As Feds Announce Historic Fraud Haul, OIG Report Signals Need for Further Investigations

Beginning Monday at 6 a.m., federal authorities started serving warrants on 61 healthcare practitioners who stand accused of bilking Medicare and Medicaid for more than $900 million, about $150 million of which was traced back to the five-state jurisdiction of the Dallas branch of the Office of Inspector General. It’s the largest sweep in the seven-year history of the Medicare Fraud Strike Force, and it almost certainly won’t be the last.

Mere hours after the final arrest warrant was served on Wednesday, the OIG released a separate data brief highlighting home health providers who filed claims that shared characteristics common in fraud cases. It’s not necessarily proof of fraud; it’s a signal that further investigation is necessary. Twenty-seven geographic areas in 12 states were labeled hotspots for those characteristics.

They included 562 home healthcare agencies and more than 4,500 physicians, about 1 percent of all who supervise home healthcare. But as C.J. Porter, the OIG’s Special Agent in Charge for the Dallas regional office, notes, a single physician can cause an astronomical amount of damage. She points to Jacques Roy as an example—the Rockwall physician has been convicted for lording over an intricate fraud scheme that racked up $375 million in fraudulent claims, the most from a single doctor in the history of the U.S. Department of Health & Human Services.

“You may have 50 other cases in the other sides of the country that are less than that one case,” she said. “When you have that one practitioner who is supposed to be a gatekeeper but is driven by greed and criminal conduct, it can have a tremendous impact.”

According to the data brief, Texas had eight hotspot regions and nearly half (255 of the 562) of the nation’s flagged agencies. The Dallas-Fort Worth-Arlington Metropolitan Statistical Area accounted for 52 agencies and 174 physicians in the report, which only analyzed Medicare claims—not from any other public plan or from private insurance claims.

These agencies and providers filed claims that showed a high percentage of care episodes despite the patient not having recently met with the supervising physician, who generally orders services or hospital stays. The patient also may have had a number of visits from the agency but hadn’t recorded any visits to a nursing home or hospital. The primary diagnoses of diabetes or hypertension could be a signal as well as patients who had claims from multiple home health agencies (one example cited in the report includes six beneficiaries who who received services from 10 or more different home health agencies over a two year period). The final characteristic common in fraud cases are claims that bill for multiple home health readmissions in a short time. In order to be an outlier, the doctor or agency had to meet at least two of these qualifications.

“We’re not suggesting that the providers that we’re looking at are engaged in fraud,” said Adam Freeman, the team leader with the OIG in the Chicago regional office, who helped prepare the report. “Fraud is something that requires intense investigative work, but when we look at the claims data overall, what we can see are various trends to tip off where to look.”

Combined, the data brief and the nationwide sweep shows that the feds are dedicating significant resources to identifying and battling home health fraud. According to Jason Meadows, the assistant special agent in charge in the Dallas office, resources have increased across the board since the Medicare Fraud Strike Force was established in 2009. Meadows, who organized the recent sweep locally, says there are more investigators and prosecutors at the ready.

“Healthcare fraud has gained the attention of lawmakers in Congress and we’ve been allocated more resources. The U.S. Attorney’s Office have allocated more resources. And with more resources, we’re able to prosecute and investigate more cases,” he said.

The Dallas office oversaw 42 arrests in five states—Texas, Oklahoma, Arkansas, New Mexico, and Louisiana. Eleven of those were from the Dallas-Fort Worth Area. They included Harlan Hill, Latecia Hill, and Pearle Madere, who are accused of working together at a North Dallas clinic known as the Total Senior Ear Care to rack up $5.1 million in fraudulent charges to the Centers for Medicare and Medicaid Services. Harlan Hill owned the clinic; Latecia Hill, his wife, was an administrator there; and Madere ran day-to-day operations.

Contracted physicians and assistants would visit nursing homes and “sweep” each facility, meeting with as many as 100 patients a day for no more than five minutes per patient, according to the 15-count indictment. They’d then bill Medicare and Medicaid as if they’d provided “comprehensive ear healthcare and audiological hearing services.” Some patients were unresponsive: “Latecia Hill and Pearle Madere instructed staff that if a patient gave an eye movement or made a sound, the staff could interpret that as consent and proceed with the exam, cleaning, or ear-probe testing.” Other times, they billed for full exams despite performing “cursory exams that had no medical value.”

Another time, Harlan Hill directed staff to bill for services provided by a physician who had resigned in 2015. In some claims, Hill’s scheme billed for more than 24 hours of provided services in a single day attributed to one physician—like on Dec. 23, 2013, when the company billed 227 beneficiaries for 95 hours under one provider code. The feds have seized $85,476.70 in a bank account; a home at 1105 Winding Brook Drive in Garland (worth $403,540 according to the Dallas County Appraisal District); and two cars, a 2013 Maserati Quattraporte (Dealer retail: $150,000 to $180,000) and a 2011 Mercedes-Benz. All of that will be forfeited if they’re convicted.

The feds also added another three defendants to a 2015 indictment of Irving physician Hector Molina, who is accused of using his Molina Medical Housecall to run up $5.2 million in fraudulent charges. Charged were Irving resident Lidia Antonio; Ivan Castilleja of Dallas; Forney resident Blanca Mata; and San Antonian George Richard Rivaux.

“The wrongdoers that we pursue in these operations seek to use public funds for private enrichment,” read a prepared statement from Attorney General Loretta Lynch. “They target real people – many of them in need of significant medical care.  They promise effective cures and therapies, but they provide none.  Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends.”

As for the data brief, the information is passed to the local offices and used in directing resources to future investigations and claims analysis.

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