CMS Cracks Down Following Two Cases (and $34 Million) of Fraudulent Medicare Billing

Two recent cases of people defrauding Medicare out of millions of dollars have prompted renewed discussion on the Department of Health and Human Services’ (HHS) efforts toward health care fraud prevention during a recent Chicago summit cohosted by HHS and the Department of Justice.

In fiscal year 2011, the Health Care Fraud Prevention and Enforcement Action Team (HEAT) partnership between the two departments has resulted in more than $4 billion in recoveries, for the second year in a row—an all-time high.

Since the Medicare Fraud Strike Force began operations in March 2007, it has charged more than 1,190 defendants who have collectively billed the Medicare program for more than $3.6 billion.


“We have a simple message to criminals thinking about committing Medicare fraud: don’t even try,” said HHS Secretary Kathleen Sebelius in a statement. “Thanks to health reform and our Administration’s work, we have new tools and resources to catch criminals and stop Medicare fraud before it happens.”

The Obama Administration detailed further progress that’s been made due to anti-fraud efforts, including saving millions though pre-payment edits that stop implausible claims before they’re paid; revalidating the enrollment of Medicare providers and removing hundreds from the program for various reasons; and a nearly 75% increase in the number of prosecutions of those charged with fraud.

Atlanta Man Defrauds System of $32.9 Million for “Horrendous” Nursing Home Care


In one case, nursing home provider George Houser, 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, according to the DOJ.

United States District Judge Harold L. Murphy convicted Houser after a bench trial conducted from Jan. 30, 2012 through Feb. 28, 2012. In addition to the health care fraud count, the DOJ continues, Houser was also convicted of eight counts of failing to pay more than $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,” United States Attorney Sally Quillian Yates said in a statement. “We will continue to aggressively protect our most vulnerable citizens and hold accountable those who prey on the elderly and steal precious healthcare dollars.”

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Houser and his wife ran two nursing homes in Rome, Ga., between July 2004 and July 2007, known as Mount Berry and Moran Lake, according to Yates, along with Wildwood in Brunswick, Ga., which they ran from Sept. 2004 through Sept. 2007. The first two nursing homes had approximately 100 residents each, while the third had capacity for 204 residents.

Between July 2004 and September 2007, Houser billed Medicare and Medicaid approximately $39.4 million, of which they paid him $32.9 million, based on his certifications that he was providing residents with appropriate housing and care that were later shown to be false.

“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.”

Evidence shows that rather than providing sufficient care for his nursing home residents, House diverted slightly more than $8 million of the reimbursements to his personal use. Of that, more than $4.2 million was spent on real estate for planned development; Houser also “employed” his ex-wife a salary as a nursing home employee rather than alimony, even though she never actually worked at any of the homes.

Read more about the case on the DOJ’s website.

Miami Assisted Living Facility Owner Pleads Guilty for Role in Fraudulent Kickback Scheme

The owner of an assisted living facility located in the Miami, Fla. area recently pleaded guilty for her role in a kickback scheme that funneled patients to a fraudulent mental health provider, a participation that resulted in more than $1.1 million in fraudulent billing to the Medicare program, reports the DOJ.

Billy Denica, owner of Robyll Care Assisted Living Facility, pleaded guilty before U.S. District Judge Joan A. Lenard to one count of conspiracy to commit health care fraud. Denica agreed to send Medicare beneficiaries who lived in her facility to American Therapeutic Corporation for mental health treatment called partial hospitalization program (PHP) services, in exchange for illegal health care kickbacks, court documents reveal.

ATC “operated” PHPs in seven Floridian locations and was fraudulently billing Medicare for its services. Denica admitted she knew about the fraudulent billing, and faces a maximum of 10 years in prison and a $250,000 fine at her June 2012 sentencing.

Along with its management company Medlink Professional Management Group Inc., ATC has been charged with various health care fraud, kickback, money laundering, and other offenses in two indictments unsealed on Feb. 15, 2011; several entities and individuals involved in the case have pleaded guilty or have been convicted at trial.

Read more at the FBI’s website.

Written by Alyssa Gerace

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