$60 million Medicare fraud scheme involved assisted living communities, federal officials allege

Share this content:

Assisted living communities were provided remuneration, including certified nursing assistants to staff their facilities, for their participation in a $60 million Medicare fraud scheme for which 16 individuals were charged in an indictment unsealed Tuesday, the U.S. Attorney's Office for the Northern District of Texas said.

The indictment had been returned by a federal grand jury in Dallas last week.

The remuneration allegedly was paid to the assisted living communities, which were not named, in exchange for referrals of Medicare or Medicaid beneficiaries to Frisco, TX-based Novus Health Services hospice care. The arrangement violated Novus' Medicare provider agreement and federal law, officials said. The number of assisted living communities allegedly involved in the scheme was not specified in the indictment.

The document alleges that from July 2012 to September 2016, Novus billed Medicare and Medicaid more than $60 million for fraudulent hospice services, of which more than $35 million was paid to Novus. In addition to recruiting ineligible hospice beneficiaries by providing kickbacks to referring physicians and facilities, federal officials maintain, the defendants submitted false claims for hospice services, submitted false claims for continuous care hospice services and falsified and destroyed documents to conceal these activities from Medicare.

The hospice company used an “aggressive medicating practice” to ensure that beneficiaries' medical records contained documentation that would justify billing Medicare at the higher continuous care billing rate, according to the indictment, which states that sometimes the excessive dosages resulted in serious bodily injury or death to the beneficiaries.

“That tens of millions of dollars were stolen through fraud is shocking enough,” U.S. Attorney John Parker said. “That these defendants used human life at its most vulnerable stage as the grist for this scheme displays a shocking level of depravity that this community simply cannot tolerate.”

Each indicted defendant — all founders or employees of Novus except for one, who owned a separate physician home visit company — is charged with one count of conspiracy to commit healthcare fraud. Twelve of the defendants are also charged with at least one other count related to the conspiracy.

If convicted, each count of conspiracy to commit healthcare fraud and substantive healthcare fraud count carries a maximum sentence of 10 years in federal prison and a $250,000 fine.

close

Next Article in News

In Focus

June 13

Survey says ... game show week is a hit

Rochester, NY 

St. John's Home recently hosted "Game Show Week 2.0" in recognition of Alzheimer's and Brain Awareness Month, which is June.