Another fraud case brings indictments
Federal grand jury hits jackpot in south Florida
Beware of home health care subcontractors bearing gifts. Especially if the gifts involve staffing pools, milk, or Medicare.
On Aug. 7, the United States Attorney for the Southern District of Florida (Miami) announced a federal grand jury has returned a 102-count indictment "outlining a $15 million fraud that charges 12 defendants, including two healthcare administrators and five physicians, in the nation’s single largest home healthcare fraud scam." The defendants face charges of conspiracy, fraud, and money laundering.
The indictment says former Mederi of Dade County (Coral Gables, FL) administrator Susan Regueiro and Leopoldo Perez, a former assistant administrator of Mederi-Dade and former administrator of Mederi of Miami Lakes, "created and masterminded a large network of bogus nursing groups" while they were employed by Mederi. The two allegedly held "hidden ownership interests" in these groups in partnership with four other defendants. The defendants are accused of using the nursing group to fraudulently submit Medicare billings through Mederi "for home healthcare services for persons who they knew were not qualified to receive those services and for whom they knew little or no services were ever provided."
According to company attorney Michael Flanagan of Gardner, Carton & Douglas of Washington, DC, the parent company, Mederi of Miami, is not accused of wrongdoing in this indictment. In fact, "the principals cooperated with the government," says Flanagan. And in December 1992, the parent Mederi shut down both the Coral Gables and Miami Lakes sites as a result of the problems.
Flanagan, who has represented the home care industry for 15 years, says the indictments are the result of a five-and-a-half-year investigation of so-called "staffing pools" in the Miami area.
Flanagan says these nursing pools somehow "gained control over groups of elderly beneficiaries and would then go to Medicare-certified home health agencies and say they had a book of patients and would give them to the agency in return for using their [pool’s] nurses."
Staffing pools weren’t Medicare-certified
Size of the nursing pools varied, according to Flanagan, but they had one thing in common. "None were certified to provide Medicare services directly. They had no Certificate of Need as the state of Florida requires."
Medicare permits subcontractors, Flanagan acknowledges, at least for now. "But Medicare says a home health agency should not be set up as a billing conduit. If you are doing what they [pools] were doing, an agency could be construed as a conduit.
"As best as we can reconstruct things, the staffing pools were giving free benefits to elderly Medicare beneficiaries, like milk or cleaning the house, in return for getting their health insurance numbers. They would go to a retired doctor and the doctors would sign plans of treatment for patients who weren’t theirs."
Flanagan says there is no evidence the doctors were receiving payments.
There was also evidence that Medicare was billed by agencies for services not rendered, although as far as the agency knew, explains Flanagan, the visits were made. "For example, if five nursing visits were required, the patient got three, and Medicare was billed for five.
"It is still unclear as to the full extent of the fraud," he says, "but if you look a the volume of services during 1990-91-92, you would see a dramatic rise in the number of Medicare-paid home health visits in Dade County."
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