Owner of Home Health Company Pleads Guilty to Role in $6.5 Million Health Care Fraud Scheme

The owner and operator of Nestor’s Health Services, Inc. (Nestor HH), a now-defunct Miami home health care agency, pleaded guilty today in connection with a $6.5 million health care fraud scheme.

Acting Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Acting Special Agent in Charge Brian Martens of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office made the announcement.

Cruz Sonia Collado, 64, of Homestead, Florida, pleaded guiltybefore U.S. District Judge Robert N. Scola in the Southern District of Florida to one count of conspiracy to offer and pay health care kickbacks and to defraud the United States, and to one count of offering and paying health care kickbacks.

Collado was an owner and operator of Nestor HH, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.

According to court documents, Collado and her co-conspirators operated Nestor HH for the purpose of billing Medicare for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.   As the owner and operator of Nestor HH, Collado paid kickbacks and bribes to patient recruiters, in return for those recruiters providing patients to Nestor HH for home health care and therapy services that were not medically necessary, and in many instances, were not provided.  Collado would then fraudulently bill the Medicare program for home health care services on behalf of these recruited patients, which Collado knew was in violation of federal criminal laws.

From approximately March 2009 through at least January 2014, Nestor HH submitted more than $6.5 million in claims for home health services, and fraudulently obtained more than $6.1 million before the fraud was exposed.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.    This case is being prosecuted by Trial Attorneys Anne P. McNamara and A. Brendan Stewart of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 billion.    In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, has removed over 17,000 providers from the Medicare program since 2011.

Office Worker Pleads Guilty in Miami for Role in $7 Million Health Care Fraud Scheme

An office worker pleaded guilty today in connection with a health care fraud scheme involving Anna Nursing Services Corp. (Anna Nursing), a defunct home health care company.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Acting Special Agent in Charge Brian Martens of the Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office made the announcement.
Lizette Garcia, 37, of Miami, Florida, pleaded guilty before U.S. District Judge Joan A. Lenard in the Southern District of Florida to one count of payment of health care kickbacks.    Sentencing is scheduled for Aug. 27, 2014.
Garcia was an office worker at Anna Nursing, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.    According to court documents, Anna Nursing was operated for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were medically unnecessary and/or were not provided.
On behalf of the owners and operators of Anna Nursing, Garcia paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Anna Nursing for home health care and therapy services that were medically unnecessary and/or were not provided.    Anna Nursing then billed the Medicare program on behalf of the recruited patients, which Garcia knew was in violation of federal criminal laws.
From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care services that were medically unnecessary and/or were not provided.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.    This case is being prosecuted by Trial Attorneys A. Brendan Stewart and Anne McNamara of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,900 defendants who have collectively billed the Medicare program for more than $6 billion.    In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, has removed over 17,000 providers from the Medicare program since 2011.

Government Settles False Claims Act Allegations Against Florida-Based Baptist Health System for $2.5 Million

Baptist Health System Inc. (Baptist Health), the parent company for a network of affiliated hospitals and medical providers in the Jacksonville, Florida, area, has agreed to pay $2.5 million to settle allegations that its subsidiaries violated the False Claims Act by submitting claims to federal health care programs for medically unnecessary services and drugs, the Department of Justice announced today.  The alleged misconduct involved Medicare, Medicaid, TRICARE and the Federal Employee Health Benefits Program.

“Providers that bill for unnecessary services and drugs contribute to the soaring cost of health care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Providers must deal fairly and honestly with federal health care programs, and the Justice Department will investigate aggressively and hold accountable those who do not.”

This settlement resolves allegations that, from September 2009 to October 2011, two neurologists in the Baptist Health network misdiagnosed patients with various neurological disorders, such as multiple sclerosis, which caused Baptist Health to bill for medically unnecessary services.  Although Baptist Health placed one of the physicians at issue on administrative leave in October 2011, it did not disclose any misdiagnoses to the government until September 2012.

“This settlement sends a clear message that health care fraud will not be tolerated in our district, particularly when there is the potential for harm to patients,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida.

The improper conduct at issue in this case included Medicaid patients.  Medicaid is funded jointly by the states and the federal government.  The state of Florida, which paid for some of the Medicaid claims at issue, will receive $19,024 of the settlement amount.

Health care providers will not be permitted to provide patients unnecessary medical services and drugs and then pocket the improper payments they receive as a result,” said Acting Special Agent in Charge Brian Martens, U.S. Department of Health and Human Services Office of Inspector General.  “Our agency is dedicated to investigating health care fraud schemes that divert scarce taxpayer funds meant to provide for legitimate patient care.” 

The government’s investigation was initiated by a qui tam,or whistleblower, lawsuit filed under the False Claims Act by Verchetta Wells, a former Baptist Health employee.  The act allows private citizens to file suit for false claims on behalf of the government and to share in the government’s recovery.  Wells will receive $424,155. 

“These health care providers did not only violate the laws of the United States – they violated the trust placed in them by their patients,” said Inspector General of the U.S. Office of Personnel Management Patrick E. McFarland.  “Federal employees deserve health care providers, including hospitals, that meet the highest standards of ethical and professional behavior.  Today’s settlement reminds all providers that they must observe those standards and reflects the commitment of federal law enforcement organizations to pursue improper and illegal conduct that may put the health and well-being of their patients at risk.” 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs. 

This settlement is the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, the U.S. Department of Health and Human Services Office of Inspector General, the Defense Health Agency Program Integrity Office and the Office of Personnel Management Office of Inspector General. 

The claims resolved by this settlement are allegations only, and there has been no determination of liability.  The lawsuit against Baptist Health was filed in the U.S. District Court for the Middle District of Florida and is captioned United States ex rel. Wells v. Baptist Health System Inc. et al.