A North Carolina home healthcare provider was sentenced to 45 months in prison for stealing more than $1 million from two elderly clients in her care. In addition to the prison term imposed, she was ordered to serve three years under court supervision and to pay $1,088,554.99 as restitution.
According to information contained in court documents and court proceedings, from December 2018 to April 2020, the provider owned and operated a business that provided home healthcare in two North Carlina counties. Beginning in December 2018, she arranged to provide home healthcare services to two elderly clients, identified in court documents as S.A. and P.R., who were 86 and 90 years old, respectively. The two elderly clients lived in Asheville and were close friends. P.R. also suffered from dementia and was not capable of handling his affairs. S.A. served as P.R.’s power of attorney and managed and controlled P.R.’s finances.
According to court documents, home healthcare services were provided to S.A. and P.R. all of 2019 and into 2020. During that time, the provider did not give them detailed invoices of her services. Instead, she orally informed S.A. on a weekly basis how much money she claimed she was owed for services rendered, and S.A. wrote checks in those amounts from P.R.’s bank accounts. Over the course of the scheme, she defrauded the elderly victims in a number of ways, including by overbilling them for services that were inflated or never provided; double-billing them for other services such as cleaning and moving that were either not provided or were provided by caregivers during hours already billed; and by billing at a higher rate than what she and the victims had agreed upon.
According to court documents, from December 2018 through April 2020, the provider directed S.A. to pay, and did receive, $1,465,546.99 for home healthcare and other services allegedly rendered to the victims. The actual fair market value of the services provided to the victims was $376,992. She overcharged S.A. and P.R. $1,088,554.99 for services that were never provided, and used the money to purchase vehicles and ATVs, to buy luxury retail items, and to pay for hotel stays and vacation rentals.
According to court records, when the provider learned she was being investigated by the FBI and IRS, she made a number of false statements to federal agents related to her business activities. For example, she lied about issuing IRS Form 1099s to her employees, lied about purchases she made using the victims’ money, and lied about additional income she received from another client. In addition, after she was served with a grand jury subpoena requiring her to produce certain business records, she fabricated such records and generated false invoices based on the amounts she believed she had received from S.A. and P.R. rather than providing invoices for actual services rendered.
Compliance Perspective
Issue
Elder financial abuse is a significant and growing problem. A 2019 review of studies from around the world estimated that 13.8 percent of older adults living in nursing homes, assisted living communities, and similar settings experience financial abuse. Financial losses due to financial abuse are typically greater when the older adult knows the perpetrator. Financial abuse takes many different forms. Someone with a legal obligation to handle a resident’s finances may fail to use the funds for necessities like food, clothing, shelter, and healthcare, putting the resident at risk of harm. People with legal obligations to handle finances include fiduciaries such as agents under power of attorney, trustees, guardians, conservators, Social Security representative payees, and Department of Veterans Affairs (VA) fiduciaries. If family or other individuals step in to manage a resident’s finances, some may try to take money or assets for themselves, which can seriously impact the resident’s finances and may result in an inability to pay their nursing home or assisted living community bills.
Discussion Points
- Review your policies and procedures for accurate billing and provision of services. Also review your policies and procedures for working with residents’ financial caregivers. Ensure that your policies are reviewed at least annually and updated when new information becomes available.
- Train appropriate staff on how to determine each resident’s level of care and if services provided are reasonable and necessary. Also train appropriate staff to monitor payments to the nursing home or assisted living community, as unpaid bills may be a result of financial abuse of the resident. Document that these trainings occurred, and file the signed documents in each employee’s education file.
- Periodically perform audits to ensure that services being billed are necessary, accurate, and that there are no inconsistencies. Also audit to ensure that residents’ bills are being paid, and that resident financial caregiver documentation is on file, such as copies of a power of attorney instrument, Social Security representative payee authorization, or a guardianship court order. Staff should be aware of compliance and ethics concerns and understand their responsibility to report any violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
