Wednesday, September 18, 2013

Sewickley Woman Charged with Health Care Fraud

PITTSBURGH—A Sewickley resident has been indicted by a federal grand jury in Pittsburgh on charges of health care fraud, United States Attorney David J. Hickton announced today.
The one count indictment named Mary Monica Wilson-Lefler, 62, of 103 Compton Road, Sewickley, Pennsylvania, 15143, as the defendant.
According to the indictment, Wilson was a salesperson who offered two durable medical equipment companies in the Pittsburgh area a business arrangement involving special air mattresses, known as powered pressure reducing mattresses or PPRAMS. PPRAMS are designed to reduce serious skin ulcers on patients who are essentially bedridden. She visited long term care (LTC) facilities to find patients and handled all the paperwork necessary to enable the DME companies to bill Highmark Blue Cross/Blue Shield’s Security Blue Medicare Program (Security Blue). In order to qualify for Medicare coverage for these PPRAMS, a doctor must order the item in writing. In this case, Wilson prepared and sent by fax to attending physicians requests for orders for the PPRAMS. The faxed information included patient skin condition reports that falsely reported that the patients all had serious skin ulcers. Some of the these patient skin condition reports contained forged signatures of the LTC staff, and some had forged signatures of physicians. In reality, none of the patients had serious skin ulcers or any other qualifying conditions that would meet the Medicare coverage requirements. There were about 83 patients from four facilities in whose names the false claims were made. The total billed was approximately $400,000, and the total paid to the two DME companies was about $200,000.
The law provides for a maximum sentence of 10 years in prison and a $250,000 fine or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Nelson P. Cohen is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the United States Food and Drug Administration, Office of Criminal Investigations conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

Staten Island Doctor Sentenced to 151 Months in Prison in Connection with $77 Million Medicare Fraud Scheme

BROOKLYN, NY—Earlier today, Gustave Drivas, M.D., 58, of Staten Island, New York, was sentenced to 151 months in prison for his role as a “no-show” doctor in a $77 million Medicare fraud scheme. In addition to the prison term, U.S. District Judge Nina Gershon of the Eastern District of New York sentenced Drivas to three years of supervised release with a concurrent exclusion from employment with any federally funded medical treatment program, ordered him to forfeit $511,000, and ordered him to pay restitution in the amount of $50,943,386. The state of New York revoked Dr. Drivas’ medical license earlier this year.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Special Agent in Charge Thomas O’Donnell of the HHS Office of Inspector General (HHS-OIG).
Drivas was convicted by a jury of health care fraud conspiracy and health care fraud on April 8, 2013, after a seven-week trial. Including Drivas, 13 individuals have been convicted of the massive fraud scheme, either through guilty plea or trial conviction.
“Abandoning the mandate to ‘do no harm,’ Dr. Drivas was instead up to no good. Drivas put personal greed before patient care and was willing to sell his Medicare billing number for cash in his pocket,” stated United States Attorney Lynch. “This office and the Department of Justice will aggressively investigate and prosecute health care fraud. Corrupt doctors like Dr. Drivas are not above the law and will be held accountable for their crimes.”
According to court documents and the evidence at trial, from 2005 to 2010, Drivas was the medical director or a rendering physician of a clinic in Bath Beach, Brooklyn, that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC, and SZS Medical Care PLLC (Bay Medical clinic). Drivas knowingly authorized his co-conspirators at the clinic to use his Medicare billing number to fraudulently charge Medicare more than $20 million for medical procedures and services that were never performed. In return, he received more than $500,000 for his role in the scheme. The evidence proved that Drivas was a no-show doctor who almost never visited the clinic except to pick up his check. The evidence also showed that the clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary and never provided.
The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries. The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010. This room was marked “Private” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.
To generate the large amounts of cash needed to pay the patients, Drivas’ business partners and co-conspirators recruited a network of external money launderers who cashed checks for the clinic. Clinic owners wrote clinic checks payable to various shell companies controlled by the money launderers. These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds. The money launderers cashed these checks and provided the cash back to the clinic. Clinic employees used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.
This case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys William P. Campos and Shannon C. Jones of the Eastern District of New York. The case was investigated by the FBI and HHS.
The case 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 New York. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Defendant:
Gustave Drivas, M.D.
Staten Island, New York
Age: 58

Friday, September 13, 2013

Physician-Owned Hospital Agrees to Resolve Its Civil and Criminal Liability for Benefiting from Illegal Kickbacks to Physicians

DALLAS—Forest Park Medical Center LLC (FPMC), a North Texas physician-owned hospital, paid over $258,000 to settle allegations that it violated the civil False Claims Act, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The United States contends that a FPMC representative paid illegal kickbacks to area physicians to obtain referrals for Tricare patients, a federally funded health care program, in violation of the federal law, between 2008 and 2012. Based on the same allegations, FPMC entered into a non-prosecution agreement with the United States and agreed to certain conditions, as well as a federally imposed monitor for not more than 24 months. FPMC fully cooperated with the investigation and, by settling civilly and criminally, did not admit any wrong-doing or liability.
FPMC, located in Dallas, did not seek reimbursement from any federal sources such as Medicare and Medicaid but only commercial payors and self-pay. Federal and state law usually limits the amount of compensation paid to physicians and their ability to refer certain patients under federally insured programs. Because FPMC believed it did not accept federal funds, its representatives, to the benefit of FPMC’s behalf, offered and paid excessive remuneration and other things of value to actual and potential referring physicians or others, including amounts for “marketing” or “advertising.” Payments also were made in the form of cash and giftcards/coupons for luxury items. The United States alleges such payments were made to obtain federal health care program patients, such as TRICARE, a program for military retirees and their dependents. The United States contends such payments were unlawful kickbacks for the referral of federal health care program patients in violation of the federal Anti-Kickback Statute between January 1, 2008 and October 31, 2012. The United States initiated the investigation in response to numerous complaints.
In the non-prosecution agreement, FPMC acknowledged the United States has sufficient evidence to seek an indictment for the offering and payment of illegal kickbacks in violation of federal law. In return for the non-prosecution of the hospital, FPMC selected and retained an independent monitor to address any compliance issues and the United States’ concerns regarding the allegations of illegal conduct. The monitor will be in place for not more than 24 months and will review and evaluate inpatient and outpatient claims submitted to all payors, not just federal programs. FPMC also agreed to cooperate with the United States’ ongoing investigation into certain individuals. No persons were released under the civil and criminal agreements. The United States’ investigation remains ongoing.
U.S. Attorney Saldaña praised the efforts of the investigating agencies, including the Defense Criminal Investigative Services; FBI; Department of Labor, EBSA; Office of Inspector General of the Office of Personnel Management; and FDA-CI.
“This civil and criminal resolution spares the honest employees and investors of FPMC, while holding the hospital accountable for allowing an environment where its representatives paid illegal kickbacks for referrals,” said U.S. Attorney Saldaña. “This outcome imposes well-deserved measures that we expect will ensure FPMC becomes fully compliant with federal and private health care program requirements. Whether physician-owned, not-for-profit, or for-profit, the Department of Justice expects and requires all providers to be trustworthy and abide by the law,” Saldaña continued.
The case was handled by Assistant U.S. Attorneys Sean McKenna, Errin Martin, and Lynette Wilson and Special Assistant U.S. Attorney Glenn Harrison.

Mastermind of $11 Million Detroit Medicare Fraud Scheme Sentenced to 50 Months in Prison

WASHINGTON—Muhammad Shahab, the mastermind of an almost $11 million Medicare fraud scheme in Detroit, was sentenced today to 50 months in prison.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Robert D. Foley, III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh, III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.
Shahab, 53, was sentenced by U.S. District Judge Denise Page Hood in the Eastern District of Michigan. In addition to his prison term, Shahab was sentenced to three years of supervised release and was ordered to pay more than $10.8 million in restitution, jointly and severally with his co-defendants.
Shahab pleaded guilty to one count of health care fraud in February 2010. According to information contained in plea documents, Shahab helped finance and establish two Detroit-area home health agencies, Patient Choice Home Healthcare Inc. (Patient Choice) and All American Home Care Inc. (All American). Shahab admitted that while operating or being associated with both home health agencies, he and his co-conspirators billed Medicare for home health visits that never occurred.
Shahab admitted that he and his co-conspirators recruited and paid cash kickbacks and other inducements to Medicare beneficiaries in exchange for the beneficiaries’ Medicare numbers and signatures on documents falsely indicating that they had visited Patient Choice and All American for the purpose of receiving physical or occupational therapy. Shahab admitted that a large number of the beneficiaries were neither homebound nor in need of any physical therapy services.
Shahab also admitted to securing physician referrals for medically unnecessary home health services through the payment of kickbacks to physicians or individuals associated with physicians. Shahab employed several physical therapists and physical therapy assistants to sign medical documentation needed to begin billing for home health care services, including initial payments and payments for each visit to a Medicare beneficiary. Shahab acknowledged that he knew the physical therapists and physical therapy assistants were not actually conducting a large majority of the visits or treating a large majority of the patients and confessed to billing and receiving payment from Medicare for services not rendered or medically unnecessary services.
Between approximately August 2007 and October 2009, Shahab and his co-conspirators at Patient Choice and All American submitted approximately $10.8 million in claims to the Medicare program for physical and occupational therapy services that were never rendered or were medically unnecessary.
This case was investigated by the FBI, HHS-OIG, and the Internal Revenue Service and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case was prosecuted by Deputy Chief Gejaa Gobena, Assistant Chief Catherine Dick and Trial Attorney Niall O’Donnell of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.

Thursday, September 12, 2013

Medical Supply Company Officer and Southern California Physician Sentenced in $1.5 Million Medicare Fraud Scheme

WASHINGTON—A former officer of Fendih Medical Supply Inc. was sentenced to serve 51 months in prison yesterday in Los Angeles for his role in a fraud scheme that resulted in $1.5 million in fraudulent claims to Medicare. In addition, a physician was sentenced to 27 months in prison for his role in the scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte, Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.
Godwin Onyeabor, 49, of San Bernandino, California, was sentenced on September 9, 2013, by U.S. District Judge Manuel L. Real in the Central District of California to 51 months in prison. In addition to his prison term, Onyeabor was sentenced to three years of supervised release. Restitution will be determined at a later date. Dr. Sri J. Wijegunaratne, 58, of Anaheim, California, was sentenced to 27 months in prison by Judge Real. In addition to his prison term, Wijegunaratne was sentenced to three years of supervised release and ordered to pay restitution in the amount of $87,846.
On April 24, 2013, a jury in Los Angeles federal court found Wijegunaratne, Onyeabor, and Heidi Morishita, 48, guilty of one count of conspiracy to pay and receive kickbacks. In addition, Wijegunaratne and Onyeabor were found guilty of conspiracy to commit health care fraud. Wijegunaratne was found guilty of seven counts of health care fraud, and Onyeabor was found guilty of 11 counts of health care fraud.
During trial, the evidence showed that Onyeabor, as the former officer of a durable medical equipment (DME) supply company, fraudulently billed more than $1 million to Medicare for DME that was either never provided to its Medicare beneficiaries or was not medically necessary. Wijegunaratne provided Onyeabor and others with medically unnecessary power wheelchair prescriptions, and both Wijegunaratne and Morishita sold power wheelchair prescriptions to Onyeabor and others.
The evidence showed that Onyeabor and others paid Wijegunaratne and Morishita cash kickbacks for fraudulent prescriptions for DME, and Onyeabor and others used these prescriptions to bill Medicare for the power wheelchairs and other DME. Several Medicare beneficiaries testified that they were lured to medical clinics with the promise of free items such as vitamins and juice, only to receive power wheelchairs that they did not need and did not want, and were unsuccessful in their attempts to reject delivery of the power wheelchairs from Onyeabor’s supply company.
As a result of this fraud scheme, Onyeabor, Wijegunaratne, and others submitted and caused the submission of approximately $1.5 million in false and fraudulent claims to Medicare and received almost $1 million on those claims.
Morishita’s sentencing is scheduled for September 30, 2013.
The case is being investigated by the FBI and the Los Angeles Region of the HHS-Office of Inspector General (HHS-OIG) and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case is being prosecuted by Assistant Chief Benton Curtis and Trial Attorneys Fred Medick and Alexander Porter of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers. To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.

Two Doctors and a Salesman Admit Roles in Bribes-for-Test-Referrals Scheme Involving New Jersey Clinical Laboratory

NEWARK, NJ—Two New Jersey doctors and a company salesman pleaded guilty today to their roles in a long-running bribes-for-test-referrals scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey; its president; and numerous associates, U.S. Attorney Paul J. Fishman announced.
Angelo Calabrese, 56, of Pine Brook, New Jersey; Paul Ostergaard, 72, of Pompton Plains, New Jersey; and David McCann, 45, of Lyndhurst, New Jersey, all pleaded guilty today before U.S. District Judge Stanley R. Chesler in Newark federal court.
Calabrese, a doctor with an office in North Arlington, New Jersey, pleaded guilty to an information charging him with violating the Travel Act and admitted accepting more than $130,000 in bribes to refer at least $600,000 in lab business to BLS. Ostergaard, a doctor with an office in Pompton Plains, New Jersey, pleaded guilty to an information charging him with violating the Travel Act and admitted accepting more than $50,000 in bribes to refer at least $150,000 in lab business to BLS. McCann pleaded guilty to an information charging him with conspiring to violate the Anti-Kickback Statute and the Travel Act and admitted paying thousands of dollars in cash to doctors on behalf of BLS.
With today’s guilty pleas, 17 people have now pleaded guilty in connection with the sophisticated BLS bribery scheme, which its organizers have admitted involved the payment of millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.
“We are continuing to pursue those defendants, including doctors, who put personal profits ahead of patient care,” U.S. Attorney Fishman said. “Patients need to be confident that their doctors are recommending providers who are best qualified to perform medically necessary tests. Those doctors who recommended providers in return for payoffs should know we are coming after them.”
“As is evident in the pleas entered today, and the investigation into the illegal activity of Biodiagnostic Laboratory Services, the FBI Newark takes very seriously the allegations of health care fraud, bribes, and kickbacks,” FBI Special Agent in Charge Aaron T. Ford said. “This investigation and prosecution remains ongoing, and those medical professionals that decided to make medical referrals in exchange for bribes are expected to be brought to justice. These pleas today are a direct result of the joint efforts of Health and Human Services-Office of Inspector General, United States Postal Inspection Service, Internal Revenue Service, and Federal Bureau of Investigation.”
According to documents filed in this and other cases and statements made in court:
Calabrese received more than $130,000 from BLS between 2010 and 2013 through a sham consulting agreement and a sham rental agreement, which combined to pay Calabrese more than $4,500 per month in bribes from BLS. Craig Nordman, 34, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC—one of several entities used by BLS to make illegal payments—who pleaded guilty in June to his role in the scheme, made many of the payments to Calabrese on behalf of BLS.
Ostergaard received more than $50,000 from BLS between 2006 and 2009 through a sham lease agreement and a sham service agreement. William Dailey, 42, of Wall, New Jersey, a BLS salesman who pleaded guilty to his role in the scheme in May, negotiated the sham agreements on behalf of BLS, with the knowledge and approval of BLS’s president, David Nicoll, 39, of Mountain Lakes, New Jersey. Ostergaard admitted today that while he was being bribed to make referrals to BLS, he noticed that BLS was adding tests that Ostergaard had not ordered for his patients but stayed silent about the added tests.
McCann paid thousands of dollars in cash on a monthly basis between December 2011 and April 2013 to numerous physicians on behalf of BLS in exchange for the doctors’ referral of blood specimens to BLS.
On April 9, 2013, federal agents arrested David Nicoll; Scott Nicoll, 32, of Wayne, New Jersey, a senior BLS employee and David Nicoll’s brother; and Nordman. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Frank Santangelo, 43, of Boonton, New Jersey. In June, David and Scott Nicoll, Nordman, and four other associates of BLS pleaded guilty to charges related to their involvement. Santangelo, a doctor, pleaded guilty last month to charges relating to his role in the scheme. So far, 11 employees or associates of BLS and six physicians have pleaded guilty to their roles in the bribery scheme.
“Offering slush fund payments for medical referrals, ultimately paid for by taxpayers, can have absolutely no place in our health care system,” Thomas O’Donnell, Special Agent in Charge of the Office of Inspector General at the U.S. Department of Health and Human Services region including New Jersey, said. “Such schemes will continue to be vigorously investigated and prosecuted, and these criminals will be brought to justice.”
The bribery count to which Calabrese and Ostergaard pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. McCann faces a maximum potential penalty of five years in prison and a $250,000 fine on the bribery conspiracy charge. Sentencing for all three defendants is scheduled for March 13, 2014.
Calabrese and Ostergaard have also agreed to forfeit $334,000 and $53,900, respectively. The investigation has so far recovered more than $3 million through forfeiture.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge O’Donnell; IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Joseph Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.

New Jersey doctors admit taking bribes in Biodiagnostic Laboratory Services case

Two New Jersey doctors pleaded guilty Wednesday to accepting thousands of dollars in bribes from a laboratory company that operated a widespread kickback scheme to win referrals, the U.S. attorney said.
Angelo Calabrese, a doctor with an office in North Arlington, and Paul Ostergaard, a doctor with an office in Pompton Plains, said they accepted the money from Biodiagnostic Laboratory Services LLC, violating the Travel Act, which forbids the use of the U.S. mail to break the law.
Parsippany-based Biodiagnostic Laboratory Services was a clinical laboratory that tested blood specimens.
The company set up shell entities to pay bribes to doctors who both sent it blood samples and ordered unnecessary tests. It then billed Medicare and private insurers, generating more than $100 million. Some of the physicians received more than $100,000 in bribes from January 2006 through April 2013, the government has said.
So far, 11 company employees, including its executives, have pleaded guilty for their roles in the scheme. Three of the employees are Monmouth County residents: Salesmen Len Rubinstein of Holmdel, Cliff Antell of Rumson, and William Dailey of Wall have pleaded guilty to bribing physicians.
Calabrese and Ostergaard pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark. They are among six doctors who have pleaded guilty to accepting payments. The others are: Dennis Aponte of Cedar Grove; Claudio Dicovsky of Fort Lee; Franklin Dana Fortunato of Montville; and Frank Santangelo of Boonton.
“We are continuing to pursue those defendants, including doctors, who put personal profits ahead of patient care,” U.S. Attorney Paul Fishman said.
According to authorities:
• Calabrese, 56, of Pine Brook, received more than $130,000 from Biodiagnostic Laboratory Services between 2010 and 2013.
• Ostergaard, 72, of Pompton Plains, received more than $50,000 from the company between 2006 and 2009. He said that he noticed the company added tests he didn’t order, but he stayed silent about it, the government said.
• David McCann, 45, of Lyndhurst, a salesman for Biodiagnostic Laboratory Services, also pleaded guilty Wednesday.

Tuesday, September 10, 2013

Oakland County Doctor and Owner of Michigan Hematology and Oncology Centers Charged in $35 Million Medicare Fraud Scheme

Dr. Farid Fata, 48, of Oakland Township, Michigan, was arrested this morning and charged in a criminal complaint for his role in a health care fraud scheme which involved submitting false claims to Medicare for services that were medically unnecessary, including chemotherapy treatments, announced United States Attorney Barbara L. McQuade and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Joining in the announcement were Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation, and Special Agent in Charge Lamont Pugh, Health and Human Services-Office of Inspector General (HHS-OIG).
United States Attorney Barbara L. McQuade stated, “Our first priority is patient care. The agents and attorneys acted with great attention to detail to stop these allegedly dangerous practices as quickly as possible, and we have set up a victim hotline so that patients can access their files and get questions answered.”
FBI Special Agent in Charge Robert D. Foley, III stated, “Violating patients’ trust and placing them at risk through fraudulent abuse of our nation’s health care system is deplorable and a crime which the FBI takes most seriously. The FBI remains committed to the arrest and prosecution of those who commit health care fraud.”
HHS-OIG Special Agent in Charge Lamont Pugh stated, “The conduct alleged in this complaint is serious, not only in terms of potential Medicare dollars improperly obtained, but patient safety as well. The OIG will aggressively investigate allegations of this nature in order to ensure the safety of Medicare patients and to protect vital taxpayer dollars.”
According to the complaint, Dr. Fata owns and operates Michigan Hematology Oncology Centers (MHO), which has offices in Clarkston, Bloomfield Hills, Lapeer, Sterling Heights, Troy, and Oak Park. It was through MHO that Dr. Fata allegedly submitted fraudulent claims to Medicare for medically unnecessary services, including chemotherapy treatments, positron emission tomograph (PET) scans, and a variety of cancer and hematology treatments for patients who did not need them. In the course of the scheme, Dr. Fata falsified and directed others to falsify documents. MHO billed Medicare for approximately $35 million dollars over a two-year period, approximately $25 million of which is attributable to Dr. Fata.
The complaint further alleges that Dr. Fata directed the administration of unnecessary chemotherapy to patients in remission; deliberate misdiagnosis of patients as having cancer to justify unnecessary cancer treatment; administration of chemotherapy to end-of-life patients who would not benefit from the treatment; deliberate misdiagnosis of patients without cancer to justify expensive testing; fabrication of other diagnoses such as anemia and fatigue to justify unnecessary hematology treatments; and distribution of controlled substances to patients without medical necessity or administered them at dangerous levels.
The complaint goes on to allege that Dr. Fata directed that chemotherapy be administered to patients who had other serious medical conditions that required immediate treatment before he would permit them to go to the hospital. In one instance, a male patient fell down and hit his head when he came to MHO. Dr. Fata insisted that the patient receive his chemotherapy before he could be taken to the emergency room. MHO administered the chemotherapy, after which the patient was taken to the emergency room. The patient later died from his head injury. In the second instance, a patient came to MHO with extremely low sodium levels, which can be fatal. Dr. Fata again directed that the patient first receive chemotherapy before being taken to the emergency room. MHO administered the chemotherapy and the patient was taken to the emergency room and hospitalized.
Dr. Fata will be making his initial appearance in federal court this afternoon at 1 p.m.
Patients who have questions concerning their medical records and/or information regarding this investigation and prosecution can call the United States Attorney’s Office Information Line at 888-702-0553.
The case is being prosecuted by Assistant Chief Catherine Dick, supervisor of the Detroit Medicare Fraud Strike Force, and Trial Attorney Matthew Thuesen of the Department of Justice as well as Sarah Resnick Cohen, Deputy Chief of the Health Care Fraud Unit at the U.S. Attorney’s Office, and Justin Bidwell, Special Assistant United States Attorney. The investigations were conducted jointly by the FBI and HHS- OIG, along with the assistance of the Michigan Attorney General’s Office.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team, go to: www.stopmedicarefraud.gov.

Health Care Business Owner is Sentenced to Four Years in Prison, Pays a Million-Dollar Civil Settlement, and Agrees to 20-Year Exclusion from Medicare and Medicaid in Connection with Illegal Kickback Scheme

GRAND RAPIDS, MI—U.S. Attorney Patrick Miles announced today that Babubhai Rathod, age 44, of Okemos, Michigan, was sentenced to four years in prison and two years of supervised release for his lead role in a conspiracy to pay illegal kickbacks to health care practitioners and others to induce the referral of patients to medical clinics, physical therapy clinics, and a home health care agency. U.S. District Judge Janet T. Neff also ordered Rathod to pay $950,000 in restitution, $900,000 of which Rathod paid prior to sentencing under the terms of a related $1,000,000 civil False Claims Act settlement. As part of that civil settlement, Rathod also agreed to a 20-year exclusion from federal health care programs, including Medicare and Medicaid. In sentencing Mr. Rathod, Judge Neff described the kickback charges as “very, very serious” and having “consequences to...very important government programs in which millions of Americans participate.”
Rathod’s conviction and the related civil settlement arose from a superseding indictment and civil complaint which alleged that between at least January 2007 and January 2012, Rathod directed a scheme to pay physicians, mid-level practitioners, and others for referring patients to medical clinics (Lakeshore Spine & Pain P.C., based in Ludington, Michigan), physical therapy clinics (U.S. Rehab Services P.C., among others, based in Mt. Pleasant, Michigan), and a home health care agency (Lakeshore Home Health Care Inc., based in Lansing, Michigan). The illegal payments were made in cash and checks disguised as bonuses, mileage reimbursements, and payments under sham contracts for medical director and consulting services that were never performed. During the sentencing hearing, Judge Neff specifically noted that the physicians who received such kickbacks stole from government programs that provide “crucial medical services.” Judge Neff further emphasized, with respect to such medical professionals, that “[a] thief is a thief.”
The superseding indictment and civil complaint also alleged that between at least January 2007 and January 2012, Rathod directed a scheme where Lakeshore Spine & Pain P.C. routinely submitted claims for medical services in order to fraudulently obtain higher insurance reimbursements than those to which the company was entitled, a practice known as upcoding. Notably, Rathod was able to own and operate this network of affiliated health care companies and direct these kickback and upcoding schemes, despite the fact that in 2003, Rathod pleaded one of his physical therapy companies guilty to a felony charge of falsifying medical records and subsequently lost his physical therapy license as the result of an assault conviction involving a patient.
Rathod’s sentencing follows the felony convictions of five other persons who paid or received illegal kickbacks in exchange for referring patients to Rathod’s health care companies for physical therapy, electrodiagnostic testing, and home health care services. Judge Neff imposed the following sentences for those individuals:
  • Lino S. Dial, Jr., D.O. (Physician, Edmore, Michigan). Dial was sentenced to four months’ imprisonment and $70,000 in restitution. Dial has also been excluded from federal health care programs for five years.
  • Clinton J. Cornell, P.A. (Physician Assistant, Mt. Pleasant, Michigan). Cornell was sentenced to fourteen months’ imprisonment and $38,430 in restitution. Cornell is also subject to a minimum five-year exclusion from federal health care programs.
  • John E. Roberts, P.A. (Physician Assistant, Mt. Pleasant, Michigan). Roberts was sentenced to four months’ imprisonment and $70,000 in restitution. Roberts has also been excluded from federal health care programs for five years.
  • Natalie J. Schutte, P.A. (Physician Assistant, Edmore, Michigan). Schutte was sentenced to two years’ probation and $120,000 in restitution. Schutte has also been excluded from federal health care programs for five years.
  • Raju G. Nakum (Practice Administrator, Mt. Pleasant, Michigan). Nakum was sentenced to three months’ imprisonment and $345,000 in restitution. Nakum is also subject to a minimum five-year exclusion from federal health care programs.
Two other individuals employed by Lakeshore Spine & Pain P.C. were convicted of felony health care fraud for their roles in the illegal upcoding scheme. Judge Neff imposed the following sentences for those individuals:
  • Rajesh Makwana (Practice Administrator, Ludington, Michigan). Makwana was sentenced to twelve months and one day imprisonment and $71,000 in restitution. Makwana is also subject to a minimum five-year exclusion from federal health care programs.
  • Sandeepkumar Patel (Biller, Ludington, Michigan). Patel was sentenced to two years’ probation. Patel has been excluded from federal health care programs for five years and will be deported from the United States.
In addition to these individuals and Rathod, a ninth individual, Kevin Witt, D.O., of Jackson, Michigan, was charged and convicted by the Michigan Attorney General’s Office on a related state felony charge for accepting kickback payments from Rathod. Witt has been excluded from federal health care programs for five years.
This case resulted from a civil lawsuit filed by a whistleblower who worked in one of Rathod’s offices. The lawsuit, known as a qui tam action, was filed under the False Claims Act and Michigan Medicaid False Claims Act, which allow private whistleblowers to bring lawsuits on behalf of the United States and the state of Michigan and receive a share of any recoveries. In this case, the United States and state of Michigan intervened in the whistleblower’s lawsuit, recovered $1,140,000 to date, and are pursuing additional claims against over a dozen other physicians and mid-level practitioners. The whistleblower has received $240,100 of these settlement proceeds, as well as additional amounts for attorney’s fees and costs.
“Whistleblowers play a key role in protecting federal health care programs from fraud and abuse, including kickback schemes that are often difficult to detect and result in the referral of unnecessary and upcoded services,” said U.S. Attorney Miles. “Paying kickbacks for patient referrals distorts the motives of health care professionals. The U.S. Attorney’s Office will continue to aggressively investigate and prosecute such kickback schemes and seek all available civil and criminal remedies including treble civil damages, monetary penalties, and felony prosecutions.”
“It is essential to maintain integrity in our health care system. Patients deserve to know that when a doctor refers them for additional treatment, the decision to do so is based upon quality health advice—not what is best for the doctor’s bottom line,” said Attorney General Bill Schuette. “Kickbacks with the Medicaid program do not just hurt patients, they affect the taxpayers whose hard-earned dollars subsidize healthcare for those in need.”
FBI Special Agent in Charge Robert D. Foley, III stated, “Those who provide health care must be held to the highest standards of ethics and integrity. The FBI remains committed to pursuing and prosecuting such criminals who abuse the system by receiving illegal kickbacks.”
“Paying kickbacks for the referral of Medicare or Medicaid patients is a serious crime,” said Lamont Pugh, III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General-Chicago Region. “Kickbacks inappropriately influence health care practitioners’ medical decision making process, lead to overutilization and/or upcoding of services, and further increase program costs. The OIG will continue to aggressively pursue all available remedies whether criminal, civil, or administrative to ensure the integrity of the Medicare and Medicaid programs and protect vital taxpayer dollars.”
These convictions and settlements were the result of a coordinated effort by the U.S. Attorney’s Office for the Western District of Michigan, the Michigan Attorney General’s Office, the Federal Bureau of Investigation, the U.S. Department of Health and Human Services-Office of Inspector General, and Blue Cross Blue Shield of Michigan.

Michigan Physical Therapist and Home Health Agency Owner Pleads Guilty to Role in Medicare Fraud Scheme

WASHINGTON—A greater Detroit-area physical therapist who was also an owner of a home health agency pleaded guilty yesterday to his role in a $22 million home health care fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley, III of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh, III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office, and Special Agent in Charge Erick Martinez of Internal Revenue Service Criminal Investigation made the announcement.
Hemal Bhagat, 32, of Troy, Michigan, pleaded guilty on August 14, 2013, before U.S. District Judge Bernard A. Friedman in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, scheduled for November 12, 2013, Bhagat faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to information contained in plea documents, Bhagat admitted that from approximately May 2009 through October 2011, he conspired with others to commit health care fraud through billing Medicare for home health care services that were not actually rendered and/or not medically necessary. A licensed physical therapist, Bhagat began working in June 2009 for Troy-based Prestige Home Health Services Inc., a home health agency owned by alleged co-conspirators. In approximately August 2009, he and other co-conspirators became owners of Royal Home Health Care Inc., a home health agency also located in Troy.
Bhagat admitted that his co-conspirators at Prestige and Royal paid kickbacks to patient recruiters to obtain the information of Medicare beneficiaries, which the co-conspirators then used to bill Medicare for services that were not provided to these beneficiaries and/or were not medically necessary. He and his co-conspirators then created fictitious therapy files appearing to document physical therapy services provided to Medicare beneficiaries, when in fact no such services had been provided and/or were not medically necessary. Bhagat’s role in creating the fictitious therapy files was to sign documents—including physical therapy evaluations, supervisory patient visits, and patient discharge forms—indicating that he and others had provided physical therapy services to particular Medicare beneficiaries, when in fact they had not. Bhagat admitted to knowing that the documents he falsified would be used to support false claims to Medicare by his co-conspirators at Prestige and Royal. He submitted or caused the submission of claims to Medicare for services that were not medically necessary and/or not provided, which in turn caused Medicare to pay approximately $4,767,359.03.
This case was investigated by the FBI, HHS-OIG, and IRS-Criminal Investigation and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Trial Attorney Niall M. O’Donnell, Deputy Chief Charles E. Duross, and Trial Attorney James McDonald of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.

Elmira Woman Indicted for Embezzling Workers’ Pension and Health Care Money

ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Rochester has returned a three-count indictment charging Linda Riner, 62, of Elmira, New York, with embezzling money from Local Laborer’s 1358 employee pension and welfare benefit funds and lying to federal investigators about this matter. Each charge carries a maximum sentence of five years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that Riner was the funds administrator of the Local Laborer’s 1358 employee benefit plans and owed those plans a fiduciary duty. Instead of honoring that duty, the defendant took advantage of her position to pay herself and her staff thousands of dollars in “Christmas bonuses” without authorization. In addition, when interviewed by special agents with the Federal Bureau of Investigation and Department of Labor about these bonuses, Riner sought to mislead investigators by claiming that the payments had been approved. In total, the defendant stole approximately $9,000 from the plans.
The indictment is the result of an investigation by special agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel, and the Department of Labor, under the direction of Special Agent in Charge Robert Lapina.
The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.

Physician Pleads Guilty to Health Care Fraud Charges

BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced that Daniel C. Gillick, 63, a physician residing in Youngstown, New York, pleaded guilty to obtaining controlled substances by fraud and health care fraud. The charges carry a maximum sentence of 10 years in prison, a $500,000 fine, or both.
Assistant U.S. Attorney Maura K. O’Donnell and Timothy C. Lynch, who are handling the case, stated that between August 2011 and September 7, 2011, the defendant was employed as an emergency room physician at Schuyler Hospital. During that time, Gillick devised a scheme whereby on September 7, 2011, his girlfriend reported to the emergency room at Schuyler Hospital and pretended to suffer from a medical condition known as trygeminal neuralgia. The defendant then performed an apparent examination of her, fraudulently diagnosed her as suffering from trygeminal neuralgia and issued a prescription to her for Dilauded, a controlled substance.
In reality, Gillick’s girlfriend was not suffering from this condition and had no medical need for the drug Dilaudid. In participating in this illegal scheme, the defendant defrauded Schuyler Hospital and also aided and abetted his girlfriend in obtaining a controlled substance by fraud.
“With the abuse of prescription drug medications at epidemic levels in our community and across the country, our office will not stand for a member of the medical community defrauding the health care system by illegally prescribing such medications,” said U.S. Attorney Hochul. “When used appropriately, prescription pain medications can be of great benefit to a patient, but when abused, they can lead to a lifetime of addiction resulting in serious, even deadly complications. Our office, along with our law enforcement partners, will not hesitate to prosecute those in the medical profession who abuse their positions of trust.”
Gillick and his girlfriend Christina Guilfoyle were arrested in November 2012. Charges are pending again Guilfoyle.
The plea is the result of an investigation on the part of special agents of the United States Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division; special agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel; the New York State Police, under the direction of Major Michael Cerretto, Customs and Border Protection, under the direction of James Engleman, Director of Field Operations; the New York State Attorney General Medicaid Fraud Control Unit; the Amherst Police Department, under the direction of Chief John Askey; the Buffalo Police Department, under the direction of Commissioner Daniel Derenda; the Lancaster Police Department, under the direction of Chief Gerald Gill; the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard; the Depew Police Department, under the direction of Chief Stan Carwile; and the Niagara County Sheriff’s Drug Task Force, under the direction of Sheriff James Votour.

Two Area Women Convicted in Home Health Services Conspiracy

CORPUS CHRISTI, TX—Sylvia Salinas Ramirez, of Driscoll, and Debra Jean Velasquez, of Robstown, have been convicted of wire fraud and conspiring to do so as part of a scheme to defraud the Texas Medicaid program through fraudulent home health billings, United States Attorney Kenneth Magidson announced today along with Texas Attorney General Greg Abbott.
Ramirez, 52, and Velasquez, 41, were charged in a 14-count federal indictment returned Wednesday, May 8, 2013. Today, they appeared before U.S. District Judge Nelva Gonzales Ramos and entered pleas of guilty to conspiring to submit false and fraudulent bills to the Texas Medicaid Program by wire transmissions, as well as wire fraud for using interstate wire transmissions to bill.
The two women admitted that from or about August 1, 2009 through on or about June 15, 2010, they were employed by the Corpus Christi office of MRNG Inc. doing business as Caring Touch Home Health. During that time, they conspired to submit false and fraudulent bills through wire transmissions to the Texas Medicaid program and the Medicaid funded managed care organizations known as Evercare of Texas LLC and Superior Health Plan Inc. for home health services that had not been provided. Ramirez and Velasquez admitted they created false and fraudulent time sheets for former Caring Touch employees for home health services that had not been provided and then fraudulently billed Medicaid, Evercare, and Superior in the name of Caring Touch for those non-existent services. They sent approximately 562 of those false and fraudulent bills by wire.
Ramirez and Velasquez also admitted that in order to personally profit from their fraudulent billings, they created phony payroll records from the fraudulent time sheet which they then sent to Caring Tough’s payroll staff. Ramirez and Velasquez then obtained the payroll checks generated from the false and fraudulent time records, forged the signatures of the former Caring Touch employees, and then cashed the checks and divided the money among themselves. Caring Touch and the former employees whose names were used on the false time sheets and checks were not accused of any wrongdoing.
Ramirez and Velasquez admitted that as a result of their false and fraudulent claims, Texas Medicaid, Evercare, and Superior paid the approximate aggregate sum of $155,127.72. As part of their pleas, the women have agreed to pay restitution in that amount.
Conspiracy to commit wire fraud and wire fraud each carry a maximum punishment of 20 years in federal prison without parole as well as a possible $250,000 fine. Judge Ramos has set sentencing December 3, 2013. Ramirez and Velasquez were permitted to remain on bond pending that hearing.
The charges were the result of a joint investigation conducted by officers and agents of the Corpus Christi Police Department, the FBI, Department of Health and Human Services-Office of Inspector General, and the Texas Attorney General’s Medicaid Fraud Control Unit. Special Assistant United States Attorney Rex Beasley and Assistant United States Attorney Jeffery Preston are prosecuting the case.

Monday, September 9, 2013

Abilene Dentist Pleads Guilty in Medicaid Fraud Scheme

ABILENE, TX—A dentist who practiced pediatric dentistry at Kool Smiles in Abilene, Texas, has admitted that he made false and fraudulent statements and entries on patient records, which caused Medicaid to be billed for, and pay, at least $120,000 for services falsely claimed to have been performed, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Dr. Tuan Truong, aka “Terry Truong,” of Abilene, pleaded guilty this afternoon before U.S. District Judge Jorge A. Solis to an information charging one count of making a false statement in connection with a health care matter. Truong, who will remain on bond, faces a maximum statutory penalty of five years in federal prison, a $250,000 fine, and restitution. A sentencing date was not set.
According to documents filed in the case, in summer 2008, Truong began working for Kool Smiles, which paid him a base salary and offered opportunities for bonuses based on additional procedures he performed in excess of daily targets set by Kool Smiles management. Dentists were required to use professional judgment in the treatment and management of patient care.
Beginning on June 30, 2008 and continuing to July 10, 2009, Truong made false entries on Kool Smiles patient records, purporting to have performed dental services for Medicaid beneficiaries that he well knew he had not performed. As a result of the false and fraudulent statements and entries Truong made, Kool Smiles billed Medicaid for procedures that were not performed. In fact, during this time period, Truong made false entries in the Kool Smiles electronic database that caused Kool Smiles to bill and receive payment from Medicaid (and Medicaid affiliates) of more than $120,000 but less than $200,000 for services he claimed to have performed but did not.
In addition, according to the factual resume filed, Truong personally benefitted from this scheme by receiving bonuses of $32,749 to which he would not have been otherwise entitled.
Kool Smiles has cooperated throughout the investigation, which was conducted by the Medicaid Fraud Control Unit of the Office of the Attorney General for the state of Texas and the FBI. Assistant U.S. Attorney Amy Burch, of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

Former Office Manager for Health Care Solutions Network Sentenced in $63 Million Medicare Fraud

WASHINGTON—A former office manager at the defunct health care provider Health Care Solutions Network Inc. (HCSN) was sentenced today in Miami to serve 68 months in prison for her role in a fraud scheme that resulted in more than $63 million in fraudulent claims to Medicare and Florida Medicaid.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations, Miami office, made the announcement.
Lisset Palmero, 45, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to her prison term, Palmero was sentenced to three years of supervised release and ordered to pay restitution in the amount of $17.4 million.
During the course of the conspiracy, Palmero was employed as a receptionist and office manager at HCSN, a mental health facility that purported to provide Partial Hospitalization Program (PHP) services. A PHP is a form of intensive treatment for severe mental illness.
HCSN of Florida (HCSN-FL) operated community mental health centers at two locations. According to court documents, Palmero was aware that HCSN-FL paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid. Palmero also knew that many of the ALF referral patients were ineligible for PHP services because they suffered from mental retardation, dementia, or Alzheimer’s disease.
Court documents reveal that Palmero was aware that HCSN-FL personnel were fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN-FL for purported PHP treatment. Palmero was also aware that medical records were fabricated for “ghost patients” who were never admitted to the HCSN-FL PHP. During her employment at HCSN-FL, Palmero actively concealed the fabrication of medical records by preparing, and causing others to prepare, documentation that was later utilized to support false and fraudulent billing to government-sponsored health care benefit programs, including Medicare and Florida Medicaid.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported HCSN-FL mental health services.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney Allan J. Medina and former Special Trial Attorney William J. Parente.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.