Home Care Medicaid Fraud Developments in Illinois, New York, Virginia, and Texas
January 28, 2014 10:17 AM
The National Council on Medicaid Home Care – a NAHC affiliate - reports on recent developments in home care Medicaid fraud and abuse, including: 1) convicted beneficiary fraud in Illinois; 2) a settlement of alleged home care company fraud in New York; and 3) convicted caregiver fraud in Virginia and Texas.
As reported by the US Attorney’s Office for the Southern District of Illinois, on January 10, Valerie Johnson was sentenced to five years probation, ordered to pay $7,842.26 in restitution, and a special assessment of $100, for one count of Health Care Fraud. Specifically, the defendant had submitted false and fraudulent bills for receiving personal assistant services via the Home Services Program. While the services were supposed to be performed by her son, her son was residing approximately 225 miles away.
To see the press release, click here. To see an article about the case, click here. To see previous Council articles on Medicaid home care fraud in Illinois, and on Illinois’ Home Services program, click here, here, and here.
As reported in the Rochester Business Journal, on January 1, HCR Home Care (HCR) entered into a settlement agreement with the State of New York (the State) for Medicaid fraud charges by paying $2.5 million plus interest. The State alleged in the settlement agreement that, from 2002 to 2006, HCR billed for “unallowable costs” including costs associated with company vehicles, country club dues for executive employees, interest on business loans, and marketing. Additionally, the State alleged that HCR billed for home health aide services not rendered at one of its adult care facilities. The State also alleged that HCR employed 23 uncertified home health care aides who billed around 6,500 hours of work.
HCR was reportedly unaware that it had uncertified aides until the investigation began. During the investigation, HCR stated it unknowingly submitted false timesheets for aides that had inflated their hours. As part of the settlement, HCR agreed to not publically deny the facts alleged by the State in the agreement.
To see the full Rochester Business Journal article, click here. To see the full settlement agreement, click here.
As reported by the US Attorney’s Office for the Western District of Virginia, on December 20, mother and son Sandra and Travis Bugg were sentenced to 36 months of probation and $5,472 in restitution for billing Medicaid for services not rendered. Additionally, Travis Bugg will be excluded from billing Medicaid and Medicare for 5 years. They had previously pled guilty to making a materially false statement in writing involving a healthcare benefit program.
On December 16, Tammy Allen pled guilty to health care fraud and making a materially false statement in writing involving a healthcare benefit program. She admitted to fraudulently billing Medicaid for services not rendered for three home visits. She faces a maximum 10-year prison sentence.
According to the US Attorney’s Office,
Sandra Bugg received eligibility to receive Medicaid services through the Medicaid Consumer Directed Program for the elderly and disabled, which allows the person who receives the care to hire their own personal care assistant, regardless of their qualification. As a result, Sandra Bugg hired her son, Travis Bugg, to serve as her personal care assistant. During this time, Tammy Allen, a registered nurse, was hired to act as a service facilitator to determine the number of hours of care a recipient is entitled to receive and to provide home visits for Sandra and Travis Bugg. Travis Bugg has admitted that between September 2011 and January 2012, he billed Medicaid for 88 days of work as his mother’s personal care assistant for which he did not work. Sandra Bugg has admitted to signing the time sheets showing her son working those 88 days when, in fact, she knew he had not been at her home those 88 days.
To see the press release, click here.
As reported by the US Attorney’s Office for the Southern District of Texas, on December 18, Debra Jean Velasquez and Sylvia Salinas Ramirez were sentenced to 51 and 41 months in prison, followed by two years each of supervised release, for wire fraud and conspiracy to commit wire fraud.
Specifically, they conspired to defraud the Texas Medicaid program by falsely billing home health payments. In September, the defendants had pled guilty to the charges. The total amount of the fraud was $155,127.72, and the defendants have agreed to pay that amount in restitution.
From August 2009 through June 2010, the defendants, while employed by MRNG, Inc. doing business as Caring Touch Home Health (Caring Touch), falsely billed Texas Medicaid and two Medicaid funded managed care organizations (MCOs), Evercare of Texas LLC and Superior Health Plan, Inc. The defendants admitted to creating false and fraudulent time sheets for services never rendered by Caring Touch employees, and then fraudulently billing Medicaid and the MCOs for these services.The defendants billed approximately 562 of these by wire.
The defendants also admitted to creating false and fraudulent payroll records from the false and fraudulent time sheets, which they in turn submitted to payroll staff. After the defendants received payroll checks, they fraudulently endorsed them and then cashed the checks for themselves. Neither Caring Touch nor the employees whose names were used on the time sheets and checks were implicated in the case.
To see the press release, click here.
As Medicaid home care spending increases, anti-fraud efforts have focused more resources in a variety of “risk areas.” Recent prosecutions have highlighted serious program integrity weaknesses in both consumer-directed and agency models of home care. These prosecutions include many cases of billing for services never rendered and include allegations of beneficiary complicity as well. Often family members are involved.
It appears that the concerns with billing for services never rendered are especially acute in consumer-directed care programs. While these types of home care delivery models provide an important level of control to the client, they also run a higher risk of fraud, particularly where the caregivers are from the client’s family. These risks may provide home care agencies with an opportunity to supply some program integrity oversight along with caregiver training and supervision. At the same time, agencies should guard against Medicaid programs promulgating new regulatory measures that affect agency-model and consumer directed care equally.
It can be anticipated that investigations and prosecutions will continue for some time to come as states share information and strategies. Home care companies doing business with Medicaid would be well served if they redouble their internal program integrity efforts. Home care companies should use service attendance and documentation systems that provide reliable ways to validate any self-submitted information. Further, agencies should engage in at least spot checks with recipients to ensure actual delivery of care and continued eligibility for services. In many circumstances, Medicaid will attempt to recover any fraudulent payments from the agency even if the agency is not implicated in the fraud. In addition, the fraud of an employee can create a risk that the employer is also charged with fraud. Home care companies should anticipate future regulatory and legislative action to stem the growing instances of home care fraud, as is seemingly on the horizon in Illinois. Individual caregiver fraud has also led to a movement to require background checks for caregivers.
Increasing regulation and legislation is a typical reaction to health care fraud, as regulators believe that they can solve all problems through another layer of rules. To the extent that there is a need for reforms, it is important to craft sound legislation that protects patients while putting the fewest restrictions on honest caregivers. Stakeholders should actively engage in the process of regulatory and legislative reform through the forums or state advocacy. Home care companies are encouraged to keep abreast of program integrity initiatives in their states, and to contact the Council with any questions or concerns.