Home health owner/operator pleads guilty to Texas-sized Medicaid fraud

Billed as the largest provider attendant services (PAS) fraud in Texas history, the owner/operator of five Houston-area home health agencies pleaded guilty in a $17 million fraud conspiracy case, the last conspirator in the scheme to plead guilty. The owner/operator pleaded guilty to two counts of conspiring to defraud Medicare and the Texas Medicaid-funded home and community-based service and primary home care programs and one count of conspiring to launder money. His sentencing is scheduled for June 22, 2017.

The owner/operator, whose co-conspirators included his daughter and other family members, admitted to the following:

1. obtaining patients for the home health agencies by paying illegal kickbacks to patient recruiters and office employees;
2. paying cash, checks, Western Union, and Moneygram funds to Medicare and Medicaid patients for receiving services from the home health agencies in exchange for using their Medicare and Medicaid numbers to bill for home health and PAS services;
3. paying patients for recruiting other Medicaid and Medicaid patients to the home health agencies;
4. paying physicians illegal kickbacks for referring and certifying Medicare and Medicaid patients for home health and PAS services; and
5. using fraudulently-obtained money from Medicare and Medicaid to pay the illegal kickbacks to promote the conspiracies and to ensure that they would continue.

Over $17 million in fraudulent claims were submitted to Medicare and Medicaid and the conspirators received approximately $16 million in payments from the programs.

Highlight on Florida: Prison for administrator involved in home health Medicare fraud conspiracy

Medicare was scammed of $2.5 million in false and fraudulent claims and another of the conspirators is heading to prison. A home health administrator was sentenced to 126 months in prison for his role in the scheme after a two-week jury trial convicted him in December 2016 of one count of conspiracy to commit health care fraud and wire fraud and one count to defraud the U.S. and pay and receive health care bribes and kickbacks.

While the administrator was the manager of Mercy Home Care Inc. and a billing employee for D&D&D Home Health Care Inc. in Miami-Dade County, Florida, he and others submitted false claims through the companies to Medicare between October 2014 and June 2015, based on services that were (1) not medically necessary, (2) not provided, and (3) for patients brought to the companies through payment of illegal kickbacks to providers and recruiters. The claims the administrator submitted to Medicare were based on forged prescriptions and falsified medical documentation, backdated so services were supposedly provided in prior years, and for beneficiaries who were coached to say they needed services when they were not homebound. According to evidence from trial, he also destroyed evidence prior to his arrest. Medicare paid approximately $2.5 million for false and fraudulent claims submitted by Mercy and D&D&D.

Ten other co-conspirators previously pleaded guilty or were convicted by the Southern District of Florida, including the owner and president of Nerey Professional Services, Inc. That co-conspirator was convicted of one count of receiving kickbacks in connection with a federal health care program and one count of conspiracy to defraud the U.S. and pay health care kickbacks and sentenced to 60 months in prison on May 27, 2016. According to evidence from trial, the co-conspirator was involved in the conspiracy to accept kickbacks in return for referring Medicare beneficiaries to Mercy and D&D&D to serve as patients, even those who did not qualify for home health care services, between October 2014 and September 2015.

$157M compounding pharmacy fraud scheme leads to indictment

Eight individuals who allegedly caused the submission of false claims to Medicare, TRICARE, and private insurance companies are facing an indictment charging them with conspiracy to commit health care fraud and wire fraud, and, in some cases, with money laundering. The Florida residents allegedly used several Tampa Bay- and Miami-area compounding pharmacies to submit false claims for prescription medications from October 2012 through December 2015. Several defendants were arrested on August 9, 2016.

The indictment claims that the eight men used six separate pharmacies to submit $633 million worth of claims for prescription compounded medications and received $157 million in reimbursement. Prescriptions allegedly resulted from illegal kickbacks and bribes and/or were not based on legitimate provider/patient relationships. Some reimbursement claims resulted from the misuse of patient information.

The indictment avers that the claims for reimbursement falsely indicated that the prescription medications contained certain pharmaceutical ingredients. Compounding pharmacies were initially created to prepare special medicines, based on me prescriptions, for individuals with special medical needs; however, large-scale manufacturing of compounded medicines has become increasingly common.

The defendants will make their initial federal court appearances in the Middle and Southern Districts of Florida.

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.