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Government Tackles Skyrocketing Scams In Medicare Billing For Home Care

Fraud in the home health care services sector – where Medicare spends $18 billion annually for home health-related services – is officially in the hot seat for government scrutiny.

In a concerted effort to tackle what has been considered rampant fraud, waste and abuse, the Centers for Medicare and Medicare Services extended moratoriums on new ambulance and home health care providers three times since mid-2013. These moratoriums, which the Affordable Care Act authorizes regulators to use, have covered major metropolitan and surrounding areas, including Florida, Illinois, Michigan, Texas, Pennsylvania and New Jersey. Originally, CMS’ justification for the bans included increased levels of fraud and unusually high ratios of providers to beneficiaries. Government attorneys have credited the most recent ban extension of January 2015 towards helping prosecutors address the extensive and time consuming nature of criminally investigating these scams.

Other states like Louisiana, a top five state for average home health payment per Medicare beneficiary, are spotlighting home health-care fraudsters with increasing urgency. Kenneth A. Polite Jr., U.S. Attorney for Eastern Louisiana, has announced that across Louisiana, home health-care schemes have become “the greatest and most significant trend” in health-care fraud in Medicare. As a result, Polite is launching a counteroffensive against these skyrocketing scams.

Louisiana’s most notable indictment emerged in March 2015, when 20 individuals – including not just ringleaders, but management, nurses, doctors, and marketers alike – were charged in a $30 million alleged conspiracy involving a company called Abide Home Care Services Inc. Lengthy sentences and millions in illegitimate payments are being pursued. Other recent takedowns in Louisiana include the indictments of three individuals in connection with an alleged $33 million fraud involving Christian Home Health Care Inc., as well as the indictments of a dozen individuals in connection with an alleged $50 million scam involving Interlink Health Care Services Inc. and other home health companies.

Fundamentally, the intended beneficiaries of the home health care benefit are those individuals who have trouble leaving home due to long-term disability or recent medical procedures. However, home health schemers are marketing and billing this benefit by certifying that at-home visits to patients are necessary, even though these patients are not, in fact, homebound. In addition, these at-home visits are upcoded and billed to Medicare as having required more skilled, complicated, and time consuming services than what is needed or actually performed.

Prosecutors’ tactics in identifying fraudulent upcoding are also increasing in sophistication.  In building a case against Abide, for example, prosecutors used data analytics to establish findings that Abide was a top biller country-wide for several highly specific diagnoses that require steep payments to home health agencies. As Polite’s lead health fraud prosecutor Patrice Sullivan has explained: “The idea that [Abide’s] patient population has a bucketful of [lucrative] diagnoses – it’s even more than an anomaly, it’s statistically impossible.”

Government attorneys are not alone in their mission to crackdown on shady Medicare billing for home care. In Louisiana, the recent cases have been investigated with the help of special a special “strike force,” the FBI, and the U.S. Department of Health and Human Services’ Office of Inspector General.

U.S. Attorney Polite has stated that there is no end in sight for indictments, with several home health indictments pending and more likely to materialize throughout 2016.

Cardiologist Sentenced To 20 Years Following Conviction For Fraud In Billing Medicare And Private Insurers For Medically Unnecessary Tests And Cardiac Procedures

An Ohio cardiologist who was convicted by a jury of engaging in a $29 million dollar healthcare fraud scheme was sentenced on December 18, 2015 to 20 years in prison.  Harold Persaud, M.D. had run his own medical practice and also had hospital privileges at three Ohio hospitals.  The government alleged and presented evidence that over approximately six years, from 2006 to 2012, Persaud not only used erroneous, more expensive billing codes to bilk insurers into overcompensating his practice, but also subjected his patients to unnecessary diagnostic tests and procedures. 

The Government’s case emphasized the fact that Persaud’s scheme was both well-calculated to lead to overpayment, and placed the health of his patients in jeopardy.  For example, in some instances, Persaud reported false test results in order to justify the placement of cardiac stents in patients, resulting in medically unnecessary invasive procedures.  Persaud also referred patients for unnecessary coronary bypass surgeries, which allowed him to then perform expensive follow-up testing.  While the government placed the intended loss of Persaud’s scheme at $29 million, the evidence indicated that Persaud personally realized approximately $5.7 million. 

The FBI started its investigation in 2012.  The three hospitals where Persaud provided care and performed procedures started their own investigations into the propriety and necessity of Persaud’s procedures.  The government’s investigation resulted in a multi-count indictment, to which Dr. Persaud maintained his innocence through trial. 

Following a four week jury trial, Persaud was found guilty of one count of health care fraud, one count of engaging in monetary transactions with property derived from criminal activity, and 13 counts of making false statements.  At his sentencing hearing Persaud did not embrace contrition.  Rather, in an over 30 minute dialogue, Persaud asserted that he could explain why he performed each of the procedures.  A restitution hearing is scheduled for January 2016.  Persaud also faces civil suits arising from his fraudulent scheme.   

U.S. District Judge Donald Nugent’s twenty year sentence demonstrates the significant consequences for health care practitioners who cannot appropriately and adequately demonstrate the medical necessity for medical procedures, particularly where the fraudulent conduct does not simply result in higher reimbursement, but unnecessarily jeopardizes the health and safety of patients.