A California man pleaded guilty on February 3 to healthcare fraud, aggravated identity theft, and money laundering in connection with a years-long scheme to defraud Medicare of over $17 million through fraudulent hospice and home healthcare companies.
According to court documents, the 43-year-old defendant from Granada Hills, California, operated the scheme with others to establish a series of sham hospice companies. They impersonated foreign nationals as the supposed owners of these businesses, using their stolen identities to open bank accounts and sign property leases. The conspirators then submitted false and fraudulent Medicare claims for hospice services that were neither medically necessary nor actually provided.
As part of the scheme, the defendant and his co-conspirators misappropriated the personal information of doctors, falsely claiming that these doctors had certified hospice services as necessary. In reality, the individuals supposedly receiving hospice care were not terminally ill and had never requested or received services from the fake hospices. This led Medicare to pay nearly $16 million to the fraudulent hospices.
The defendant personally received nearly $7 million from the fraud, including over $5.3 million in transfers to his personal and business bank accounts. These funds were laundered through multiple shell and third-party accounts. Additionally, the defendant admitted to illegally obtaining over $1 million for his home healthcare agency by using a doctor’s name and identifying information to certify Medicare beneficiaries for home healthcare. In an attempt to conceal his actions, he paid the doctor $11,000.
The defendant pleaded guilty to healthcare fraud, aggravated identity theft, and money laundering. He is scheduled to be sentenced on April 14 and faces a mandatory two-year prison sentence for aggravated identity theft, up to 10 years for healthcare fraud, and up to 20 years for money laundering.
Compliance Perspective
Issue
Submitting claims for payment to Medicare or Medicaid that are known or should be known to be false or fraudulent is illegal. This includes the falsification of documents, incomplete or inaccurate documentation, failure to provide documented care, or other deceptive acts. All medical services must be medically necessary, and the patient or resident must be eligible for and involved in the decision regarding those services. For hospice services, individuals must meet specific criteria, including having less than six months to live. For home health services, it is crucial that all claims reflect services that are appropriately documented, reasonably necessary, and provided to patients who meet the eligibility criteria for Medicare or Medicaid home health benefits. Services must be delivered as documented, and proper certification of patient eligibility is required. Providing unnecessary medical services or submitting false claims to Medicare is a violation that can have serious legal and financial consequences. Such fraudulent activity not only harms the integrity of healthcare systems but also diverts valuable resources from patients who truly need them. Failure to promptly report a false claim may result in lawsuits, fines, and other sanctions.
Discussion Points
- Regularly review and update policies and procedures related to hospice and home healthcare services to ensure they are accurate, current, and align with both regulatory requirements and best practices.
- Train staff on the criteria for enrolling residents in both hospice and home healthcare programs, making sure that they understand the procedures for both making and receiving referrals. Emphasize the importance of ensuring that the services provided are medically necessary, appropriately documented, and that eligibility is verified. Training should include how to report concerns or suspected violations of regulations, with an emphasis on the need for timely reporting to prevent fraud.
- Conduct periodic audits to ensure that residents enrolled in hospice and home healthcare meet the established eligibility criteria and that all services provided are medically necessary. Verify that services are properly documented and aligned with residents’ needs. Routine audits of documentation, billing, and claims should be conducted to detect errors early, thus preventing the submission of false claims to Medicare or Medicaid.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
