapy, was captured and was sentenced to serve 108 months in prison for her role in a fraud scheme that resulted in more than $11 million in fraudulent claims to Medicare. She worked at a fraudulent HIV infusion clinic in Miami that was controlled by her cousins, who were also sentenced. Also, her father was sentenced to 70 months for his role in a separate health care fraud conspiracy. Her cousins remain fugitives.

The owner of a home health care company was sentenced after a jury trial to serve 235 months in prison and ordered to pay $6,928,931 in restitution for her participation in a $7 million health care fraud scheme. She paid kickbacks and bribes to patients, negotiated and interacted with patient recruiters, and coordinated and oversaw the submission of fraudulent claims to the Medicare program. She laundered money received from Medicare in order to conceal her financial transactions and generate cash needed to pay kickbacks to patients, patient recruiters, and others to assist her in the scheme. Her company purported to provide home health and expensive physical therapy services to Medicare beneficiaries that were not medically necessary and/or not provided.

A man pleaded guilty in a $10.5 million Medicare fraud scheme involving physical and occupational therapy services. He conspired with others to execute a health care fraud scheme through a comprehensive outpatient rehabilitation facility that he helped operate. The fraud proceeds in that account were later disbursed to various entities that were shell companies for use in paying kickbacks to obtain Medicare beneficiary identifying information.

A licensed mental health counselor pleaded guilty for his role in a $63 million health care fraud scheme. He was a licensed therapist at a mental health facility that purportedly provided Partial Hospitalization Program (PHP) services, a form of intensive treatment for severe mental illness. Personnel at the provider were routinely fabricating patient medical records, many of which were created weeks or months after the patients were admitted for purported treatment and used to support false and fraudulent billing.

New Jersey

A doctor admitted to accepting kickback bribes in exchange for referring patient blood specimens as part of a long-running scheme operated by a laboratory service, its president, and numerous associates. To date, 21 people, 11 employees or associates of BLS and 10 physicians, have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments from Medicare and various private insurance companies.


Two women were ordered to prison for respective terms of 51 and 41 months and restitution of $155,127.72 after pleading guilty to conspiring to submit false and fraudulent bills to the Texas Medicaid Program by wire transmissions as well as wire fraud, while employed by a company. They created phony payroll records from the fraudulent time sheet which they then sent to payroll staff, then obtained the payroll checks generated from the false and fraudulent time records.

A Houston doctor was arrested related to her alleged participation in a $158 million Medicare fraud scheme involving false claims for mental health treatment. She allegedly caused the submission of false and fraudulent claims for Partial Hospitalization Program (PHP), a form of intensive inpatient treatment for severe mental illness, to Medicare through a hospital for services not medically necessary or never provided. In a related matter, an assistant administrator at the hospital was indicted for his role in the scheme and pleaded guilty to conspiracy to commit health care fraud, conspiracy to pay illegal kickbacks, and paying illegal kickbacks. The hospital administrator and several others were also indicted for their roles in the scheme.


A cardiologist and owner of a clinic agreed to pay $1.15 million to resolve False Claims Act allegations that he billed Medicare and Medicaid for medically unnecessary cardiac stent placements. The case was initiated by a qui tam relator who will share in the recovery.


Abbott Laboratories agreed to a settlement of $5.475 million to resolve allegations that it violated the False Claims Act by paying kickbacks to doctors to induce them to implant the company’s products in violation of the Anti-Kickback Statute. They paid prominent physicians for teaching assignments, speaking engagements and conferences with the expectation that these physicians would arrange for the hospitals with which they were affiliated to purchase Abbott’s products. This was a qui tam lawsuit.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2013 Strategic Management Services, LLC. Published with permission.