California Business Partners in Home Health and Hospice Businesses Sentenced To 33 Months In Federal Health Care Fraud Case. One Partner Was Previously Excluded From Medicare By OIG.

Home health and hospice fraud cases are still priorities in the Justice Department. On April 18, 2019, a former California medical doctor Camilo Q. Primero, age 76, and his business partner Aurora S. Beltran, age 63,were sentenced to 33 months in prison for their individual roles in an alleged Medicare health care fraud case involving three Las Vegas hospice and home healthcare agencies. Both individuals plead guilty and were sentenced following their pleas to conspiracy to commit health care fraud and money laundering.

One of the allegations was that Mr. Primero was excluded from Medicare by the Office of Inspector General and should not have been an owner of any of these health care businesses which were billing the Medicare program. When an excluded individual owns the business all monies billed to the program are potentially recoverable. If the government alleges a "sham" owner, there is the potential of alleging the entire business is a fraud since the government would not have approved the application if it knew that one of the "real" owners was excluded by OIG.

In the plea agreement, they admitted that they filed false enrollment documents with Medicare to enable Mr. Primero to operate hospice and home care agencies through nominees despite his prior exclusion from all federal health care programs. Furthermore, they admitted they submitted fraudulent hospice care claims for people who were not terminally ill and did not require hospice care.

Hospice Care Provider Settles False Claims Lawsuit Involving Allegations that Hospice Paid Doctor for Referrals By Donating To Doctor's Charity

On December 2, 2016, Vitas Health Corporation Midwest and related entities agreed to pay $200,000 to resolve allegations that they violated the False Claims Act and the Anti-Kickback Statute by paying Dr. Farid Fata for patient referrals to its hospice care services.

In an earlier unrelated criminal matter, Dr. Fata pleaded guilty to health care fraud, conspiracy to pay and receive kickbacks and promotional money laundering, and was sentenced to a term of 45 years in prison. 

The allegations in the civil False Claims Act suit were brought to the government by a whistleblower, known as a relator, under the qui tam provisions of the False Claims Act. 

From November 2012 to January 2014, relator Rita Dubois worked at Vitas as the Director of Market Development in Southeastern Michigan. Ms. Dubois’s complaint alleged that from mid-2012 through early 2014, Vitas contributed $15,750 to the Swan For Life Cancer Foundation, which was a cancer charity that Fata established. 

In return, Fata referred 23 patients to Vitas for hospice care, the complaint alleges. The U.S. intervened in the lawsuit.  Ms. Dubois will receive $36,000 out of the $200,000 settlement for her role in filing the qui tam action.

This case was investigated jointly by the U.S. Attorney’s Office for the Eastern District of Michigan and the Department of Health and Human Services, Office of Inspector General.

Attorney Commentary: This is one of the cases where when payments are made to third parties they are deemed to be illegal referral fees. Given that Dr. Fata's criminal case seems extensive and resulted in a long sentence, this was probably a small part of the allegations in the doctor's case. The case against the hospice was not criminal, however, this qui tam case shows that payments to a doctor or his related entities must be viewed carefully and run by compliance counsel. 

The conflict of interest in donating to a doctor's charity create the appearance of payment for referrals. The payment of $200,000 is far less than the costs of trying the lawsuit and the risks of losing so it makes good business sense but it is far better to avoid such situations. 

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Email: tgreen@greenassoc.com
Phone: 213-233-2260

United States Settles Civil False Claims Act Allegations Against Florida Hospice For More Than $3 Million. Case Study - Hospices' Need for Compliance Plans and Audit Issues.

The hospice industry has been under investigation by the Office of Inspector General and the subject of many Medicare health care fraud investigations for the past three years. California and Florida have have numerous investigations pending. These cases can proceed civilly under the qui tam false claims act, criminally or both. A recent case settled civilly which is expected to resolve any potential criminal investigation.

One redflag that triggers investigations is a hospice with patients who have lengths of stays in hospices greater than a year or patients who go from hospice to hospice. The issue in these cases is medical necessity and suspected marketing of patients where patients received hospice care from multiples agencies for over a year or two. Typically, federal healthcare programs only pay for hospice care when patients are in a terminal condition and are expected to live for less than six months. Hospice is intended to be palliative rather than curative.

In Jacksonville, Florida, the U.S. Attorney settled a civil qui tam lawsuit last month in which the government settled with Hospice of Citrus County (“HOCC”) for $3 million in restiution ($3,022,000 exactly). The allegations were that HOCC knowingly submitting false claims to the Medicare and Medicaid programs for medically unnecessary hospice care of more than 50 patients who had lengths of stays greater than 1,000 days. 

Texas Home-Health Agency Owners, Director of Nursing And Marketers Indicted For Illegal Patient Marketing, Providing Unnecessary Services and $13 Million in Alleged Medicare Fraud

The health care fraud cases against home health and hospice owners continue to get filed in federal court. The most recent case is one in which the owners, the director of nursing and patient recruiters of a home-health agency based in Houston were arrested November 10, 2015 for their alleged roles in conspiracies to defraud Medicare, to pay illegal healthcare kickbacks and to commit money laundering in an Indictment filed in the Southern District of Texas.  

According to the Indictment, Ebong Tilong and Marie Neba used the Texas-based, home-health agency that they owned to bill Medicare for home-health services that were not provided or not medically necessary. 

The Indictment then alleges they orchestrated this scheme by paying kickbacks to a series of individuals as follows: 

First, Tilong and Neba allegedly paid illegal kickbacks to physicians in exchange for authorizing medically unnecessary home-health services. 

Second, using the money that Medicare paid for such alleged unnecessary or fraudulent claims, Tilong and Neba allegedly paid illegal kickbacks to marketers (patient recruiters) Daisy Carter and Connie Ray Island in exchange for referring Medicare beneficiaries for home-health services. 

Los Angeles Doctor Charged With Medicare Fraud For Signing Home Health And Hospice Certifications That Were Not Medically Necessary - OIG Investigations Continue

We can expect to see more health care fraud cases involving home health, hospice, physical therapy and occupational therapy being filed in California. These cases also usually involve marketing of Medicare beneficiaries. The Office of Inspector General (OIG) is investigating old cases and seeking to file them even where the billing was done years ago. A recent case involved billing back from 2006.

On June 3, 2014, an Indictment was filed against Dr. Robert Glazer alleging conspiracy to commit health care fraud in violation of 18 U.S.C. §1349, health care fraud in violation of 18 U.S.C. §1347, and aiding and abetting health care fraud from January 2006 to May 2014.  Dr. Glazer is presumed innocent and these are simply allegations in the Indictment. It is alleged that all these certifications for home health, PT and OT and the DME prescriptions resulted in billings to Medicare totaling $33 million which resulted in payments of $22 million. Does this mean that Dr. Glazer received $22 million? Of course not, but in a conspiracy he is liable for the certifications he wrote them and there was not medical necessity.

The Indictment though will show what I see in many health care fraud cases in the Los Angeles area.  First, the doctor allegedly used his clinic to provide medically unnecessary certifications for (1) home health services for nursing, physical therapy and occupational therapy, (2) hospice services, and (3) durable medical equipment for power wheelchairs. 

Medicare coverage for hospice is limited to situations where it has been medically certified that beneficiaries are terminally ill, have 6 months or less to live, and the beneficiary chose hospice understanding that Medicare will not cover treatment intended to cure the beneficiaries' terminal illnesses.

Second, this case involves the marketing of Medicare beneficiaries. A marketer is alleged to be a co-conspirator who recruited Medicare patients for the home health agency and the medical clinic. Patients allegedly received free diabetic shoes and promises of free power wheelchairs. There is a lot of marketing in hospices and the fees paid to marketers are significant. With marketing, any claim will be a false claim but this case goes beyond pure marketing and kickback issues.

Third, this case involved a manager or hidden owner of the Medicare clinic. The Indictment alleges an owner of home health services (Fifth Avenue Home Health) was a manager alleges that the medical clinic provided unnecessary services. In many of these cases, managers and hidden owners are involved.

These fraud cases take years to find their way to court. For physicians who wrote certifications, they are now being held responsible for the billings of third party home health agencies, hospices and DME companies. In some of these cases, the DME companies have been prosecuted and now the government is coming back to charge the physicians, especially now that the individuals who have plead guilty or been convicted are cooperating.

OIG Investigations. If the Office of Inspector General (OIG) has come to your office and requested files by subpoena or request, there is a pending criminal investigation. I have seen many providers not take these subpoenas or investigations seriously and let themselves and their staff interviewed. After a year or two, medical providers may think that these cases have gone away but then find that the investigations are still ongoing. 

It is important to seek expert advice early on in these cases in order to evaluate the legal issues. In some cases, where there is a good defense it may be critical to hire an expert early and present this evidence to OIG or the U.S. Attorney's Office in order to prevent cases from being filed. In other cases, there may be reasons to not disclose this information or evidence and wait to see whether or not charges will be filed. There are many other ways to proceed since each case is different. It is important to have knowledge and understand the allegations, the billing issues and why there is an investigation. This also allows medical providers to plan ahead. 

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
800 West 6th Street, Suite 450
Los Angeles, California 90017
Tel: 213-233-2260
Email: tgreen@greenassoc.com

Recent OIG Investigation Into Hospices Reveals Compliance, Marketing And Kickback Issues

A recent Bloomberg article (Dec. 6, 2011) on hospices and in particular Harden Healthcare LLC  entitled "Aunt Midge Not Dying In Hospice Reveals $14B Market" reveals issues with some hospices and the focus of government investigations. Hospices are meant for the terminally ill and given that Medicare's reimbursement rates are higher for hospice care, this has been a growth industry.

The article relays a story that caught the interest of the Department of Justice. Janet Stubbs' aunt, Doris Midge Appling, was admitted to Hospice Care of Kansas (HCK) during the company’s “Summer Sizzle” promotion drive, which paid employees as much as $100 a head for referrals. Ms. Stubbs said she had no clue that the nursing home doctor who referred her aunt for hospice moonlighted as medical director for the hospice company. The aunt was discharged after 20 months in HCK, and lived four more years before her death in April at age 106. Medicare paid nearly $80,000 for her hospice care. The aunt is now known as Patient 11 in a civil lawsuit filed by the Justice Department against HCK and its owners.

Hospice care, once chiefly a charitable cause, has become a growth industry, with $14 billion in revenues, 1,800 for-profit providers and a base of Medicare-covered patients that doubled to 1.1 million from 2000 to 2009.

The article discusses the investigations pending in the hospice business - and these are often publicly traded companies and national hospice chains. This means that independent owned hospices will also be under scrutiny and will often have less funds to devote to compliance and responding to government investigations. It is therefore critical for hospices to engage in compliance immediately since there is increased scrutiny on the industry.


The compliance issues noted in the article include:
(1) paying salespeople bonuses for increasing the number of patients enrolled and/or length of stay;
(2) admitting ineligible patients;
(3) giving salespeople a budget of $500 a month to buy lunches and gifts for doctors and nursing-facility managers and staff;
(4) paying enrollment bonuses to doctors, admissions directors and branch managers;
(5) giving pizza parties, gift cards and other extras to its registered nurses and social workers for meeting admission targets;
(6) pay to nursing home doctors who double as hospice medical directors; and
(7) paying incentives to medical directors of hospices.


The inspector general of the U.S. Health and Human Services Department is probing hospice marketing practices and financial relationships with nursing facilities. The inquiry was spawned by a 2009 report by the Medpac commission, a congressional advisory body, that found hospices “aggressively marketed” to nursing-home patients, and paid incentives to medical directors for “inappropriate” referrals and enrollments.

Complicated Laws

Under various federal statutes, paying for patient referrals or compensating employees based on the number of Medicare patients recruited may be illegal. But the laws are painfully complicated and loaded with exceptions.  A conservative view of health care laws bars all employees and contractors from earning bonuses based on Medicare enrollment goals, including salesmen and managers. In structuring bonuses, it is critical to seek legal advice from an established and experienced health care lawyer before establishing the parameters.


Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 15-minute consultation.  

Any questions or comments  should be directed to Tracy Green, a very experienced Medicare fraud attorney, Medi-Cal fraud attorney, California health care attorney, and California compliance attorney at tgreen@greenassoc.com.