All in the family took on a different spin when the Department of Justice, on December 20, 2011, announced the guilty pleas of the Gonzales family to one count of conspiracy to commit health care fraud.

The owners of Nany Home Health Inc., (Nany) a home health agency located in Florida, Roberto Gonzales and his wife Olga as well as their son Fabian, the head of Quality and Assurance Department for Nany conspired with “patient recruiters” for the purpose of billing Medicare for unnecessary home health care and therapy services.  Often the billed for services were never provided.

This type of fraud in the home health care industry appears to have reached epidemic proportions in Florida.  There is hardly a month that goes by in which the Department of Justice announces that yet another home health company  has been found guilty of committing health care fraud.  The majority of cases involve the similar scheme of paying “patient recruiters” kickbacks and bribes for Medicare patient information. The home health agency then uses that information to bill Medicare for unnecessary services or for services that were never provided.  These recruiters often prey on the low income population who often need the money provided for their information just to survive.

In this instant case, Nany had its staff falsify patient files to make it appear that the patients qualified for home health care and therapy services.  From January 2006 through November 2009, the Gonzales and their patient recruiters conspired to bill Medicare approximately 60 million in false and fraudulent claims and Medicare paid approximately 40 million on those claims.

The Medicare Fraud Strike Force continues to demonstrate that their extra vigilance is paying off for Medicare and Medicaid.  But what a cost to the United States’ health care system, because it will be the intended beneficiaries that will ultimate lose due to this rampant fraud.

In the continued prosecution of the mental health company, American Therapeutic Corporation, its management company Medlink Professional Management Group Inc, and various owners, doctors, therapists and other participants to a fraudulent Medicare billing scheme resulting in over $200 million in medically unnecessary services, the Department of Justice,on November 30, 2011, announced that Joseph Williams, owner and operator of Avondale Manors Retirement Home and the Diversified Marketing Group Inc., in Pompano Beach Florida, pled guilty to receiving kickbacks from American Therapeutic Corporation (“ATC”).

In this particular part of the Medicare billing scheme, Mr. Williams received monetary kickbacks from ATC in exchange for delivering patients to ATC to receive “partial hospitalization program services” for which the patients were ineligible to receive.  ATC paid Mr. Williams $30.00 per patient for each day the patient attending ATC.

Mr. Williams also pled guilty to fraudulently billing Medicaid for services allegedly provided at his Avondale Retirement Homes.  Mr Williams paid the owners and operators of halfway houses for Medicaid enrollees’ personal identifier information. Mr. Williams used that information to bill Medicaid for services the patients never received.

Mr. Williams is facing a maximum prison term of ten years and a $250,000 fine for each count.

This week three cases involving the fraudulent billing of Medicare for services or supplies that were never provided illustrate that Medicare Fraud is pervasive nationwide.

In Louisville, Kentucky authorities are tracking down Rodolfo Bouza owner of Newberg Services Inc., for fraudulently billing Medicare for $750,000 for bandages and durable medical equipment that were never produced.  In court documents Bouza’s scheme allegedly started in Miami, Florida and spread nation wide.

In Kittery, Maine Peter Ensinger was convicted for billing Medicare and other insurance companies for products that were never delivered to the patients, billing for more expensive products than the product that was actually delivered, and for continuing to bill for the product after the patient had returned the equipment.

In Humble, Texas Lula Thurman pleaded guilty to bilking Medicare and Medicaid of $483,833 by utilizing special modifier codes established for replacing medical equipment lost or damaged during a catastrophe or disaster such as Hurricane Katrina.  Thurman, owner of LT’s Faith-N-Action provided her customers new wheelchairs utilizing this code even though the customers did not qualify to receive the equipment under that code.

On Tuesday October 11, 2011, the Department of Justice sentenced Mr. Bassey Monday Idiong, of Humble, Texas, to thirty-three months in prison for his role in a Medicare Fraud scheme.

The fraud involved billing  Medicare for expensive orthotics referred to as “arthritis kits” that were medically unnecessary.  Each arthritis kit cost approximately $4,000.  According to the Department of Justice’s press release dated October 12, 2011, court documents showed that Mr. Idiong billed Medicare for two such kits for a beneficiary that only had one leg.

Additionally, Mr. Idiong paid patient recruiters kickbacks in exchange for Medicare beneficiary names for whom Mr. Idiong would submit billing to Medicare.

In total Mr. Idiong, through his company B.I. Medical Supply L.L.C. billed Medicare approximately $846,000 in fraudulent charges.

In addition to Mr. Idiong’s prison term, he was also ordered to pay $527,023 in restitution.

As discussed in previous blogs, the home health industry is blatantly ripping off Medicare to the tune of hundreds of millions of dollars.  The Medicare Fraud Strike Force is slowly making inroads into this area of fraud.  With continued funding, and successful prosecution, this Strike Force may actually decrease the incidence in fraud in this health field industry.

Hill-Rom, a company located in Batesville, Indiana, manufacturers hospital beds.  In particular it produces bed supports designed to treat pressure ulcers and bedsores.  According to the recently settled  qui tam case, over the last decade Hill-Rom has been fraudulently billing Medicare for supplying beds, and bed supports to patients who did not qualify for the use of the medical equipment.  The qui tam case settled for $41.8 million. It represents the largest settlement recovered in the Eastern District of Tennessee.

According to the settlement, Hill-Rom submitted claims to Medicare for patients who did not qualify for the equipment, including patients who had died, patients no longer using the equipment or had been moved to nursing homes.  Hill-Rom provided this equipment nationwide and according to the Department of Justice there were hundreds of thousand of patients involved.  Hill-Rom provided incentives such as gift certificates and large televisions to its sales representatives for boosting sales.  Even though an internal audit in 2003 revealed the billing errors, Hill-Rom did not correct them.

In addition to the large civil monetary settlement, Hill-Rom also entered a Corporate Integrity Agreement with the Department of Justice that will ensure the company five years of close federal scrutiny.

The Medicare Strike Force in Florida is HOT, HOT, HOT!

In another banner week for the Florida Medicare Strike Force, the Department of Justice announced three new prosecutions of Medicare Fraud, totalling approximately $225 million. The three cases noted below not only demonstrate the astonishing monetary amounts prevalent in these health care fraud cases, but also demonstrate a disturbing trend in the perpetration of the fraud:  the recruiting of Medicare beneficiaries through the use of kickbacks and bribes in order to submit false claims.

In the three reported cases, all three schemes included paying Medicare beneficiaries kickback and bribes to obtain said beneficiaries billing information in order to submit claims for services that were either medically unnecessary or never provided.

In the first case reported on Monday September 19, 2011, on the Department of Justice’s (DOJ) website, Marianella Valera, owner of American Therapeutic Corporation, was found guilty of orchestrating a $205 million Medicare Fraud scheme.  Between 2002 and October 2010, Valera and her cohorts submitted false claims for treatment of severe mental illness for patients who did not qualify for such treatment, as such, the treatments were medically unnecessary or not provided.  In addition, as part of the scheme, kickbacks and bribes were paid to Medicare beneficiaries for their billing information in order to submit the false claims for the services that were medically unnecessary or never provided.

In the second case reported on Monday September 19, 2011, on the DOJ’s website, Adrian Chalarca was convicted of Medicare Fraud for submitting false claims between 2009 and 2010 for physical therapy services that were never provided.  As in the trend noted above, Chalarca and his co-conspirators paid kickbacks and bribes to Medicare beneficiaries to obtain their billing information.  They used that billing information to submit claims totaling $757,654 for services that were never provided.

The third case reported September 21, 2011, on the Department of Justice’s website, ten people in Miami conspired to fraudulently bill Medicare for $25 million in home health services.  The ten people worked for ABC Home Health Inc., and Florida Home Health Providers Inc.  In addition to falsifying records for Medicare beneficiaries to make it appear the patients qualified for such services, the ten people paid said beneficiaries kickbacks in order to use their information to bill for services that were either medically unnecessary or never provided.

According to a USA Today article printed on September 2, 2011, government health care fraud prosecution, in the first eight months of 2011, was 85% higher than last year.  This rise is attributed to increased funding and improvements to investigative tools such as the creation of HEAT task force – discussed in previous blogs.

If the first two weeks of September 2011 are an indication, these numbers are going to continue to rise and quickly.  On September 2, there were two reports of Medicare fraud convictions.  The first one out of Miami Florida, where Jasmine Williams of Thirdage.com reported that a Miami area nurse pled guilty to Medicare fraud charges for home health services that were either medically unnecessary or never provided.  Between 2006 and 2009, this nurse, Farah Perez, recruited Medicare beneficiaries who allowed the Florida Home Health Care Providers, Inc. to bill for medicare services.  In exchange for these referrals, Nurse Perez received kickbacks from the home health company.

The second story reported September 2, 2011, comes from Detroit, where Robert Snell of detnews.com reported the prosecution of eighteen people in Detroit for Medicare fraud.  In what appears to be a disturbing trend in health care prosecution – fraudulent billing for home health services – these eighteen people were prosecuted for billing Medicare for home health services that were not medically necessary or even provided.  This particular scheme included billing for psychotherapy services for persons who were dead.

The Medicare Strike Task force, part of HEAT,  announced today, September 8, 2011,  its indictment of 91 people nationwide who fraudulently billed Medicare to the amount of 295 million.  The accused include doctors, nurses and other health care professionals who fraudulently billed for a wide spectrum of medical goods and services including home health care services.  In Houston, Texas two people are responsible for $62 million in false billing for home health care services and durable medical equipment.  In another trend in Medicare fraud, the durable medical equipment equates to wheelchairs.  As in the other two cases mentioned above, these Houstonians are accused of providing Medicare benificiaries’ information to home health service companies in exchange for kickbacks.  The home health service companies then billed Medicare for services that were medically unnecessary or never provided.

As is evident in these three reports of health care fraud, and in other posts from The Healthcare Fraud Blog, fraud is rampant in the home health service industry.  The most common fraudulent billing is for wheelchairs and services that are not medically necessary or were never provided.  Hopefully with continued success and funding the government’s task force will be able to identify fraudulent billing before it reaches the dizzy proportions such as the indictment reported today.

The following report of health care fraud really stretches the boundaries of fraudulent behavior and the belief that the government can self regulate it’s programs to detect such activity.  As reported by Associate Press writer Shayha Mohajer on August 10, 2011, two pastors in the now-defunct Los Angeles church, Arms of Grace Christen Center, abused their congregations trust by using the parishioners’ personal information to defraud Medicare out of 14.2 million dollars.

The pastors used their parishioners’ personal information to establish several fraudulent medical supply businesses.  These businesses billed Medicare for power wheelchairs and other expensive medical devices and equipment.  The two pastors and their co-conspirators used fraudulent prescriptions and other illegally obtained documents to bill Medicare for the medical equipment, which was never needed nor provided to customers.

At the end of the two week trial Christopher Iruke, one pastor was found guilty of one count of conspiracy and seventeen counts of health care fraud.  His wife Connie Ikpoh and another employee were found guilty of of one count of conspiracy and four counts of health care fraud.

Mr. Iruke’s attorney stated that his client didn’t know the prescriptions were fraudulent.  Even if this is true, it does not address what Mr. Iruke thought of using his parishioners’ personal information to set up the medical supply business in the first place. Did he not realize this was illegal?  Did he not stop to think, or even pray about the consequences of using this information to set up these businesses?  He did not have any moral or ethical objections when entering this scheme?  Really what were they thinking?

This news story emphasizes that once again it is not the much maligned beneficiaries, the elderly and poor, of the government sponsored health care programs that are driving these programs into financial ruin.   Rather it is the providers of health care supplies, services, and pharmaceuticals that are taking advantage of a poorly self-audited government program, which allows these persons to bilk the government out of millions of dollars each year.  Perhaps the recent changes the federal government has made over the last year to better detect and stop this type of fraud, as discussed in previous posts, will lessen the opportunity for this type of fraudulent behavior.

On August 4, 2011, federal agents in Houston, Texas arrested a nursing home administrator on allegations that he participated in a scheme that defrauded Medicare and Medicaid of almost $1 million between 2003 and 2007.

For reasons only known to the administrator, Mr. Washington decided to risk his nursing home administrator’s license and career on a kickback scheme that netted him $20, 000 dollars over the four year period.  He now faces a possible criminal fine ten times that amount and fifteen years in prison.

A nursing home administrator is responsible for the overall operations of a nursing home.  The administrator is ultimately responsible for the healthcare and well-being of the resident patients of the nursing home.  The administrator is also responsible for operating the nursing home in accordance with state and federal laws and regulations which includes Medicare and Medicaid.  Accepting money in exchange for referrals is not allowed under Medicare and Medicaid laws.  Neither is billing for services for patients that do not reside at the nursing home.

In apparent disregard for the laws, Mr. Washington allegedly entered an agreement with an ambulance company that involved getting doctors to sign orders for the transportation of dialysis patients residing at the nursing home. The ambulance company billed Medicare and Medicaid for the transportation services and paid Mr. Washington for the continuing referrals.  Not only are the alleged kickbacks for the referrals in violation of Medicare and Medicaid laws; but apparently the patients being transported weren’t even residents of the nursing home making all the submitted claims fraudulent.

Mr. Washington’s and the others’ actions create an impact that reaches far beyond this single nursing home and community.  The cumulative fraud perpetrated nationwide each year costs the Medicare and Medicaid programs an estimated $60 billion a year.  That is money the programs cannot use to carry out the agencies’ missions of providing health care to the poor and elderly in this country.  The continued fraudulent activity results in cuts to the beneficiaries either through a reduced number of people eligible for such services and/or a reduction in available services.  And the resulting costs of these cuts to our society make these needless fraudulent actions that more egregious.

Estimates are that healthcare fraud costs the taxpayers between 60 to 100 billion dollars a year. Regardless the exact cost, the loss is simply too staggering for the federal government to continue to absorb. And continue it does, on Tuesday June 7, 2011 there were three instances of health care fraud reported in the news. The first case was reported from Atlanta, Georgia where a psychologist pleaded guilty to two counts of health care fraud for billing, between July 2007 and October 2009, for counseling services to patients in nursing homes, which he did not actually provide. What makes this case most egregious is the fact that a number of the patients he continually billed for were in fact deceased.

The second case involves the City of Dallas, Texas. The City will pay 2.5 million dollars to settle a case regarding allegations that the City fraudulently billed Medicare and Medicaid for ambulance services provided in response to 911 calls between the years 2006 through 2010. The City allegedly required that all the billing for ambulances dispatched in response to 911 calls be coded at the highest levels of reimbursement regardless of the actual services provided.

Finally, the third case also takes place in Texas. An orthodontist in Amarillo billed for services that he did not provide. Between the years 2008 and 2010, his assistants performed the services that were billed for while he was out of town.

What, if anything, is being done to prevent such fraud, waste and abuse of the government health care systems that results in such exorbitant losses to the taxpayers? In 2009, the Department of Justice and the Department of Health and Human Services, Office of the Inspector General responded by forming the Health Care Fraud Prevention and Enforcement Action Team (HEAT). HEAT is teams of federal investigators whose mission it is to crack down on persons and entities, as mentioned above, from perpetrating fraud against the government health care systems. HEAT’s criminal investigations and resources are in addition to the civil federal qui tam cases and recoveries under the federal False Claims Act. Currently the teams are active in the Baton Rouge, Brooklyn, Detroit, Houston, Los Angeles, Miami-Dade and Tampa Bay areas. With a new mission, adequate funding, and cooperation between local, state and federal health care agencies, the goal is to prevent further fraud from occurring while increasing the amount of monies recovered from existing fraudulent activity.