Miami Medicare Fraud: Feds targeting South Florida halfway-house owners who take kickbacks for Medicare patients

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From the Miami Herald, Nov 13, 2011
jweaver@MiamiHerald.com (BY JAY WEAVER AND MICHAEL SALLAH)
http://m.miamiherald.com/mh/db_42928/contentdetail.htm?contentguid=enIfTql7&full=true#display
A Miami couple sent to prison for decades could never have carried out one of the nation’s biggest healthcare scams without assisted-living facilities and halfway houses supplying them scads of residents covered by Medicare, authorities say.
Now, the Justice Department has charged 10 residential operators in a first-ever Medicare investigation into people who prosecutors say pocketed bribes for providing patients with substance abuse problems to mental-health clinics owned by Larry Duran and Marianella Valera.
Miami-based American Therapeutic Corp. — owned by Duran and partner Valera, who were recently sentenced to 50 and 35 years in prison, respectively — was at the center of an elaborate plot to fleece $200 million from the taxpayer-funded Medicare program.
Medicare paid American Therapeutic, with seven clinics in South Florida and Orlando, $83 million over the past decade for group-therapy sessions that could not have helped people with drug and alcohol addictions, Justice Department lawyers say. Patients with drug addictions received treatment for mental illnesses they didn’t have, such as bipolar disorder. In many other instances, no treatment was provided at all.
Last week, the controversy of ALF and halfway house operators suspected of taking kickbacks for Medicare patients dominated part of a state task force’s hearing in Miami-Dade County on abuse and neglect in the industry.
So far in the federal prosecution, four residential operators in the Fort Lauderdale area have pleaded guilty to healthcare fraud. Other defendants are expected to follow their example to avoid jury trials and potentially lengthy prison sentences, according to sources familiar with the case.
Those convicted in recent weeks: Natalie Maria Evans, Irene Trematerra, and Robert and Nikki Jenkins, who collectively ran seven halfway houses. Each operator was paid $15 to $30 daily for each patient they sent to American Therapeutic’s clinics, which submitted millions of dollars in false claims as a result, court records show.
The Medicare patients were pawns in the scheme, receiving little to no compensation, according to some patients interviewed by The Miami Herald.
Evans, who pleaded guilty to defrauding Medicare and faces up to 10 years in prison, was president of Vision of Hope Recovery. The company operated five halfway houses in Fort Lauderdale.
According to a statement filed with her plea, Evans admitted she “referred beneficiaries to [American Therapeutic] for mental health treatment solely on the basis of whether they were covered by Medicare and even though most of her residents were simply recovering drug addicts and/or alcoholics.”
To keep the racket going, a multimillion-dollar slush fund was tapped for bribes by American Therapeutic’s one-time marketing director, Margarita Acevedo, of West Kendall. Earlier this year, Acevedo became the first of 34 accused healthcare executives, psychiatrists, counselors, recruiters and residential operators to plead guilty in the American Therapeutic case.
The ongoing prosecution, investigated by the FBI and Health and Human Services’ Office of Inspector General, has yielded about 16 guilty pleas and one trial conviction of American Therapeutic executive Judith Negron.
As part of her plea deal, Acevedo cooperated with authorities and fingered a cast of patient recruiters and residential operators who fed hundreds of Medicare beneficiaries to American Therapeutic.
Acevedo, who kept a ledger of recruiters, patients and kickback payments, was assisted by another marketing executive for American Therapeutic, Joseph Valdes, who also pleaded guilty this year.
They collaborated with American Therapeutic’s two owners, Duran and Valera, to direct the recruitment of patients from ALF and halfway houses, according to Justice Department trial attorney Jennifer Saulino. The executives used a healthcare shell company, Medlink, to launder Medicare payments for the kickback payments, she said in court papers.
Of the 10 residential operators charged with healthcare fraud and kickback violations, one defendant has a particularly tarnished history as an ALF operator: Ramchand “Ramy” Ramrup.
Ramrup’s attorney, Bruce Lehr, declined to comment.
Ramrup ran one of the most troubled assisted-living facilities in Palm Beach County, records show. Since 2005, state inspectors have turned up nearly 100 violations at Boynton Beach Assisted Living Facility, including caretakers failing to give crucial medications to frail elders, misappropriating residents’ money, and failing to clean filthy and decrepit rooms.
In 2006, the home was warned when one of its residents turned up at a hospital covered in oozing bedsores, dirt and his own feces.
That same year, the state banned the facility from taking in new residents until it stopped repeating the same problems.
But in the ensuing five years, the home racked up dozens more violations, including sick and elderly residents roaming from the ALF and later being picked up by police.
Ramrup’s facility was hit four times with fines, including a $5,500 penalty in 2007, but inspectors continued to turn up the same violations every year.
This past week, the state task force held a hearing at Florida International University to address abuse and neglect in the ALF industry. As part of the debate, ALF owners and advocates for residents said the payment of kickbacks for Medicare patients was rampant — especially in South Florida — even though so-called patient brokering has been illegal in the state since 1996.
The task force was appointed by Gov. Rick Scott in May after a Miami Herald series, Neglected to Death, showed the state allowed dozens of facilities to stay open even after they had been caught abusing and neglecting residents, leading to scores of deaths.
The task force will recommend changes to the flawed ALF system for the upcoming Florida legislative session.
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