Kusserow on Compliance: DOJ announces record-breaking $1B Medicare fraud case

The Department of Justice (DOJ) in Miami reported what it called the largest single criminal health care fraud case ever brought against individuals. It involved a $1 billion scheme involving numerous Miami-based health care providers. The DOJ brought charges against the owner of more than 30 Miami-area skilled-nursing and assisted-living facilities, a hospital administrator, and a physician’s assistant. The charges included conspiracy, obstruction, money-laundering and health care fraud. Philip Esformes was named as having been at the top of a complex fraud scheme, along with Odette Barcha, and Arnaldo Carmouze. Using Esformes’ network of Miami-Dade skilled-nursing and assisted-living facilities, the scheme involved filing false Medicare claims over the last 14 years for services that were not necessary or in some instances not provided.

The DOJ reported that the network of skilled nursing homes and assisted living facilities provided access to thousands of Medicare and Medicaid beneficiaries. Many of these individuals did not qualify for skilled nursing home care or for placement in an assisted living facility, but were admitted anyway where they received medically unnecessary services that were billed to Medicare and Medicaid. Charges include allegations that they received kickbacks in order to steer these beneficiaries to other health care providers, who also performed medically unnecessary treatments that were billed to Medicare and Medicaid.

Ten years ago, Esformes paid $15.4 million to resolve civil federal health care fraud claims for unnecessarily admitting patients from his assisted living facilities into a Miami-area hospital. The fraudsters subsequently continued to engage in their fraudulent practices, employing sophisticated money laundering techniques to hide the scheme.

 

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 © 2016 Strategic Management Services, LLC. Published with permission.