Achilles Heel

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With 26 bones, 33 joints and more than one hundred muscles, tendons and ligaments in each foot, a lot of things can go wrong with a pair of feet. A former executive with a Chicago-based health care company committed Medicare fraud by taking advantage of thousands of patients who really didn’t have any foot problems and stuck the government program with a $6.97 million bill.

As you might imagine, the executive did not act alone. He was one of three company officers and six doctors who were linked to a fraud scheme involving podiatry services provided to residents of nursing homes and long-term care facilities. However, the fraudster in today’s article happened to be the majority owner of the healthcare company. For approximately six years, he carried out the fraudulent billing scheme through an electronic medical billing system he created. (It automatically generated “canned language” for patient medical records that usually insured that Medicare would pay for procedures that otherwise would not be covered.)

 The healthcare company, which had offices in 16 states, approached nursing homes promising to treat residents at no cost to the facility, regardless of the insurance held by patients. (Podiatrists employed by the healthcare company performed unnecessary procedures or billed for services that were never performed.)

Then came the complaints from the podiatrists, patients and nursing homes. (Some podiatrists complained about inaccurate medical notes and potential fraud, while more than 20 nursing homes complained that all the bills were the same.) An investigation was opened after the relative of an investigator with the Department of Health and Human Services Office of Inspector General questioned services the healthcare company provided at a Missouri nursing home.

The 50-year-old former healthcare company executive from Chicago pleaded guilty to Medicare fraud and was sentenced to one year and one day in prison. He was also ordered to repay $6.97 million to Medicare. His 44-year-old wife, who was the former director of corporate and legal affairs for the company, was also sentenced to one year and one day in prison for Medicare fraud. She was ordered to pay nearly $1 million in restitution.

Further research reveals that the couple used the nearly $8 million they illegally gained to live a lavish lifestyle that include multiple luxury vehicles and homes in the U.S. as well as abroad. One of their homes was even featured in a Chicago magazine story. (I’m guessing that home may be sold to make restitution.) It turns out that greed was the Achilles heel for the former executive and his wife. Unfortunately, the treatment plan for these two is some well-deserved time behind bars.

Today’s “Fraud of the Day” is based on an article entitled, “Health care CEO gets year in prison for fraud,” published by the St. Louis Post-Dispatch on September 21, 2017.

LOUIS -A former executive with a Chicago health care company was sentenced this week in federal court to 366 days in prison and ordered to repay $1.77 million to Medicare.

Former Aggeus Healthcare CEO James Sayadzal, 52, of Chicago, pleaded guilty last year to a conspiracy charge.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.