Home Care Medicaid Fraud Developments in Texas, North Carolina, and Kansas
May 9, 2014 12:28 PM
The National Council on Medicaid Home Care – a NAHC affiliate - reports on recent developments in home care Medicaid fraud and abuse, including: 1) alleged owner and advocate personal care services fraud in Texas; 2) alleged owner/operator fraud in North Carolina; and 3) alleged personal care services caregiver fraud in Kansas.
As reported by the U.S. Attorney’s Office of the Southern District of Texas, on April 25, Jeffrey Parsons and David Edson were charged in 13 counts for conspiracy to pay kickbacks to personal care home owners and patient advocates. Both worked for Continuum Healthcare LLC (Continuum) ”Parsons was the vice president of operations, while Edson was the vice president of development. According to the indictment, Continuum owned and operated three Houston area community mental health centers.
Parsons and Edson allegedly billed Medicaid for mental health services that were either unnecessary or not rendered. Additionally, Parsons and Edson gave kickbacks to several personal care homeowners and patient advocates in return for Medicare referrals. In addition to Parsons and Edson, the indictment charged six personal care homeowners and two patient advocates.
The indictment alleges that Continuum billed Medicare and Medicaid nearly $70 million as a product of the kickbacks. Of that amount, approximately $3.4 million was billed to Medicaid.
All defendants face charges of conspiracy to solicit or receive kickbacks in connection with a federal benefit program from March 2005 through April 2012. Parsons and Edson are additionally charged with money laundering for engaging in monetary transactions in criminally derived property greater than $10,000, and payment and receipt of healthcare kickbacks. The conspiracy and kickback charges each carries a maximum five-year prison sentence, while the money laundering charge carries a maximum ten year penalty. Additionally, a maximum $250,000 fine could be brought with the convictions. The trial is currently set for June 9.
To see the press release, click here. To see the indictment, click here.
As reported by the U.S. Attorney’s Office of the Middle District of North Carolina, on April 10, Claude Arthur Verbal II pled guilty to healthcare fraud and money laundering from July 2009 through July 2012. Verbal was the owner and operator of Infinite Wellness Concepts (IWC), a behavioral health provider in North Carolina reimbursed by Medicaid. Verbal had defrauded Medicaid of at least $1 million. He also pled guilty to tax fraud associated with falsifying tax returns while the owner and operator of a tax return preparation company.
Verbal’s fraudulent schemes included: 1) upcoding; 2) falsifying the number of patients treated in group therapy sessions; 3) billing for services not rendered; 4) forging treatment notes and therapist signatures on these notes; 5) having unqualified personnel administering therapy; and 6) falsifying clinical assessments and having unqualified providers create and sign clinical assessments.
Verbal used the defrauded funds to pay for personal purchases including homes, luxury cars, and jewelry, the latter including a $52,000 diamond ring. Authorities seized almost $770,000 from Verbal’s bank accounts, as well as a 2011 Toyota Camry and four pieces of diamond jewelry.
On April 9, Verbal pled guilty to one count of healthcare fraud, one count of money laundering, one count of conspiracy to defraud the United States, and one count of aiding and assisting the preparation of false tax returns. Verbal faces a maximum sentence of 28 years in prison and $850,000 in fines. He will also pay restitution to Medicaid and the Internal Revenue Service (IRS).
To see the press release, click here. To see the April indictment, the state’s factual basis document, and the plea agreement, click here, here, and here.
As reported by the United States Attorney’s Office for the District of Kansas, on April 9, Doris Betts was indicted for allegedly receiving over $587,000 in fraudulent Medicaid bills when working as a personal care attendant from approximately January 2008 through December 2013. She was charged with six counts of health care fraud for fraudulently billing for services for seven Medicaid beneficiaries through four separate billing agencies. These services included day support, residential support, personal services, and sleep cycle support. For full definitions of these services, see pages 4-6 of the indictment, here.
Specifically, Betts allegedly: 1) billed for services rendered to two or more beneficiaries at the same time; 2) billed for services while the supposed beneficiary was in the hospital; 3) billed for services during her own medical appointments; and 4) billed for back-to-back services provided at different locations without accounting for travel time. She also allegedly billed for work days exceeding 24-hours on over 750 occasions. For more than 120 of those days, she allegedly billed for over 30 hours.
Ms. Betts faces a maximum sentence of 10 years in prison and a $250,000 fine. The date for her trial is currently set for June 17.
To see the press release, click here.
While consumer-directed care programs 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. Agency directed home care fraud, while less common, also takes place. 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.
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.
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.