Paying for Patients

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Corrupt doctor with money in his pocket

Money is a powerful motivator, leading some to risk prison and ruin. That is the case for 13 people associated with a Texas-based company that provides management services to healthcare providers. They have recently been convicted of committing fraud against the federal Medicare program.

The healthcare scam involved Continuum Healthcare and its various health centers in the Houston area, including Westbury Community Hospital, which opened in 2010, and three outpatient mental health centers.

The 13 perpetrators from Texas, Georgia, and Florida were convicted on various charges of money laundering and conspiracy to pay and/or receive kickbacks. Three of the convicted were Continuum executives.

In the most recent case, a Continuum executive pleaded guilty to participating in the scheme to pay co-defendants to bring patients to the company’s care centers. He admitted causing Medicare to pay $1.5 million based on false and fraudulent claims.

Each of the Continuum locations operated a partial hospitalization program (PHP). The PHP was supposed to be a treatment program for people with mental illness that provided a highly structured, short-term hospital inpatient program. While it was an intensive treatment program, it offered less than 24-hour daily care. (Maybe they would have gotten more legitimate referrals if it were a better program).

Under the fraud scheme, people paid or were paid kickback money for referring patients to the program. An investigation found that the vast majority of patients referred did not qualify for the programs because they were not experiencing an acute psychotic episode. In some cases, the patients had dementia, Alzheimer’s Disease, or low intelligence—and not psychosis (Interesting, since there is a nationwide shortage of inpatient mental health facilities).

Ten of the fraudsters admitted receiving payments for referrals, receiving amounts ranging from $130,000 t0 $2.6 million each (That’s serious money for a referral. It’s not hard to see their motivation.)

In total, Continuum billed Medicare $189 million for fraudulent PHP services. Medicaid was involved, too, as it paid $66 million on those claims. And the fraudsters? They are facing incarceration and as much as $250,000 in fines.

Today’s Fraud of the Day is based on a press release, “13 convicted in $189 million Medicare kickback scheme,” issued by The U.S. Attorney’s Office for the Southern District of Texas on Oct. 24, 2019.

HOUSTON – With the plea of a 46-year-old Houston man, 13 people now stand convicted in the healthcare scam involving Continuum Healthcare and its various health centers in the Houston area, announced U.S. Attorney Ryan K. Patrick.

Steven Houseworth admitted to conspiring to pay and receive kickbacks relating to the Medicare program today.

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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.