Between July 2008, and September 2011, Zahir Yousafzai, co-owner of First Care Home Health, LLC and Moonlite Home Care, Inc,. Dr. Dwight Smith, owner of Smith Medical Center and Phoenix Visiting Physicians PLLC, and owners of Physician Choice Home Health Care, LLC and Quantum Home Care, Inc. billed Medicare for services that were never provided.  Of the $13.8 million fraudulent home health care claims submitted by the four home health agencies, Medicare paid more than $4 million to First Care and Moonlite Home Care.

Mr Yousafzai admitted to paying and/or directing payment to doctors, nurses and other health care providers in order to create fictitious patient files that documented the home health services that were never provided.  Mr. Yousafzai also paid patient recruiters for Medicare beneficiary information in order to use the information to submit claims for services that were not provided.

Dr. Smith’s involvement in the scheme began in September 2009, when he started referring patients to Physicians Choice Home Health Care, LLC and Quantum Home Care, Inc.  Smith owned and controlled Supreme Medical Associates PLLC d/b/a Smith Medical Center.  In May  2010, Dr. Smith incorporated Phoenix Visiting Physician PLLC.  These two entities employed people who were never licensed in Michigan to perform any type of medical services.  Yet these individuals routinely examined patients and referred them for home health services.  These persons referred the ineligible patients to Physician Choice, First Care and Quantum home health agencies.  The patients, who did not qualify for the home health services, were paid to sign patient visit forms but did not receive any of the purported services.  From approximately, September 2009 to September 2011, Medicare paid $6.5 million for the services on claims that were submitted by the home health agencies.

In addition to the Medicare fraud allegations, Mr. Yousafzai also pleaded guilty to money laundering.  He incorporated a shell company, A-1 Nursing and Rehab Inc. for the purpose of laundering the proceeds he gained from Medicare through the submission of the false and fraudulent claims for home health services.

This recent $60 million fraud scheme occurred in Miami, Florida, through the operations of the Nany Home Health Inc. (Nany).  The defendants, Roberto Gonzales, Olga Gonzales and Fabian Gonzales, owners and operators of Nany conspired with Miami area staffing agencies to recruit and provide patients for the purpose of billing Medicare for unnecessary home health care and therapy services.  Kickbacks were paid by the defendants to these patient recruiters and staffing agencies for providing patients, prescriptions, plans of care and certifications for the medically unnecessary services and therapies.

Additionally, the Nany staff and nurses falsified medical records to make it appear that the patients qualified for such services and therapies.  The falsified records contained nursing notes that described non-existent symptoms.  The defendants knew these records were falsified when they submitted the claims to Medicare for reimbursement.

Between January 2006 through November 2009, the defendants fraudulently billed Medicare approximately $60 million in claims and were reimbursed approximately $40 million.  In addition to extremely long prison sentences, each defendant was ordered to pay the $40 million in restitution, jointly and severally with the co-defendants.

The three whistleblowers, Megan Johnson, Leslie Webb and Kimberly Stafford-Payne, former therapists at the now closed facility, alleged that not only was substandard care provided to emotionally troubled youth at the residential center; but false records were created and false claims were submitted to Medicaid for reimbursement.  Universal Health Services, Inc. closed the residential facility in early 2012.

Barry Nash, the owner and operator of Starter House, a halfway house located in Broward County, Florida, was sentenced to 24 months in prison, and three years of supervised release for one count of conspiracy to commit health care fraud.

Mr. Nash admitted that in exchange for kickbacks in the form of monetary payments, he agreed to refer Medicare beneficiaries staying at Starter Home to ATC and ASI.  Mr. Nash admitted that he knew ATC and ASI were fraudulently billing Medicare for partial hospitalization program services and sleep treatment when he made the referrals.  He would deliver the patients to ATC and ASI in exchange for payments. Sometimes the patients received a portion of the kickbacks.

Overall, the Department of Justice estimates that ATC and ASI fraudulently billed Medicare for $200 million in medically unnecessary services.  Mr. Nash’s participation resulted in almost $1 million in fraudulent billing.

The next set of defendants related to this scheme are set for trial April, 9, 2012.

The detection of the fraud that led to the indictment is a result of the new fraud detection tools that the Medicare Fraud Strike Force, a part of the Health Care Fraud Prevention & Enforcement Action Team, now has access.  Utilizing sophisticated data analysis, the Medicare Fraud Strike Force in Dallas, Texas targeted Dr. Roy’s suspicious billing spikes.  The Strike Force’s analysts detected that in 2010, 99 percent of the physicians certified 104 or few patients for home health services, while Dr. Roy certified more than 5,000 patients. Even though the Centers for Medicare and Medicaid Services suspended Dr. Roy’s and Medistat’s Medicare provider billing numbers, all of Medistat’s employees started billing Medicare under MedCare HouseCalls provider number.   Dr. Roy was in charge of the day-to-day operations at MedCare HouseCalls, and as such continued to perpetrate the fraud.

As of now Dr. Roy and his associates are indicted of these allegations, and these defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Turner worked with her co-conspirators at the Family Healthcare Services (FHS) in Houston, Texas.  She recruited Medicare beneficiaries for the purposes of filing Medicare claims under FHS’s Medicare provider number for durable medical equipment.  At trial the medical equipment which include orthotic devices were determined to be medically unnecessary or to have not been provided.

FHS created an “arthritis kit” that contained many of the orthotic devices that were medically unnecessary or never provided.  FHS paid its recruiter kickbacks for the beneficiary referrals.  Additionally, Turner operated a calling center dubbed the “boiler room” wherein she hired teenagers to make unsolicited calls to elderly Medicare beneficiaries asking if they wanted a free arthritis kit.  FHS would then bill Medicare approximately $3,000 for the “free” kit.  Medicare does not allow unsolicited telephone calls.  During trial, these beneficiaries’ doctors testified that their patients did not need the arthritis kits.

Turner faces a total maximum penalty of 25 years in prison for her convictions.

Mr. Khan participated in the scheme beginning in 2008 that caused the submission of fraudulent claims to Medicare for the reimbursement of partial hospitalization program services that were medically unnecessary or never provided.  The total submission of false claims is estimated at 116 million.

The scheme entailed Khan paying kickbacks to owner and operators of group care homes and assisted living facilities and to patient recruiters in exchange for delivering ineligible Medicare beneficiaries to the hospitals’ partial hospitalization program.  Additionally Khan paid the patients kickbacks which, included cigarettes, food and coupons redeemable at the hospital’s stores.  He paid the kickbacks so he could fill the hospital with patients for whom he would then bill Medicare.  This fraudulently billing was for services that were either medically unnecessary or never actually provided.

Khan is facing over 10 years in prison and will be sentenced on May 25, 2012.

Dr. Valdez was found guilty of submitting false claims to Medicare, Medicaid, TRICARE and the Texas Worker’s Compensation Commission between January 2001 and December 2009 for work that was never done or not reimbursable.

The conviction stems from a whistleblower lawsuit filed in 2002 that claimed Valdez’s Institute of Pain Management clinics located in the two Texas cities fraudulently performed injection procedures that were not covered by the government health care programs, but were billing them as procedures that were reimbursable.

Valdez has lost his license to practice medicine, the government has seized most of his property and the court handed down a monetary judgement against Valdez for 9.7 million dollars.

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 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.