Source- http://www.justice.gov/usao/ma/news/2012/April/HussainMohamedPR.html
BOSTON - Three Boston individuals were charged today in federal court with making false statements to Medicaid, a federal agency, in order to obtain benefits to which they were not entitled.
Mohamed H. Hussain, 55, Abdulkadir H. Mohamed, 53, and Safiya Mohamed, 30, all of Roxbury, were charged in an Indictment with three counts each of Making a False Statement to a Federal Agency and Aiding and Abetting, in violation of 18 U.S.C. § 1001 and 2.
The Indictment alleges that in 2009, 2010, and 2011, the defendants each submitted multiple applications to Medicaid, also known as MassHealth, a health benefits program administered by the Commonwealth of Massachusetts and overseen by the U.S. Department of Health and Human Services, claiming that their incomes met eligibility requirements for the program when, in fact, they had actual incomes significantly in excess of the MassHealth guidelines. These applications contained false and fraudulent statements regarding the defendants’ incomes, and, specifically, that each defendant did not reveal that they were receiving thousands of dollars from Roxsom Home Care, LLC, a home health services provider located in Roxbury. The Indictment further alleges that had MassHealth been advised of the defendants’ true incomes, the applications would not have been approved, and MassHealth would not have provided benefits to the defendants or their families.
If convicted, each defendant faces up to five years in prison, to be followed by three years of supervised release and a $250,000 fine.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/opa/pr/2012/April/12-civ-539.html
McKesson Corporation has agreed to pay the United States more than $190 million to resolve claims that it violated the False Claims Act by reporting inflated pricing information for a large number of prescription drugs, causing Medicaid to overpay for those drugs.
Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division; New Jersey U.S. Attorney Paul J. Fishman; and Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services announced the settlement today.
The government alleges that McKesson, a large drug wholesaler, reported the inflated pricing data to First DataBank (FDB), a publisher of drug prices that are used by most state Medicaid programs to set payment rates for pharmaceuticals.
The Medicaid program is funded jointly by the federal and state governments. This settlement resolves claims based on the federal share of Medicaid overpayments caused by McKesson’s conduct. In addition to the $190 million – which represents the $187 million settlement and interest – state governments can separately negotiate with McKesson to resolve claims based on the states’ shares of the Medicaid overpayments.
The drug pricing data at issue here relates to the “Average Wholesale Price” (AWP) benchmark used by Medicaid and other programs to set payment rates for pharmaceuticals. The settlement announced today is based on the United States’ allegations that McKesson reported inflated mark-up percentages to FDB for a wide variety of brand name drugs, causing FDB to publish inflated AWPs for those drugs.
To date, federal and state governments have recovered more than $2 billion from drug manufacturers that were alleged to have reported inflated AWP information to FDB and other publishers of drug prices.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/usao/ncw/pressreleases/Charlotte-2012-04-25-cook.html
CHARLOTTE, N.C. – An Alleghany Co. woman charged with health care fraud conspiracy and money laundering conspiracy has pled guilty to those charges today, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Unit (MIU); Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region; and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
On March 27, 2012, a criminal bill of information charged Betty Ann Cook, 54, of Sparta, N.C., with one count of health care fraud conspiracy and one count of money laundering conspiracy. According to filed documents and statements made in court, Cook was the owner of Families First Home Health Care, a home health care company located in Alleghany Co., N.C. Cook’s company was enrolled with Medicaid to provide personal care services (“PCS”) such as bathing, dressing, and eating to Medicaid recipients. These types of services are provided by a home health aide in the recipient’s home.
According to filed documents and court proceedings, from about December 2006 to about October 2010, Cook participated in a scheme to defraud Medicaid by submitting false and fraudulent claims to Medicaid seeking reimbursement for patient care services that were either not provided, or not authorized by a physician, or were not based upon a valid in-home eligibility assessment performed by a qualified registered nurse, as required by Medicaid policy. For example, during the relevant time period, Cook and her co-conspirators, which included PCS aides and Medicaid recipients, participated in a “fee-splitting” scheme. The scheme involved billing Medicaid for patient care services that were not rendered and then splitting the fraudulently obtained Medicaid reimbursements among the co-conspirators. As a result of the fee-splitting scheme, Cook received over $150,000 as payment to the fraudulent claims.
In addition to the fee-splitting scheme, Cook also submitted fraudulent claims to Medicaid for patient care services allegedly provided to Medicaid recipients, even though the services were not approved by a physician. Cook copied, altered and falsified physician signatures on forms in order to justify the fraudulent billing. In some instances, Cook altered the forms approving PCS for a Medicaid recipient, despite a physician’s clear denial of such services. Similarly, Cook and her co-conspirators submitted fraudulent claims for PCS based upon false and fraudulent nurse assessments, by forging nurses’ signatures on PCS assessment forms.
In her plea agreement, Cook admitted that as a result of her criminal conduct, the loss amount to Medicaid was between $200,000 to 400,000. The health care fraud conspiracy charge carries a statutory maximum of 10 years in prison and a fine of $250,000. The money laundering conspiracy charge carries a maximum of 20 years in prison and a $500,000 fine or twice the value of the money laundered. Cook has agreed to pay full restitution for her criminal conduct. The restitution amount will be determined by the Court at a later date.
A separate federal criminal bill of information filed in February 2012, charged Cook’s co-conspirator, Crystal Deleon Evans, 33, of Sparta, with one count of health care fraud conspiracy. Evans pled guilty to the charge in March 2012. According to the charging document, from 2007 through 2010, Evans worked as a home health aide for Cook’s home health care company and participated in Cook’s fee-splitting scheme. As part of the scheme, Cook paid Evans to sign blank timesheets. Cook then filled out the timesheets claiming that Evans had provided home health aide services to Medicaid recipients and submitted those timesheets to Medicaid for reimbursement, when, in fact, Evans had never provided such services to the recipients. Evans admitted that Medicaid’s loss as a result of her conduct ranges between $30,000 and $70,000 and has agreed to full pay restitution. Evans faces a maximum sentence of 10 years in prison and a $250,000 fine.
Both Cook and Evans remain free on bond. A sentencing date for the defendants has not been set yet.
In addition to the federal charges, nine other individuals pled guilty in the Allegheny County District Court to misdemeanor charges of conspiracy to commit Medicaid fraud. Those individuals, listed below, all were sentenced to probationary terms.
• Jessica Beth Absher-Shelton, 33, of Anderson, S.C.
• Patricia Atkins, 62, of Low Gap, N.C.
• Billie Jo Bingman, 34, of Sparta, N.C.
• Crystal Brewster, 34, of Sparta, N.C.
• Lisa Marie Cook, 35, of Sparta, N.C.
• Rena Mahan, 32, of Sparta, N.C.
• Desiree Payne, 22, of Sparta, N.C.
• Dwana Sanchez, 36, of Sparta, N.C.
• Tammy Williams, 43, of Laurel Springs, N.C.
The nine pleas to state charges were part of statewide sweep conducted by the N.C. Attorney General’s Medicaid Investigations Unit that resulted in 18 arrests in December 2011.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/usao/flm/press/2012/apr/20120424_DulucHCF.html
Tampa, Florida - United States Attorney Robert E. O'Neill announces the unsealing of a thirty-count indictment charging Luis Duluc (51, formerly of Weston, Florida), and Margarita Grishkoff (57, Charlotte, North Carolina) with conspiracy to commit health care fraud, and additional substantive counts of health care fraud, making false statements related to a health care matter, and aggravated identity theft. If convicted, Duluc and Grishkoff each face a maximum penalty of ten years in federal prison for the conspiracy charge; ten years for each health care fraud charge (19 counts); five years for each false statement charge (6 counts), along with a mandatory minimum term of two years in federal prison for the aggravated identity theft charges (4 counts). The indictment also notifies Duluc and Grishkoff that the United States is seeking a money judgment in the amount of $8,152,262.14, which constitutes the proceeds of their alleged health care fraud conspiracy.
According to the indictment, between June 2005 and April 2008, Duluc and Grishkoff utilized multiple physical therapy clinics to fraudulently bill Medicare for services not rendered to any Medicare beneficiaries. During the time frame of the conspiracy, Duluc and Grishkoff, through their holding company, Ulysses Acquisitions, Inc., purchased three physical therapy clinics in the Middle District of Florida - including: West Coast Rehabilitation, Inc. (Fort Myers); Rehab Dynamics, Inc. (Venice); and Polk Rehabilitation, Inc. (Lake Wales). These clinics were used by Duluc and Grishkoff to fraudulently bill Medicare.
As alleged in the indictment, there were several facets to this conspiracy. First, Duluc and Grishkoff paid patient recruiters to acquire Medicare beneficiary information for purposes of falsely billing Medicare. In addition, upon acquisition of their physical therapy clinics, they also acquired the historical patient records left at the clinic sites, including the names and identification numbers of Medicare beneficiaries. As a part of their scheme to defraud Medicare, Duluc and Grishkoff used this Medicare beneficiary information to fraudulently bill Medicare.
Second, Duluc and Grishkoff allegedly allowed others, who owned and operated similarly illegitimate physical therapy clinics in the Southern and Middle Districts of Florida, to use Duluc’s and Grishkoff’s clinics to submit fraudulent claims for reimbursement to Medicare. This was known by the conspirators as the 80/20 or 85/15 deal. Based on their arrangement, Duluc and Grishkoff accepted bogus patient records and billing forms from the co-conspirator clinics and billed Medicare for services as if they had been provided by Duluc's and Grishkoff's clinics. The Medicare fraud proceeds were generally split 80/20 by the parties, with 80% going to the co-conspirator clinics and 20% being kept by Duluc’s and Grishkoff's clinics.
The indictment alleges that, as a result of Duluc’s and Grishkoff's health care fraud scheme, Medicare paid out approximately $8,152,262.14 for services not rendered.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
McALLEN, Texas - The owner of an area medical supply and diagnostic testing company has pleaded guilty to one count of conspiracy to violate the federal anti-kickback statute, United States Attorney Kenneth Magidson announced today.
Jose “Joe” Trevino, 44, of Weslaco, Texas, pleaded guilty this morning before U.S. District Judge Micaela Alvarez to a one-count criminal information charging conspiracy to violate the anti-kickback statute. The federal anti-kickback statute prohibits individuals and entities from knowingly and willfully paying or offering to pay, as well as soliciting or receiving, remuneration (money or other things of value) in return for the referral of patients for medical services or items which are benefits under a federal health care program, such as Medicare or Medicaid. A violation of the statute is a felony offense.
According to information presented by the United States at today’s hearing, Trevino is the owner of Med-Quick Diagnostics, a medical supply and diagnostic testing facility located in Weslaco, Texas. From approximately September 2009 through April 2011, Trevino authorized thousands of dollars in illegal kickback payments to an area marketer, Alicia Vasquez, in exchange for Vasquez’s referrals of numerous Medicare and Medicaid patients to Med-Quick. Trevino paid the kickbacks to Vasquez through a third-party - referred to in the criminal information as “Person A.” The kickbacks were deposited into Person A’s bank account, from where the money was later diverted to Vasquez. Med-Quick subsequently billed Medicare and Medicaid hundreds of thousands of dollars for patients that were illegally referred by Vasquez.
Vasquez previously pleaded guilty to conspiracy and is awaiting sentencing.
Judge Alvarez has scheduled Trevino’s sentencing for July 25, 2012, at which time, he faces up to five years in federal prison, without parole, and a $250,000 fine.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.fbi.gov/jackson/press-releases/2012/jackson-doctor-nurse-and-businessman-sentenced-for-medicare-kickback-scheme
JACKSON, MS—Lonnie Walker, 63, and Dr. Earnest Rankin, 65, both of Jackson; and Sylvia Redd, 57, of Tallulah, Louisiana, were sentenced today by Senior U.S. District Judge Tom S. Lee for their roles in a scheme to pay kickbacks for the referral of motorized wheelchairs to Medicare beneficiaries, U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Daniel McMullen announced. Walker, a local businessman and former owner of Longwind Products and Services, and Redd, a nurse practitioner, were each sentenced to serve 15 months in federal prison. Dr. Rankin was sentenced to five years of probation. The defendants were ordered to pay restitution in the amount of $997,225.52.
Walker sold motorized wheelchairs from his business Longwind Products and Services. Redd and Rankin received kickbacks from Walker for each Medicare beneficiary who was referred to Longwind with a prescription for a power wheelchair. Some of those referred to Walker were not even eligible to receive wheelchairs. Federal law makes it a crime for any person to give or to accept any type of payment in exchange for referring someone to a health care provider, or for a health care service, if Medicare is involved in the payment for the services.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/opa/pr/2012/April/12-crm-532.html
WASHINGTON – Three operators of a Miami health care agency were sentenced today to 120, 87 and 87 months in prison, respectively, for their participation in a $60 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
U.S. District Judge Ursula Ungaro in Miami sentenced Roberto Gonzalez to 120 months in prison, Olga Gonzalez to 87 months in prison and Fabian Gonzalez to 87 months in prison. Each defendant was also sentenced to three years of supervised release and was ordered to pay $40 million in restitution, jointly and severally with co-defendants.
Roberto, Olga and Fabian Gonzalez each pleaded guilty last year to one count of conspiracy to commit health care fraud.
According to the court documents, Roberto Gonzalez, 61, was the president and Olga Gonzalez, 57, was the vice president of Nany Home Health Inc., a Florida home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries. Fabian Gonzalez, 39, was head of the Quality and Assurance Department for Nany.
According to plea documents, the defendants conspired with patient recruiters, including Miami-area staffing agencies, for the purpose of billing the Medicare program for unnecessary home health care and therapy services. The staffing agencies functioned as patient recruiters and provided patients to Nany. The Gonzalezes and their co-conspirators paid kickbacks and bribes to patient recruiters and the staffing agencies in return for providing patients to Nany, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries.
The Gonzalezes used the prescriptions, POCs and medical certifications to fraudulently bill Medicare for home health care services, which the Gonzalezes knew was in violation of federal criminal laws.
According to court documents, Nany nurses and office staff falsified patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services from Nany when, in fact, the Gonzalezes knew that the beneficiaries did not qualify for and did not receive such services. The nurses and office staff at Nany described in the nursing notes and patient files symptoms that were non-existent. The Gonzalezes knew that these files were falsified so that Medicare could be billed for medically unnecessary services.
From approximately January 2006 through November 2009, Roberto, Olga and Fabian Gonzalez, and their co-conspirators submitted approximately $60 million in false and fraudulent claims to Medicare, and Medicare paid approximately $40 million on those claims.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.fbi.gov/neworleans/press-releases/2012/metairie-doctor-sentenced-for-receiving-materials-depicting-the-sexual-exploitation-of-minors-and-health-care-fraud
NEW ORLEANS—Dan Joachim, M.D., age 52, a resident of Metairie, Louisiana, was sentenced today to serve six years in prison before U.S. District Judge Martin L.C. Feldman after previously pleading guilty as charged to receiving materials involving the sexual exploitation of minors and health care fraud, announced U.S. Attorney Jim Letten. Joachim was further ordered to repay $5,000 in restitution and sentenced to five years of supervised release after his term of imprisonment ends. Physicians Analytical Services Inc. (PAS) a Maryland corporation that pleaded guilty to the same count of health care fraud, was sentenced to repay $500,000 in restitution and was also placed on one year of probation.
According to court documents, Joachim used multiple computers connected to the Internet to search for and download images of child pornography on a variety of websites. A forensic search of one such computer revealed that Joachim downloaded from the Internet and stored approximately 152 images and five videos of children as young as six months old being forced to engage in a variety of sexual activity with adults and animals. Joachim organized the images in folders he created on his computer.
Additionally, beginning in or about 2004, and continuing until in or about April 2010, Joachim worked as the Medical Director of a Maryland company called Intra-Op Monitoring Services Inc. (IOM). IOM employed physicians to remotely monitor, through the use of an Internet connection, neurophysiological surgical procedures performed at hospital and surgical suites. An IOM-employed technician, meanwhile, was present in the operating suite to communicate with the telemonitoring physician. For the telemonitoring of a surgery to be legitimately billed, the in-suite technician had to be in contact with a physician, and the physician had to be available in real time to interpret the data via the web-based interface. Further, the monitoring physician had to be able, in real time, to convey the interpretation to the technician, who could relay the information to the surgeon. In addition to his responsibilities as Medical Director, Joachim also was supposed to monitor surgeries. PAS was a wholly owned subsidiary of IOM and was responsible for billing-related matters.
PAS fraudulently billed various health care benefit programs for monitoring services that IOM-employed physicians did not provide and routinely overbilled for those monitoring services that were provided. In particular, PAS and other billing companies billed for telemonitoring services that did not occur. Often, the connection did not exist between the technician and the monitoring physician. Other times, technical difficulties prevented the physician from monitoring most, or all, of the surgery. Additionally, PAS non-physicians would log onto the monitoring software using a physician’s log-in information, including the log-in information of Joachim, and pretend to be a physician and monitor surgeries in the place of physicians.
PAS also regularly upcoded the billing by representing that surgeries were being monitored for longer periods of time than the CPT codes permitted. For example, CPT codes provided for bills to be submitted for monitoring that took place between the time at which an electrophysiologic “baseline” was established and the ”closing” of the surgery. PAS, however, would routinely bill time spent prior to the establishment of a baseline, such as introducing the patient’s history to the monitoring physician or after the closing.
When insurers denied PAS’s requests for payment, the company routinely appealed those denials. In doing so, PAS frequently claimed that the rejection of the claim was “inappropriate and unjust,” even though PAS was well aware that the claims submitted were false and fraudulent in that they represented that the surgeries had been monitored in real-time by physicians employed by IOM, when PAS well knew that the surgeries had not been so monitored.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.fbi.gov/neworleans/press-releases/2012/former-employee-of-physician-pleads-guilty-to-health-care-fraud
NEW ORLEANS—Jacqueline Evans Segura, age 41, a resident of Mandeville, Louisiana, pleaded guilty to a one-count bill of information for health care fraud, announced U.S. Attorney Jim Letten.
Segura was employed as an office manager at a medical practice in Covington, Louisiana, owned and operated by a local plastic surgeon and a general surgeon. The bill of information charged that Segura used the online payroll system of the clinic to deposit unauthorized paychecks into her account, that she routinely kept cash payments instead of depositing them into the account of the clinic, that she added unauthorized telephone lines to the clinic’s mobile phone service account for her personal use, and that she used the physicians’ personal credit card to make unauthorized telephone and online purchases for her personal use.
Segura faces a maximum term of imprisonment of 10 years, a fine of $250,000, and three years of supervised release following any term of imprisonment. Sentencing is set for July 26, 2012.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.fbi.gov/washingtondc/press-releases/2012/medicare-recipient-sentenced-for-health-care-fraud
WASHINGTON—Walt R. Wilson, 42, of Washington, D.C., was sentenced today to six months of home detention after earlier pleading guilty to a charge of health care fraud stemming from a scheme involving more than $71,000 in fraudulent Medicare payments.
The sentence was announced by U.S. Attorney Ronald C. Machen, Jr.; Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) for the region including the District of Columbia; and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
Wilson pled guilty in December 2011 before the Honorable James E. Boasberg in the U.S. District Court for the District of Columbia. He agreed to forfeit $71,000 of fraudulently obtained funds. In addition to home detention, Wilson will be placed on three years of probation.
According to the indictment and statement of offense, from about March 2010 to October 2011, Wilson submitted claim forms with forged prescription receipt labels falsely stating that he paid money out-of-pocket for drugs and medicines and was thereby entitled to reimbursement from Medicare. He submitted at least 14 claims seeking reimbursements for prescription drug expenses purportedly paid by him. He attached to these claims forms more than 90 prescription receipts, all but one of which were false and forged. These receipts had been altered to change the amount paid by him from nothing or negligible amounts to hundreds or thousands of dollars.
As a result of the forged prescription receipts and false claims, Wilson fraudulently caused Medicare to pay him more than $71,000 and sought to receive through his false claims more than $98,000.
Within a week after Wilson’s arrest, arraignment, and release pending trial, Wilson received and cashed another Medicare reimbursement check which he had fraudulently requested in the same manner as the indicted checks. This post-indictment check came about from Wilson’s submission of another false reimbursement attaching multiple forged prescriptions.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/opa/pr/2012/April/12-civ-497.html
American pharmaceutical company Merck, Sharp & Dohme was sentenced by U.S. District Court Judge Patti B. Saris in Boston to pay a criminal fine in the amount of $321,636,000 in connection with its guilty plea related to its promotion and marketing of the painkiller Vioxx (rofecoxib), the Justice Department announced today. In December 2011, Merck pleaded guilty to violating the Food, Drug and Cosmetic Act (FDCA) for introducing a misbranded drug, Vioxx, into interstate commerce.
Merck’s guilty plea was part of a global resolution involving its illegal promotional activity. In November 2011, Merck entered into a civil settlement agreement under which it will pay $628,364,000 to resolve additional allegations regarding off-label marketing of Vioxx and false statements about the drug’s cardiovascular safety. Of the total civil settlement, $426,389,000 will be recovered by the United States, and the remaining share of $201,975,000 will be distributed to the participating Medicaid states. The settlement and today’s sentencing conclude a long-running investigation of Merck’s promotion of Vioxx, which was withdrawn from the marketplace in September 2004.
Merck’s criminal plea related to the misbranding of Vioxx by promoting the drug for treating rheumatoid arthritis, before that use was approved by the Food and Drug Administration (FDA). Under the provisions of the FDCA, a company is required to specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – any use not specified in an application and approved by FDA – unless the company applies to the FDA for approval of the additional use. The FDA approved Vioxx for three indications in May 1999, but did not approve its use for rheumatoid arthritis until April 2002. In the interim, for nearly three years, Merck promoted Vioxx for rheumatoid arthritis, conduct for which it was admonished in an FDA warning letter issued in September 2001.
At today’s sentencing, Judge Saris said in substance that off label promotion has been a big problem, she has seen a barrage of off-label marketing cases, and that she hoped that the size of today’s settlement and the fact that the government continues to press these cases will send a signal to the industry that this is not acceptable conduct.
The parallel civil settlement covered a broader range of allegedly illegal conduct by Merck. The settlement resolved allegations that Merck representatives made inaccurate, unsupported, or misleading statements about Vioxx’s cardiovascular safety in order to increase sales of the drug, resulting in payments by the federal government. It also resolved allegations that Merck made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx, and that those agencies relied on Merck’s false claims in making payment decisions about the drug. Finally, like the criminal plea, the civil settlement also recovered damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.
"The United States will not tolerate unlawful conduct by pharmaceutical companies," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department's Civil Division. "As the court's sentence makes clear, those who put profits before patient safety by promoting their products for unapproved uses will be prosecuted and held accountable."
“We are pleased to see this case brought to a conclusion with the recovery of over three hundred million dollars in criminal fines, and a total of almost a billion dollars in combined civil and criminal penalties. The severity of these criminal and civil sanctions should serve as a reminder of this Office, and this department’s unwavering commitment to holding drug companies fully accountable for failures to comply with their public safety and marketing obligations, and to recovering taxpayer funds that have gone towards the purchase of illegally marketed products,” announced Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts. “Any marketing activity that ignores the importance of FDA approval, or that makes unsupported safety claims about a drug is unacceptable, and will be pursued vigorously in both the criminal and civil arena.”
As part of the settlement, Merck also agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of the Department of Health and
Human Services (HHS-OIG), which will strengthen the system of reviews and oversight procedures imposed on the company. Although Vioxx is no longer on the market, this ongoing monitoring of Merck’s conduct is aimed to deter and detect similar conduct in the future.
“If all pharmaceutical manufacturers complied with the law, there would be no need for law enforcement actions,” said Susan Waddell, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “But until they stop abusing the health care system and putting profits ahead of patient safety, OIG will continue to vigorously pursue corporations that flout the law.”
“Today’s announcement demonstrates the commitment of FDA's Office of Criminal Investigations to pursue investigations of companies that disregard their regulatory obligations and place profits over the public’s health,” said Mark Dragonetti, Special Agent in Charge for the New York Field Office. “We commend the hard work of the U.S. Attorney's Office and our law enforcement counterparts in bringing about this result.”
“In 2004, the FBI began participating in a seven year investigation that led to Merck's decision to plead guilty to a criminal violation of federal law related to its promotion and marketing of Vioxx and to pay nearly a billion dollars in a criminal fine and civil damages,” said Richard DesLauriers, Special Agent in Charge of the FBI in Boston. “Merck now knows that no corporation is immune from being held accountable for criminal and civil violations of law and also knows why the FBI, its federal law enforcement partners, and the U.S. Attorney's Office have earned a national reputation for leading the government’s effort to detect, deter and prevent health care fraud.”
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
WASHINGTON – The owner of a Detroit medical clinic pleaded guilty today for his participation in a Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Juan Villa, 29, of Miami, pleaded guilty before U.S. District Judge Arthur J. Tarnow in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, Villa faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to the plea documents, Villa owned Blessed Medical Clinic in Livonia, Mich. Villa admitted that he hired patient recruiters who paid cash bribes to Medicare beneficiaries to attend the clinic and provide their Medicare numbers and other information. Villa admitted that he used the beneficiary information to bill for medically unnecessary diagnostic tests and treatments. According to court documents, Blessed Medical Clinic fraudulently billed Medicare $2.4 million during the course of the scheme.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case is being prosecuted by Assistant U.S. Attorneys Frances Lee Carlson and Philip A. Ross of the Eastern District of Michigan, with assistance from Assistant Chief Gejaa T. Gobena of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/opa/pr/2012/March/12-crm-383.html
WASHINGTON – A Detroit-area doctor of podiatric medicine was sentenced today to one year in prison for a fraud scheme involving false billings to Medicare, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Dr. Errol Sherman was sentenced by U.S. District Judge Gerald E. Rosen in Detroit. In addition to his prison term, Sherman was sentenced to three years of supervised release and ordered to pay $300,000 in restitution. Sherman pleaded guilty on Nov. 22, 2011, to one count of health care fraud.
According to the plea documents, Sherman is a doctor of podiatric medicine licensed in the state of Michigan. Between January 2003 and December 2006, Sherman billed Medicare and Blue Cross Blue Shield of Michigan for a procedure known as an avulsion of the nail plate or nail avulsion procedure. Sherman billed for this procedure thousands of times, claiming that he had performed this procedure on hundreds of beneficiaries from 2003 through 2006. In fact, he had not performed the procedures billed.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/opa/pr/2012/March/12-crm-373.html
WASHINGTON – Biomet Inc. has entered into a deferred prosecution agreement with the Department of Justice to resolve improper payments by the company and its subsidiaries in violation of the Foreign Corrupt Practices Act (FCPA), announced the Justice Department’s Criminal Division.
The matter is part of an investigation into bribery by medical device companies of health care providers and administrators employed by government institutions. Previously, Johnson & Johnson and Smith & Nephew Inc. have agreed to pay criminal penalties and entered into deferred prosecution agreements related to the ongoing investigation.
Biomet, headquartered in Warsaw, Ind., manufactures and sells medical devices worldwide and is listed on the NASDAQ. According to the criminal information filed today in U.S. District Court in the District of Columbia in connection with the agreement, Biomet, its subsidiaries, employees and agents made various improper payments from approximately 2000 to 2008 to publicly-employed health care providers in Argentina, Brazil and China to secure lucrative business with hospitals. During this time, more than $1.5 million in direct and indirect corrupt payments were made. In addition, at the end of each fiscal year, Biomet, its executives, employees and agents falsely recorded the payments on its books and records as “commissions,” “royalties,” “consulting fees” and “scientific incentives” to conceal the true nature of the payments.
As part of the agreement, Biomet will pay a $17.28 million criminal penalty and is required to implement rigorous internal controls, cooperate fully with the department and retain a compliance monitor for 18 months. The agreement recognizes Biomet’s cooperation with the department’s investigation; thorough and wide-reaching self-investigation of the underlying conduct; and the remedial efforts and compliance improvements undertaken by the company. In addition, Biomet received a reduction in its penalty as a result of its cooperation in the ongoing investigation of other companies and individuals.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/opa/pr/2012/April/12-civ-474.html
AmMed Direct LLC has agreed to pay the United States and the state of Tennessee $18 million plus interest to settle allegations that it submitted false claims to Medicare and Tennessee Medicaid (TennCare), the Justice Department announced today. Under the agreement, AmMed will pay $17,560,997 to the United States and $439,003 to Tennessee.
The United States and Tennessee allege that, from September 2008 through January 2010, the Antioch, Tenn.-based company submitted false claims to Medicare and TennCare for diabetes testing supplies, vacuum erection devices and heating pads. The United States and Tennessee asserted that AmMed widely advertised free cookbooks in order to induce Medicare beneficiaries to contact AmMed or its hired telemarketing firm. Once AmMed confirmed that a beneficiary was covered by Medicare, AmMed representatives improperly attempted to sell the beneficiary supplies that would be paid for by Medicare. Medicare rules prohibit medical businesses from making unsolicited telephone contact with beneficiaries to sell them their products, unless specific exceptions apply.
The United States and Tennessee further alleged that, as a result of AmMed’s improper marketing, many Medicare beneficiaries who called AmMed to receive the advertised free cookbooks returned their diabetic supplies to AmMed. AmMed, however, failed to timely refund the money to Medicare or TennCare. Rather, AmMed allowed the unpaid refunds to accrue from September 2006 until January 2010. Prior to learning of the United States’ and Tennessee’s investigation, AmMed disclosed to the Medicare Administrative Contractors its failure to refund monies for returned supplies and began paying the refunds to Medicare and TennCare.
“Government health care programs have in place important rules that prohibit suppliers from improperly contacting beneficiaries regarding their products,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that companies that bill government health care programs abide by those rules.”
“Enforcement of the False Claims Act remains a top priority of this office,” said Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee. “All Medicare providers must comply with Medicare rules for reimbursement. The U.S. Attorney’s Office for the Middle District of Tennessee will continue to devote the resources necessary to vigorously protect taxpayers’ interests and aggressively pursue fraud and abuse.”
“We are grateful for the hard work and cooperation of our state and federal agencies in this case,” said Tennessee Attorney General Bob Cooper. “Working to stop healthcare fraud is a major priority for all of us because ultimately everyone pays for this kind of theft.”
The allegations arose from a lawsuit brought under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of false claims against the government to bring an action on behalf of the United States and to share in any recovery. The qui tam action was filed in 2009 in federal district court in Nashville, Tenn., by former AmMed Direct employee Bryan McNeese. The relator will receive approximately $2.88 million as his share of the settlement proceeds.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/opa/pr/2012/April/12-civ-446.html
Tenet Healthcare Corporation has agreed to pay the United States $42.75 million to settle allegations that it violated the False Claims Act by overbilling the federal Medicare program, the Justice Department announced today.
The settlement resolves allegations pertaining to the various inpatient rehabilitation facilities (IRFs) that Dallas-based Tenet has owned and operated throughout the country. IRFs are designed for patients who need an intense rehabilitation program that requires a multidisciplinary, coordinated team approach to improve their ability to function. Because the patients treated at these facilities require more intensive rehabilitation therapy and closer medical supervision than is provided in other settings, such as acute care hospitals or skilled nursing facilities, Medicare generally pays IRFs at a higher rate for rehabilitation care than it pays for such care in other settings.
The Justice Department alleged that, between May 15, 2005, and Dec. 31, 2007, Tenet improperly billed Medicare for the treatment of patients at its IRFs when, in fact, these patient stays did not meet the standards to qualify for an IRF admission. Today’s settlement is the United States’ single largest recovery pertaining to inappropriate admissions to IRFs.
“The Department of Justice is committed to protecting the Medicare program against all types of overcharging by health care providers,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department's Civil Division. “As today's settlement demonstrates, inpatient rehabilitation facilities will not be permitted to bill Medicare for patients who were not qualified for admission.”
“This settlement demonstrates our office’s continued commitment to protect crucial Medicare dollars from fraud and abuse. Inpatient rehabilitation facilities are expensive, and Medicare dollars should be reserved for patients who need the services–not for hospitals seeking to make money through improper billing,” said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia.
“Tenet disclosed this matter to my office as required under its corporate integrity agreement (CIA),” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “Our CIA reporting provisions have resulted in recovery of millions of taxpayer dollars back into the Medicare program.”
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/usao/ma/news/2012/April/GuerrieriThomasPleaPR.html
BOSTON - The former vice-president of a medical device company was convicted today in federal court with violating the Anti-Kickback law.
Thomas P. Guerrieri, 51, of Youngstown, Ohio, pleaded guilty in federal court before U.S. District Judge Rya W. Zobel for violating the Anti-Kickback statute. Guerrieri was the former vice-president of sales at a medical device company that sold bone growth stimulators. His sentencing is scheduled for July 11, 2012 at 2:30 p.m. He faces up to five years in prison, to be followed by three years of supervised release, a $250,000 fine and forfeiture.
Had the case proceeded to trial, the Government would have proven that Guerrieri facilitated signing up a surgeon in New York to a “consulting” agreement with the company to induce the surgeon to prescribe the company’s bone growth stimulators. The surgeon was paid tens of thousands of dollars by the company, but provided little or no consulting services in return. The surgeon was supposed to document his services in time sheets provided to the company, but for years he did not fill out these forms or provide any legitimate consulting services, even though he was paid every month.
In or about Aug. 2007, the surgeon became concerned about increased government scrutiny of consulting arrangements such as his. The surgeon, Guerrieri, and a territory manager for the company decided to create and backdate time sheets going back to 2006 to make it appear as though the surgeon filled out these forms contemporaneously and performed legitimate consulting services. In addition, at the surgeon’s request, Guerrieri and the territory manager obtained a letter from the company’s general counsel indicating that the surgeon was compliant under his consulting agreement, which was not true. Guerrieri did these things to induce the surgeon to continue to order bone growth stimulators from the company.
In addition, Guerrieri and others executed a scheme to pay Michael Cobb, a RI physician’s assistant, for each bone growth stimulator ordered by Cobb. The surgeon had delegated to Cobb the choice of which stimulator his patients received. For years, the device company paid Cobb $50-$100 for each stimulator that his surgeon prescribed. In Sept. 2008, the device company issued a policy expressly prohibiting any payments to anyone who works for a surgeon that prescribes the company’s products. Guerrieri and others were concerned that if they could no longer pay Cobb under the new policy, the company might lose Cobb’s business. Thus, Guerrieri, and others, devised a scheme where Cobb continued to be paid for each order, but the payments were made by a vendor of the device company, making it more difficult to trace the paper trail back to the device company. Cobb is also charged with violating the Anti-Kickback law. His plea hearing is set for April 19, 2012 at 3:15 p.m. before Judge George A. O’Toole, Jr.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/usao/nj/Press/files/Stein,%20Dr.%20Michael%20Sentencing%20News%20Release.html
NEWARK, N.J. – A North Caldwell, N.J., doctor was sentenced today to 24 months in prison for his role in defrauding Blue Cross Blue Shield of more than $725,000 by submitting false claims for services he never performed, U.S. Attorney Paul J. Fishman announced.
Dr. Michael P. Stein, 63, previously pleaded guilty before U.S. District Judge Esther Salas to an Information charging him with one count of defrauding Blue Cross Blue Shield by filing false claims for services that were not rendered and office visits that did not occur. Judge Salas also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Between August 2004 and September 2010 Stein was the owner and operator of Randolph Otolaryngology P.C., a medical treatment facility. Stein treated a patient with the initials J.F. for nasal problems and billed Blue Cross Blue Shield for the services he purportedly performed.
Stein admitted he filed fraudulent claims with Blue Cross Blue Shield for medical procedures that were not performed during office visits. Stein submitted claims for approximately 900 nasal endoscopies he purportedly conducted on the patient, when only a few were actually performed. Stein also admitted he filed fraudulent claims for office visits and medical procedures that purportedly occurred while he was away on vacation. Between Sept. 6, 2010, and Sept. 27, 2010, Stein billed Blue Cross Blue Shield for 11 nasal endoscopies and 10 office outpatient visits for purported services rendered to J.F. In truth, J.F. ceased seeing Stein around Sept. 3, 2010, and Stein was in Germany from Sept. 11, 2010 through Sept. 27, 2010. Stein received $725,156.45 from Blue Cross Blue Shield as a result of his submission of the false claims, and, under the plea agreement, agreed to pay restitution and forfeiture in the same amount.
In addition to the prison term, Judge Salas sentenced Stein to three years of supervised release and ordered him to forfeit $725,156.45 and pay restitution of $725,156.45. He has also surrendered his medical license.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.fbi.gov/miami/press-releases/2012/miami-area-assisted-living-facility-owner-pleads-guilty-to-fraud-and-kickback-scheme
WASHINGTON—The owner of a Miami-area assisted living facility pleaded guilty yesterday for her role in a kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), announced the Department of Justice, FBI, and Department of Health and Human Services (HHS).
Billy Denica, 50, pleaded guilty before U.S. District Judge Joan A. Lenard in Miami to one count of conspiracy to commit health care fraud. Denica was the owner of an assisted living facility called Robyll Care Assisted Living Facility.
According to court documents, Denica agreed to send Medicare beneficiaries who resided at Robyll to ATC for mental health treatment called partial hospitalization program (PHP) services in exchange for illegal health care kickbacks. ATC purported to operate PHPs in seven different locations throughout south Florida and Orlando. According to court documents, Denica admitted that she knew ATC fraudulently billed Medicare for the PHP treatment that her referrals purportedly received at ATC. Denica was aware that some of the Robyll residents would be offered gifts such as money, cigarettes, and candy, so that they would agree to be admitted to a hospital for purposes of later attending ATC. She also admitted that she referred her residents to ATC simply because they had Medicare, because she would receive a cash kickback, and because they were willing to go.
According to the plea agreement, Denica’s participation in the fraud resulted in more than $1.1 million in fraudulent billing to the Medicare program. At sentencing, scheduled for June 11, 2012, Denica faces a maximum of 10 years in prison and a $250,000 fine.
ATC, its management company Medlink Professional Management Group Inc., a related company called American Sleep Institute (ASI), and various owners, managers, doctors, therapists, patient brokers, and marketers of ATC and Medlink and ASI were charged with various health care fraud, kickback, money laundering, and other offenses in two indictments unsealed on February 15, 2011. ATC, Medlink, and 14 of the individual defendants have pleaded guilty or have been convicted at trial. Seven other defendants are scheduled for trial April 9, 2012 before U.S. District Judge Patricia A. Seitz, and one defendant’s trial has been deferred until after June 2012. A defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.fbi.gov/detroit/press-releases/2012/detroit-medical-clinic-owner-pleads-guilty-to-medicare-fraud-scheme
WASHINGTON—The owner of a Detroit medical clinic pleaded guilty today for his participation in a Medicare fraud scheme, announced the Department of Justice, the FBI, and the Department of Health and Human Services (HHS).
Juan Villa, 29, of Miami, pleaded guilty before U.S. District Judge Arthur J. Tarnow in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, Villa faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to the plea documents, Villa owned Blessed Medical Clinic in Livonia, Michigan. Villa admitted that he hired patient recruiters who paid cash bribes to Medicare beneficiaries to attend the clinic and provide their Medicare numbers and other information. Villa admitted that he used the beneficiary information to bill for medically unnecessary diagnostic tests and treatments. According to court documents, Blessed Medical Clinic fraudulently billed Medicare $2.4 million during the course of the scheme.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh, III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
Source- http://www.justice.gov/usao/gan/press/2012/04-03-12.html
ROME, GA – GEORGE DAYLN HOUSER, 63, of Atlanta, has been convicted on charges of conspiring with his wife to defraud the Medicare and Medicaid programs by billing them for “worthless services” in the operation of three deficient nursing homes between July 2004 and September 2007. Medicare and Medicaid paid HOUSER more than $32.9 million during that time for food, medical care, and other services for nursing home residents that he either did not provide, or that were so deficient that they were worthless. This is the first time that a defendant has been convicted after a trial in federal court for submitting claims for payment for worthless services.
HOUSER was convicted by United States District Judge Harold L. Murphy, who issued an order with findings of fact and conclusions of law on Monday, April 2, 2012. HOUSER had requested a bench trial, which Judge Murphy conducted from January 30, 2012, through February 28, 2012. In addition to the health care fraud count, HOUSER was also convicted of eight counts of failing to pay over $800,000 in his nursing home employees' payroll taxes to the IRS, and failing to file personal income tax returns in 2004 and 2005.
“It almost defies the imagination to believe that someone would use millions of dollars in Medicare and Medicaid money to buy real estate for hotels and a house while his elderly and defenseless nursing home residents went hungry and lived in filth and mold,” said United States Attorney Sally Quillian Yates. “We will continue to aggressively protect our most vulnerable citizens and hold accountable those who prey on the elderly and steal precious healthcare dollars.”
Brian D. Lamkin, Special Agent in Charge, FBI Atlanta Field Office, stated: “While the FBI works tirelessly to protect the federally funded Medicare and Medicaid programs from abuse, we are also working hard to protect those that these much needed healthcare programs were intended to serve. The Housers' actions have left an indelible mark on all of those individuals who assisted in bringing this matter forward. The level of greed and lack of compassion for others that was seen in this case reflect the very reason that the FBI, in working with its many and varied law enforcement partners, dedicates vast investigative resources in combating healthcare fraud.”
“To see nursing homes residents subjected to such horrendous conditions, while Mr. Houser used Medicare and Medicaid funds as his personal piggy bank, is a travesty,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General for the Atlanta region. “The Office of Inspector General and our law enforcement partners will aggressively investigate then bring these criminals to justice.”
“The guilty verdict in this case is an important victory for the American taxpayer,” said Rodney E. Clarke, IRS Criminal Investigation Special Agent in Charge. “The IRS, along with our law enforcement partners, will vigorously pursue individuals who victimize the less fortunate in our society while holding positions of trust. I believe justice has been served in this case and the defendant will now be held accountable for his actions.”
According to United States Attorney Yates, the charges and other information presented in court, or contained in Judge Murphy’s findings of fact and conclusions of law: HOUSER and his wife ran two nursing homes in Rome, Georgia between July 2004 and July 2007, known as Mount Berry and Moran Lake. Each home had approximately 100 residents. They also ran a home known as Wildwood in Brunswick, Georgia from September 2004 until September 2007, and it had the capacity for 204 residents. Between July 2004 and September 2007, HOUSER billed Medicare and Medicaid approximately $39.4 million, and they paid him $32.9 million – based on his certifications and promises that he was providing the residents with a safe, clean physical environment, nutritional meals, medical care, and services that would promote or enhance the residents’ quality of life.
In sharp contrast to the pretenses under which HOUSER accepted Medicare and Medicaid payments, the Court concluded that the evidence showed “a long-term pattern and practice of conditions at Defendant’s nursing homes that were so poor, including food shortages bordering on starvation, leaking roofs, virtually no nursing or housekeeping supplies, poor sanitary conditions, major staff shortages, and safety concerns, that, in essence, any services that Defendant actually provided were of no value to the residents.” The Court further found that “the supposed ‘care’ Defendant provided to residents during the relevant time period was so deficient that the bundle of services had no medical value.”
During the trial, the government introduced evidence that instead of providing sufficient care for the nursing home residents, HOUSER diverted slightly more than $8 million of Medicare and Medicaid funds to his personal use. HOUSER spent more than $4.2 million on real estate for a hotel complex that he planned to build in Rome, and he also had plans to develop hotels in Atlanta and Brunswick. HOUSER also bought his ex-wife a house in Atlanta for $1.4 million, and instead of paying her alimony, he paid her a salary as a nursing home employee, though she never worked at any of the homes. HOUSER also used the nursing homes' corporate bank accounts for personal expenses, such as Mercedes-Benz automobiles, furniture, and vacations.
The trial evidence showed several examples of the deficiencies at HOUSER'S nursing homes, including:
Inadequate staffing: HOUSER failed to maintain a nursing staff that was sufficient to take proper care of the residents. Staffing shortages started plaguing the homes after HOUSER started writing bad paychecks to his employees, which resulted in numerous staff resignations. HOUSER also withheld health insurance premiums from his employees, but let the insurance lapse for non-payment, leaving many employees with large unpaid medical bills for surgery and treatment. The payroll and insurance problems, and unpaid garnishments, prompted many employees to seek work elsewhere and discouraged new applicants.
Inadequate Physical Environments: The roofs in two homes were so leaky that employees used 55-gallon barrels and plastic sheeting to catch and divert the rainwater. The leaks worsened over time, but HOUSER never replaced the roofs, nor did he repair or replace broken air conditioning and heating units. Fiberglass ceiling tiles would become saturated with water until they fell out of the ceiling, occasionally on residents’ beds. The residents kept their windows open to vent the foul odors in the homes, but flies, other insects, and rodents easily entered the homes through ill-fitting screens and doors. The insect problems were aggravated by mounds of rotting garbage, which piled up around the dumpsters near the homes because HOUSER failed to pay the trash collection services. The moisture and inability to control the humidity in the homes gave rise to rampant mold and mildew growth.
Failure to pay vendors: The Medicare and Medicaid programs require nursing homes to provide sufficient dietary, pharmaceutical, and environmental service to care for their residents' needs. HOUSER failed to provide these services, in part by failing to pay food suppliers and vendors of pharmacy and clinical laboratory services, medical waste disposal, trash disposal, and nursing supplies, and in part by failing to repair washing machines and dryers, water heaters, air conditioners, and leaking roofs. The nursing homes suffered continual food shortages, and employees spent their own money to buy milk, bread, and other groceries, so that residents would not starve. Employees also bought nursing supplies for the residents and cleaning supplies for the homes, and they also washed the residents’ laundry in laundromats or their homes. One nursing home resident testified that residents used to pass the time by making bets on which service or utility would be the next to be cut off for nonpayment.
The Georgia Department of Human Resources (DHR) Office of Regulatory Services (ORS) received many complaints about the HOUSERS' nursing home from families, staff, and vendors. After giving the nursing homes many opportunities to correct deficiencies, the ORS closed the two nursing homes in Rome in June 2007, and it closed the Brunswick home in September 2007. One state surveyor inspected the Moran Lake home in Rome in late May 2007, and she testified that the heat, flies, filth, and stench made for an environment best described as “appalling” and “horrendous.”
In addition to the healthcare fraud count, HOUSER was convicted of eight counts of deducting $806,305 in federal payroll taxes from his employees’ paychecks, but not paying that money over to the IRS. HOUSER wrote worthless checks to the IRS worth hundreds of thousands of dollars at the same time that he was using the nursing homes’ funds to buy real estate. HOUSER was also convicted of failing to file personal income tax returns for 2004 and 2005.
HOUSER and his wife RHONDA WASHINGTON HOUSER, 48, of Atlanta, were indicted on April 14, 2010, and charged with conspiring to defraud Medicare and Medicaid in the operation of two nursing homes in Rome, Georgia, and another in Brunswick, Georgia. RHONDA WASHINGTON HOUSER pleaded guilty to misprision of the felony of health care fraud in December 2011, and she awaits sentencing. HOUSER’s sentencing is scheduled for June 29, 2012.
The healthcare fraud charge against HOUSER carries a maximum sentence of 20 years in prison and a fine of $250,000. The eight counts that charge HOUSER with failing to pay over payroll taxes to the IRS each carry a maximum sentence of 5 years in prison and a fine of $10,000 per count. The charges that HOUSER failed to file tax returns carries a maximum sentence of one year in prison and a fine of $25,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
***********************************************************************
Report Medicare & Medicaid Fraud by Calling 1-888-482-6825 or by visiting
www.usawhistleblower.com
