Kusserow’s Corner: DOJ Report On 2013 Medicare Fraud Strike Force Prosecutions

A short time ago, I wrote a blog article regarding a report from the Department of Justice (DOJ), which collected $8 billion in civil and criminal actions for fiscal year (FY) 2013. The collections included $5.9 billion civil actions; and approximately $2.2 billion for criminal enforcement in restitution, criminal fines and felony assessments. This week, the DOJ criminal side reported on the Medicare Fraud Strike Force results for the same period that achieved a record number of health care prosecutions, as well as fines and penalties in those cases. The DOJ Strike Force includes investigators and prosecutors from the HHS Office of Inspector General (OIG) and the FBI. It targets specific geographic areas showing unusually high levels of Medicare billing in nine cities, including Baton Rouge, La.; Brooklyn, N.Y.; Chicago; Dallas; Detroit; Houston; Los Angeles; Miami; and Tampa, Fla. Indeed, if you look back to enforcement highlights on this blog site, you will see that a majority of major actions have taken place in these locations.

The Strike Force reported filing 137 cases, and charging 345 individuals; it secured 234 guilty pleas and 46 convictions from jury trials. Those charged and sentenced face an average of 52 months in prison. To date, the Strike Force has charged more than 1,700 defendants in fraudulent schemes that billed the Medicare program more than $5.5 billion since its inception in 2007. The Strike Force cases are included in the DOJ report of the total amount collected in criminal actions for health care fraud of $450 million.

The DOJ has begun in the new calendar year with a number of actions in Strike Force cities, including the following:

  • In Brooklyn, NY, a sixth defendant pleaded guilty to conspiracy to pay and receive illegal health care kickbacks in connection with a $13 million health care fraud and money-laundering scheme. He recruited patients with cash kickbacks to attend a clinic using an ambulette licensed by the State’s Medicaid program to transport beneficiaries to and from medical facilities to receive medically unnecessary physical therapy, diagnostic testing, and other services.
  • In Chicago, the owner of a hospice company was charged with federal health care fraud for allegedly engaging in an extensive scheme to obtain higher Medicare and Medicaid payments by fraudulently elevating the level of hospice care for patients, many of whom resided at nursing homes he controlled across the state.
  • In Detroit, a home health agency owner who participated in a Medicare fraud scheme that totaled almost $11 million was found guilty in a jury trial and sentenced to serve 120 months in prison, three years of supervised release, and pay more than $10 million in restitution, jointly and severally with his co-defendants. He and his co-conspirators caused the submission of false and fraudulent claims to Medicare for purportedly providing skilled nursing and physical therapy services to Medicare beneficiaries in the greater Detroit area.
  • In Texas, the owner and operator of two durable medical equipment (DME) companies in Houston was arrested for his alleged role in a $3.4 million Medicare fraud scheme. In another case the owner, operator, and director of nursing of a home health agency in Houston was arrested for her alleged role in a Medicare fraud scheme and a conspiracy to structure bank withdrawals. In a third case, the owner of an ambulance transportation company in McAllen turned himself into federal authorities following the return of a federal indictment alleging a scheme to defraud Medicare and Texas Medicaid through fraudulent billings. In a fourth case, the last of six defendants in a fraud conspiracy was sentenced in Dallas to 72 months in federal prison, and ordered to pay $880,000 in restitution, following his conviction at trial on charges stemming from his involvement in the operation of Euless Healthcare Corporation and Medic Healthcare Incorporated.
  • In Miami, a patient recruiter pleaded guilty connection to her participation in a mental health company involving a $190 million Medicare fraud scheme. In another case, the owner and operator of a medical clinic pleaded guilty in connection with multiple health care fraud schemes involving the defunct clinic.

According to a recent report by the HHS Inspector General, for every dollar the DOJ and HHS have spent fighting health care fraud, they have returned an average of nearly eight dollars to the U.S. Treasury, the Medicare Trust Fund, and others.

The Medicare Fraud Strike Force is part of an unprecedented partnership between the DOJ and HHS called HEAT (Health Care Fraud Prevention and Enforcement Action Team). Formed in May 2009, this partnership brings together high-level leaders from both departments to share information, spot trends, coordinate strategy and strengthen fraud prevention efforts.

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 © 2014 Strategic Management Services, LLC. Published with permission.