Michigan Home Health Agency Assistant Director of Nursing Sentenced to Three Years for Role in Paying Kickbacks With $1.6 Million in Billings to Medicare

The assistant director of nursing of a Michigan home health agency, Juan Yrorita, age 63, was sentenced to 36 months in prison on March 29, 2018 by U.S. District Judge Drain for his role in a case involving approximately $1.6 million in Medicare claims for home health services that were procured through the payment of kickbacks, and that were also allegedly medically unnecessary and not provided.

Mr. Yrorita plead guilty after four days of trial to one count of conspiracy to commit health care fraud and wire fraud. As part of his guilty plea, Mr. Yrorita admitted that his co-conspirators at Anointed Care Services (Anointed), a Detroit-area home health agency, paid kickbacks to recruit Medicare beneficiaries.  Mr. Yrorita further admitted that as Anointed’s assistant director of nursing, he falsified medical records to support Anointed’s fraudulent claims to Medicare for services that were medically unnecessary and never provided. According to the evidence at trial, Anointed submitted approximately $1.6 million in false and fraudulent claims to Medicare. 

Chicago Marketer Convicted of Violating Anti-Kickback Statute for Receiving Money in Exchange for Marketing and Referring Elderly Patients to Home Health Company. Marketing Is Risky Business Unless Done Right.

Marketing for home health businesses and other health care providers is subjected to many federal and state statutes and regulations. Violation of those laws is a crime. Often people will ask "how can marketing can be a crime where the services were provided?" 

The marketing is so pervasive in the home health and hospice businesses that it is often difficult to persuade those in the business that just because everyone engages in "marketing" does not mean that it is legal. I spend hours in privileged attorney-client meetings trying to convince home health clients that their marketing model must be changed or they risk criminal prosecution, loss of licenses and their business. Often they do not know any other way of growing and keeping their business and do not understand the importance of compliance. It is an outdated model and a risky one. I would rather represent someone in compliance than work on a criminal investigation or Indictment but business models are not easy to change.

The federal and state governments are taking an aggressive stance towards marketing in home health.  This case shows how these cases are prosecuted.  Out of one home health business there were 11 convictions of marketers, nurses, doctors, office managers and owners of the home health business. The services were provided. That was not the issue. The issue was the marketing. Plain and simple.

On Mach 22, 2016, after a three-day "bench trial" where a jury was waived, U.S. District Judge Darrah convicted a Chicago marketer Jenette George of taking illegal payments in exchange for referring elderly patients to an Illinois home healthcare company Rosner Home Healthcare Inc. (Rosner). The government used a cooperating defendant to tape and record Ms. Rosner in order to provide hard evidence against her.

Ms. George was convicted on two counts of violating the federal Anti-Kickback Statute, and one count of conspiracy to violate the statute. Sentencing is scheduled for August 10, 2016, at 1:30 p.m.

Between January 2008 and July 2012, Rosner officials paid marketing payments (which the government calls "kickbacks and bribes") to doctors, marketers, medical office employees and nurses to refer patients to Rosner.  The marketing payments did not comply with the law which makes each of the billings that arose out of the marketing a "false claim." The government's view is that the referrals enabled Rosner to bill Medicare for home healthcare treatment that it subsequently provided.

“Physicians did not refer patients to Rosner; Defendant [Jenette George] did,” Judge Darrah wrote in an opinion supporting the verdict. Thus, Judge Darrah saw that while the physicians wrote referrals for home health a marketer decided what agency was selected based upon the amount of compensation she received rather than what is based for the patient. 

This is part of the reasoning behind the anti-kickback laws. One other reason for the rules is that marketers (and home health companies) may encourage physicians to order home health services that are not medically necessary so they can earn more  income.

Rosner has since closed. Ms. George operated Ttenej Senior Referral Agency, which provided senior citizens with referrals to home healthcare firms in the Chicago area.  Evidence at her three-day bench trial in October 2015 revealed that Ms. George received approximately $500 from Rosner for each patient she referred to the company.  

In one undercover surveillance video presented at trial, Ms. George is seen counting out the cash that she received from Edgardo Hernal, a former Rosner employee who by then was cooperating with federal authorities.  Evidence at trial further showed that nurses at Rosner regularly put false information into patient charts to make Rosner’s services appear to be medically necessary, and to make patients appear to be sicker than they actually were.

Woman Excluded By OIG Indicted For Health Care Fraud for Failing to Notify Employer Home Health Agency of Her OIG Exclusion

In the past, individuals and entities excluded by the Office of Inspector General (OIG) have usually not been prosecuted for fraud. A recent Indictment shows that the government is going to be more aggressive in pursuing individuals excluded by OIG if they fail to notify their employers of their exclusion. 

If OIG excludes an individual or entity it means that no payment can be made by a federal health care benefit program (or state program that received federal funds) for services provided by that individual. 

The United States Attorney’s Office for the Middle District of Pennsylvania announced on March 31, 2016 that China Scott of Pennsylvania was indicted by a federal grand jury for Health Care Fraud for allegedly failing to notify her employer at Cool Waters, a home health care agency that she was an "excluded person" by OIG. Ms. Scott was excluded by OIG due to two previous health care fraud convictions.

According to the Indictment, between November 2015 and January 2016, Ms. Scott provided home health care services to a disabled individual through her employment at Cool Waters, a home health care agency. Since Ms. Waters is an excluded individual, the home health agency cannot receive payments from Medicare or Medicaid or other federally funded programs for her services and must return any payments. Ms. Scott allegedly failed to notify the agency that she is an excluded person.

Indictments and criminal informations are only allegations. All persons charged, including Ms. Scott, are presumed to be innocent unless and until found guilty in court. The investigation was conducted by the U.S. Department of Health and Human Services.

Attorney Commentary: This is a reminder to those in the health care business to run background checks on their employees, independent contractors, and employees of independent contractors who provide services. And simply because Medicare or Medi-Cal or Medicaid is not being directly billed, there are many government programs through HMO contracts, TriCare and other entities that it is very difficult to tell when a patient is Medicare or Medi-Cal (Medicaid) or TriCare.  

In addition, individuals should also check their background since we have seen cases where individuals were excluded and did not know for reasons such as student loan defaults. Finally, if excluded, individuals and entities need to remember that they must apply for reinstatement. It is not automatic. 

Posted by Tracy Green, Esq.

Nation’s Largest Nursing Home Therapy Provider (Kindred/Rehabcare) Pays $125 Million to Settle Civil False Claims Act Allegations For Physical, Speech and Occupational Therapy Services Improperly Billed to Medicare

Skilled nursing facilities (SNFs) face many challenges in providing, documenting and billing therapies (speech, occupational and physical) to its patients. A recent large settlement in a false claims case brought by former employees, where the government intervened, against the nation's largest nursing home therapy provider shows other SNFs and therapy providers what they need to monitor in order to avoid similar allegations.

On January 12, 2016, contract therapy providers RehabCare Group Inc., RehabCare Group East Inc. and their parent, Kindred Healthcare Inc., agreed to pay $125 million to resolve a government lawsuit alleging that they violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary and skilled, or that never occurred.

The government’s complaint alleged that RehabCare’s policies and practices, including setting unrealistic financial goals and scheduling therapy to achieve the highest reimbursement level regardless of the clinical needs of its patients, resulted in Rehabcare providing unreasonable and unnecessary services to Medicare patients and led its SNF customers to submit artificially and improperly inflated bills to Medicare that included those services.  Specifically, the government’s complaint alleged that RehabCare’s schemes included the following:

(1) Presumptively placing patients in the highest therapy reimbursement level, rather than relying on individualized evaluations to determine the level of care most suitable for each patient’s clinical needs;

(2) During the period prior to Oct. 1, 2011, boosting the amount of reported therapy during “assessment reference periods,” thereby causing and enabling SNFs to bill for the care of their Medicare patients at the highest therapy reimbursement level, while providing materially less therapy to those same patients outside the assessment reference periods, when the SNFs were not required to report to Medicare the amount of therapy RehabCare was providing to their patients (a practice known as “ramping”);

Los Angeles Fire Department Inspector Pleaded Guilty To Accepting Bribes From Small Nursing Care Facilities

On September 23, 2009, Dennis Martin Archie, a Los Angeles Fire Department inspector, pleaded guilty to accepting a bribe. Mr. Archie was charged in July by the Los Angeles County District Attorney's Public Integrity Division with soliciting and accepting bribes from operators of small nursing care facilities run out of private homes in the San Fernando Valley.

According to the felony complaint, Mr. Archie, a career firefighter, had been assigned to the San Fernando Valley as a fire inspector. He worked out of the Van Nuys office and part of his job was to inspect small nursing homes for the elderly that were operated out of private homes. Mr. Archie was charged with accepting or soliciting bribes ranging from $500 to $2,000 from seven victims in 2008 and this year. Prosecutors said some operators paid him in exchange for clearances and some did not. The victims operate homes in Reseda, Northridge, Winnetka, Burbank, Chatsworth and West Hills.

Under the plea, Mr. Archie is facing six months in jail and a $10,000 fine when he returns on October 7 for sentencing in the early disposition court before Judge David Horwitz. In exchange for his plea, the other seven felony counts will be dismissed when he is sentenced.

Attorney Comments: One collateral consequence for the nursing homes that paid the bribes could be a negative effect on their licenses. Where there have been bribes that were later discovered, the health care providers have had trouble with licensing and certification. Providers must understand that paying bribes to federal or state officials are serious offenses. Obtaining a license or certification through a bribe -- even if solicited -- is extremely dangerous. If you are solicited, you should contact an attorney immediately and determine how to proceed.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. Their website is: http://www.greenassoc.com/