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Exposing Medicare Fraud: Michigan’s $61.5 Million Scandal

December 5, 2023

With a wide variety of Medicare Fraud alleged, the Department of Justice announced criminal charges against 23 individuals for various schemes involving home health agencies fraudulently billing Medicare by paying kickbacks for Medicare patients in violation of the Anti-Kickback Statute, accepting patients who didn’t even need home health care, falsifying their ownership in various interrelated companies, and not even providing services that they billed for. It’s important to note that the defendants are presumed innocent unless proven guilty and they have not admitted to the conduct, so everything within this article focuses on the allegations that are denied.  The criminal charges for the fraud are significant, however, with each individual potentially receiving from 5 to 35 years in jail with the average charge carrying a ten-year prison sentence.  Oftentimes these criminal charges emanate from cases civilly brought under the False Claims Act, a statute designed to combat Medicare Fraud, but the criminal component of the case takes on a life of its own. 

Exposing Medicare Fraud: Michigan's $61.5 Million Scandal

The 23 individuals are accused of participating in multiple illegal schemes that defrauded Medicare of over $61.5 million. This fraudulent operation included paying kickbacks and bribes and billing Medicare for unnecessary medical services that were never actually provided. According to public records, the defendants operated several home health agencies in the Detroit metropolitan area and allegedly concealed their ownership interest in these agencies using straw owners.  The owners allegedly paid bribes to recruit patients in violation of the Federal Anti-Kickback Statute (“AKS”). These patients often did not need and/or qualify for home health care under Medicare rules, and frequently were not even provided the care for which Medicare was billed.   An alleged hybrid of schemes involving billing for services not rendered, billing for services not justified, kickbacks, and alleged falsification of predicate documents to enable the corporate entities to bill Medicare.  Two of the individuals alone allegedly received more than $43 million from Medicare, which they used for personal gain and oftentimes not for the benefit of the patients.  One thing that’s concerning that’s missing from the public record is how much money has been seized pursuant to criminal forfeiture because often the money from these schemes are secreted overseas and not obtainable. Generally, in alleged schemes like this with multiple co-defendants certain defendants who have lesser exposure cooperate with the authorities to obtain lesser jail time or potential probation for their cooperation.

Medicare Fraud Unveiled

The alleged culprits operated multiple home health agencies in the Detroit metropolitan area. To conceal their involvement, they employed straw owners, which included family members and associates who were some of the defendants in the action. These fake claims were rooted in illegal kickbacks paid out for the recruitment of patients who didn’t require home health care services. In many instances, the care billed to Medicare was never provided. The defendants allegedly initiated quid pro quo relationships with physician clinics to fraudulently bill Medicare, which resulted in the pocketing of over $43 million meant for legitimate healthcare services.

A “kickback” under the False Claims Act is something of value given in exchange for Medicare patients or Medicaid patients in the instant fact pattern, but more broadly under the False Claims Act can apply to things given in excess of fair market value, or freebies to induce the prescription of a drug in pharmaceutical fraud.

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The Impact on Vulnerable Patients

The consequences of these fraudulent actions are far-reaching. Medicare was drained of tens of millions of dollars meant to provide healthcare to millions of Americans, who just didn’t receive the treatments. That money could have been spent on treatment for people who actually needed it and used to build a stronger healthcare system, not to enrich the coffers of a few individuals.

Medicare Fraud Whistleblower Protections

Medicare fraud is dually a threat to both the healthcare system and to taxpayers. Whistleblowers play a crucial role in uncovering such schemes, and federal law provides protection to those who come forward with information about healthcare fraud, if they report the scheme promptly and in the right manner, generally through the use of a whistleblower attorney. Whistleblower protections shield individuals from retaliation for reporting Medicare fraud and, in some cases, provide them with a portion of the funds recovered by the government under the False Claims Act. Whistleblowers are often eligible to receive substantial rewards, which creates a strong incentive to report fraudulent activities.

Additionally, an operator of Infinity Visiting Physician Services PLC and others are alleged to have ordered medically unnecessary home health services, leading to fraudulent claims of over $11.5 million.

With strong whistleblower protections and the potential for substantial rewards of up to 30%, individuals who come forward with information about Medicare fraud are essential to maintaining the trust and effectiveness of these vital programs.

If you suspect Medicare fraud, it’s crucial to act promptly to protect the integrity of the healthcare system and the well-being of patients. One of the most effective steps you can take is to contact a whistleblower law firm. These experienced whistleblower law firms are well-versed in the intricacies of whistleblower protection laws and can provide guidance on how to report your concerns while protecting your rights. They can also help you understand the potential rewards for your courageous actions. By contacting a whistleblower law firm, you’re not only helping to combat healthcare fraud but also ensuring your own protection as you embark on the journey to expose fraudulent activities and contribute to a more transparent and accountable healthcare system.