3 schemes that drained Medicare of millions

With the government's hard-lined stance on combating fraud, waste and abuse, recent actions reveal new and old schemes to bilking Medicare. Three recent cases announced by the U.S. Department of Justice demonstrate that Medicare fraud, up to the multi-millions, can happen in just about any healthcare facility.

In the highly publicized case, patient recruiters James Edwards and Nelson Fernandez were sentenced to seven years and more than five years in prison, respectively, for their roles in a stunning $200-million Medicare fraud scam, according to a DoJ statement. They recruited patients for American Therapeutic Corporation, which operated partial hospitalization programs, for kickbacks. Both men admitted to recruiting patients who didn't qualify for partial hospitalization and ineligible patients for sleep studies at ATC's related company, the American Sleep Institute (ASI).

In another related case, owner of an assisted living facility called Robyll Care Assisted Living Facility Billy Denica agreed to send Robyll residents to ATC in exchange for kickbacks, the DoJ said. Denica was sentenced to more than three years in prison.

ATC, its management company Medlink and various owners, managers, physicians, therapists, patient brokers and marketers of ATC, Medlink and ASI were charged with fraud, kickback, money laundering and other offenses in February 2011.

Also in Miami, a licensed psychological associate, Serena Joslin on Monday pleaded guilty for submitting more than $63 million in fraudulent claims to Medicare and Medicaid in Miami and Hendersonville, N.C., according to a DoJ statement. Orchestrated though Health Care Solutions Network (HCSN), a partial hospitalization treatment program for mental health, Joslin said she was aware that HCSN recruited patients who were inappropriate for treatment. Joslin faces a maximum of 10 years in prison and a fine of $250,000, while the HCSN owner and operators await trial.

In a related case, Sarah Da Silva Keller pleaded guilty to conspiracy to commit fraud. She said she knowingly falsified records so that HCSN could bill Medicare for patients who did not receive services from HCSN, according to another DoJ announcement last week. Keller faces a maximum of 10 years in prison and a $250,000 fine for each count.

Meanwhile, officials last Friday sentenced a former co-owner and administrator at Houston home-health company Family Healthcare Group, Princewill Njoku, to nine years in prison and to pay restitution for his role in a $5.2 million Medicare fraud scheme. Njoku paid patient recruiters to get Medicare beneficiaries so Family Healthcare Group could file Medicare claims for skilled nursing services that were medically unnecessary or not provided and then falsified documents to support the claims, according to the DoJ statement. Njoku plead guilty to one count of conspiracy to commit fraud, one count of conspiracy to pay illegal kickbacks to patient recruiters and 16 counts of paying illegal kickbacks. The Family Healthcare Group co-owner, Clifford Ubani, also received a nine-year sentence earlier in June.

The Office of Inspector General and the Government Accountability Office testified last month, noting that Medicare, as well as Medicaid, is still vulnerable to fraud, largely due to poor oversight data. Weak anti-fraud programs led to $43 billion in Medicare overpayments and $21.9 billion in Medicaid overpayments in 2011.

For more information:
- here's the media advisory and statement on the ATC case
- check out announcement and statement on HCSN
- read the statement on Family Healthcare Group

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