A former office manager and bookkeeper for a Rhode Island medical practice was sentenced to more than two years in federal prison for misappropriating nearly $570,000 in medical practice funds and more than $11,000 in Training Temporary Disability (TDI) benefits she fraudulently applied for and received, announced United States Attorney Zachary A. Cunha.
The defendant, 59, pleaded guilty to two charges of wire fraud and one count of conspiracy to commit healthcare fraud. She received a sentence of 27 months in prison, followed by three years of federal supervised release. At the government’s request, she was also ordered to pay restitution totaling $579,857 to the medical practice, an insurance company that covered part of the loss, and the Rhode Island Department of Labor and Training’s TDI Benefits program.
According to court documents, the defendant, who managed all aspects of the medical practice’s finances, developed and executed schemes to add family members and friends as unauthorized paid employees. She also collected patient co-payments and other business funds to pay her own personal expenses, including tens of thousands of dollars in personal credit card debt, wireless phone bills, and college tuition payments for a family member.
After her fraud was discovered, the defendant went on medical leave. Following the expiration of her leave, she was terminated and applied for TDI benefits, which she received. Despite starting new employment shortly thereafter, she continued to report to the Department of Labor and Training that she was unable to work, leading to further unauthorized TDI payments.
Compliance Perspective
Issue
The Centers for Medicare & Medicaid Services (CMS) requires skilled nursing facilities to have a compliance and ethics program that is effective in preventing and detecting criminal, civil, and administrative violations under the Social Security Act, and in promoting quality of care. Nursing facilities should establish a double-check system for all monetary transactions, ensuring that a second party reviews and approves all transactions to prevent misappropriation of funds. Routine audits of monetary transactions should be conducted at each facility, with the results reported to the compliance and ethics committee and the governing body. The audits should have a corrective action plan to address any identified discrepancy, and all discrepancies should be investigated and rectified immediately.
Discussion Points
- Regularly assess your compliance and ethics program, as well as your facility’s policies on accounting and the use of facility and resident funds. Make updates as necessary.
- Train all staff on compliance and ethics policies upon hire and at least annually. This training should cover their responsibilities to identify and promptly report concerns about fraud, waste, or abuse of funds. Ensure that appropriate staff receive specific training on financial accounting and the proper handling of facility and resident funds. Document all training sessions and retain signed acknowledgment forms in each employee’s education file.
- Conduct periodic audits to verify that all monetary transactions are double-checked and approved by a second party. Ensure that an independent audit is performed at least annually. Additionally, assess staff understanding of reporting procedures in cases of suspected theft, including the use of an anonymous hotline. Follow up on audit findings to ensure that corrective actions are implemented effectively and any issues are resolved promptly.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
