Divisive Fraud

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If you had to list one thing that fraudsters are usually good at, it would be divisiveness. (They usually come up with a deceptive plan to defraud that benefits them, but causes a lot of problems for their victims.) An article published in The Shreveport Times tells about an owner and operator of two Baton Rouge community mental health centers who victimized many through unnecessary psychiatric services and helped bilked more than $258 million in a Medicare scheme.

The story states that the woman recruited Medicare beneficiaries living in nursing homes and assisted living facilities to attend partial hospitalization programs even though she knew the patients did not need psychotherapy. As is often the case with fraudsters, the woman did not act alone. Her co-conspirator was a patient recruiter for another community health center located in Houston.

The man assisted the woman in finding patients and received $1,500 a week for his services. His patients came from group homes and even though they were not a good fit for the mental health services, they received $75 in cash each week. (The man even coached his patients on how to describe their psychiatric symptoms so that they would qualify for services.) Through his divisive tactics, the Houston health care facility billed Medicare for approximately $16.5 million.

Apparently, the woman was quite devious and was able to prolong the patients’ stay by having them involuntarily committed to local inpatient psychiatric hospitals. (That’s certainly one way to prolong their stay. Yikes!) When the patients were discharged, they were readmitted to one of the community facilities the woman managed. She also instructed therapists at the Baton Rouge facilities to write up fake treatment records indicating that the patients had received services even though they had not. And if that wasn’t enough, she also orchestrated the interception of patient billing statements from the mail so they wouldn’t see what was being billed to their account. The woman also stole incriminating documents prior to being served with a search warrant.

The 53-year-old woman received a 90-month prison sentence and must pay $43.5 million in restitution. Her 48-year-old co-conspirator will serve 60 months in prison and pay back $3.2 million in restitution.

This case is part of a larger investigation that has already convicted 17 others including therapists, marketers, administrators, owners and a medical director. Altogether, the companies received about $43.5 million from those claims. (Let’s hope that these two get a better understanding of what it’s like to be involuntarily incarcerated. Perhaps going to jail will help the? better relate to their patients, who were sent against their will to a mental health facility.)

Source: Today’s ”Fraud of the Day” is based on an article titled, ”2 Get Prison for Roles in $258.8 Medicare Fraud Scheme,” published by The Shreveport Times on October 31, 2014.

Two people must serve time and pay millions in restitution for their involvement in a $258.5 million Medicare fraud scheme involving partial hospitalization psychiatric services.

The owner and operator of two community mental health centers in Baton Rouge and a patient recruiter for a community mental health center in Houston were sentenced today by U.S. District Court Chief Judge Brian A. Jackson in the Middle District of Louisiana, a U.S. Justice Department news release states.

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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.