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Medicare and Medicaid Fraud in Nursing Homes

Healthcare fraud, specifically through programs like Medicare and Medicaid, is a major problem in the United States. In fact, it is one of the most prevalent types of insurance fraud committed each year. It is estimated that Medicaid fraud amounted to approximately $140 billion in 2016, while Medicare fraud was very close behind. So who foots the bill and gets hurt when fraud is perpetrated? In the situation of health insurance fraud in nursing homes, the victims are our loved ones.

Medicare coverage is broken into sections, starting with Medicare Part A. Part A covers inpatient hospital care, skilled nursing facilities (i.e. nursing homes), home health care services, and hospice care. Medicare is designed to assist persons over 65 years old and those who are disabled pay for medical expenses. For instance, an individual in a nursing who must undergo a procedure would only pay a percentage of the total cost. The remainder is billed by the medical provider to Medicare, who pays the provider an amount negotiated in advance for the specific procedure performed.

Medicare fraud can occur in a number of different ways. Some of the most common occurrences of fraud include phantom billing and kickback fraud. Phantom billing is probably the most obvious and widely committed type of fraud. This type occurs when healthcare providers bill Medicare for unnecessary medical procedures or procedures that are never performed. Unnecessary procedures can cause side effects that cause complications with a patient’s existing medical conditions. Billing for unnecessary medical equipment or tests also constitutes phantom billing. Kickback fraud refers to when another individual or facility receives some form of “kickback” for assisting in Medicare fraud. This could be criminals who steal patients’ Medicare numbers and data or medical providers receiving money for making false diagnoses or needlessly recommending a patient to another facility that will engage in financial fraud.

Recently, an Illinois businessman was sentenced to 6.5 years in prison for masterminding a $20 million Medicare fraud scheme against the elderly. Seth Gillman founded Passages Hospice LLC, which was intended to be an intensive hospice care facility for terminally ill elderly patients. The facility served patients from 89 counties and billed over $90 million to Medicare from 2008 to 2012.

According to government records, the patients received little to none of the medical treatment billed. Instead, Gillman phantom billed the government for medical procedures that never took place. He then pocketed the cash to fuel his lavish lifestyle, according to prosecutors who handled the case.

Further, Passages was accused of colluding with other nursing homes around the state in a scheme where nursing homes would diagnose a patient as terminal and recommend them for hospice care at Gillman’s facility. In reality, many of these patients sent to Passages were not terminal at all. Under Medicare and Medicaid rules, hospice care is typically reserved for patients who are medically certified to have less than six months to live. This higher level of care would boost Gillman’s billings by nearly 4 times per patient. He then provided kickbacks from these additional funds to the nursing homes that colluded with him.

On top of the 6.5-year prison sentence, Gillman was ordered to pay the Federal government $18 million in a civil judgment, as well as $9 million in restitution to Medicare.

Elderly adults are particularly vulnerable to healthcare fraud and nursing home abuse. If you suspect your loved one is not receiving the treatment he or she deserves, call the experienced Tennessee nursing home attorneys at Nahon, Saharovich & Trotz today at 800-529-4004.