In what Justice Department officials are calling the largest fraudulent billing plot ever prosecuted by a healthcare fraud strike force, HHS and FBI agents arrested four people--Lawrence Duran, Marianella Valera, Judith Negron and Margarita Acevedo-- for their alleged role in masterminding an unprecedented plot to defraud the Medicare program of close to $200 million.
The people involved were owners and senior managers of American Therapeutic Corporation (ATC) and Medlink Professional Management Group, Inc. The business model of the two Miami-based businesses was Medicare fraud. The companies allegedly netted $83 million in illicit payments from Medicare since 2003, The Christian Science Monitor reports. The four people and two companies were charged in a 13-count indictment for billing Medicare for community-based mental health services that were unnecessary or never actually provided.
The alleged illegal conduct in the indictment is "unlike anything we've seen before in terms of the nature and size of the scheme," Assistant Attorney General, Lanny Breuer said in a statement yesterday.
Unlike so much Medicare fraud that involves medical equipment and services, this case involves Medicare's Partial Hospitalization program, which gives mental health patients much-needed services in outpatient settings.
ATC and other defendants preyed on some of the most vulnerable patients, paying kickbacks to owners and operators of assisted living facilities and halfway houses in exchange for patient referrals. At ATC branches, bogus mental health therapy sessions were organized where elderly and infirm patients were left in rooms for hours, and received no legitimate or medically necessary therapy. Some of the patients suffered from Alzheimer's disease or dementia, and did not even know where they were. Others simply came to make money through kickbacks.
Some of the defendants were also charged with having "charting parties," where senior managers met regularly to write up fake patient medical charts.
Patient recruiters would find people who needed a place to stay overnight and offer them free temporary housing, cash or other bribes in exchange for agreeing to pose as patients.
Since the inception of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) to fight Medicare fraud in 2007, Strike Force operations have led to charges against more than 825 defendants who falsely billed Medicare for more than $2 billion.
To learn more:
- read these DoJ press releases: release 1 and release 2
- here is the Christian Science Monitor story
- read the Miami Herald article
- here's the Associated Press piece