FRAUD AND KICKBACKS IN THE ASSISTED LIVING FACILITY BUSINESS

The following excerpt is from the Department of Justice website:

Wednesday, November 30, 2011
“Pompano Beach, Fla.-Area Assisted Living Facility Owner Pleads Guilty to Fraud and Kickback Scheme
WASHINGTON – The owner and operator of a Pompano Beach, Fla.-area assisted living facility pleaded guilty today for his role in a Medicare fraud kickback scheme that funneled patients through a fraudulent mental health company and a Medicaid fraud scheme that billed for assisted living services that were never provided, announced the Department of Justice, the FBI, the Department of Health and Human Services (HHS) and the Medicaid Fraud Control Unit (MFCU) of the Florida Office of the Attorney General.
Joseph B. Williams, 41, pleaded guilty before U.S. District Judge Jose E. Martinez in Miami to two counts of conspiracy to commit health care fraud. Williams was the owner and operator of Avondale Manors Retirement Home, an assisted living facility operating in Pompano Beach, and a company called Diversified Marketing Group Inc.
Williams admitted that in exchange for illegal health care kickbacks, he agreed to provide Medicare beneficiaries who resided at Avondale to American Therapeutic Corporation (ATC) for intensive mental health treatment called partial hospitalization program services. ATC purported to operate partial hospitalization programs in seven different locations throughout south Florida and Orlando. According to court documents, Williams was paid approximately $30 per beneficiary per day the beneficiary attended ATC. ATC paid the kickbacks mostly by check made out to Diversified.
According to his plea, Williams knew that ATC fraudulently billed Medicare for the partial hospitalization program treatment that his referrals purportedly received.
According to court documents, ATC’s principals paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and its related company, the American Sleep Institute (ASI). In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for partial hospitalization program services. Ultimately, ATC and ASI billed Medicare for more than $200 million in medically unnecessary services.
Williams also admitted that he billed Medicaid for assisted living services purportedly provided at Avondale when, in fact, those services were never provided. Williams paid owners and operators of halfway houses to obtain the personal identifiers of Medicaid enrollees who resided in those halfway houses and used that information to bill Medicaid fraudulently. Williams also billed Medicaid for assisted living services provided to residents of Avondale at times when they were not receiving any services.
According to the plea agreement, Williams’s participation in the fraud resulted in more than $2 million in fraudulent billing to the Medicare and Medicaid programs. At sentencing, scheduled for Feb. 8, 2012, Williams faces a maximum of 10 years in prison and a $250,000 fine for each count.
ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and nine of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled for trial April 9, 2012, before U.S. District Judge Patricia A. Seitz.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The case is being prosecuted by Trial Attorneys Steven Kim and Jennifer L. Saulino of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG and MFCU and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants that collectively have billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”