Home Health & Hospice Week

Detroit-area HHAs paid for referrals, DOJ complaint alleges.

If you've ever thought about paying a marketing company to generate referrals, a recent civil complaint may make you think twice.

The U.S. Department of Justice has accused Ypsilanti, MI resident Rebecca Sharp, her Part B provider Continuing Senior Care, her home care marketing company Marketing & Assessment Co. and Continuing Senior Home Care of a variety of fraud charges, according to a civil complaint filed in U.S. District Court in the Eastern District of Michigan.

Most pertinent to home health agencies is an alleged kickback scheme between the M&A marketing company and five Detroit-area HHAs: New Century Home Health Care Inc. in Madison Heights, Family Care Choice and Services Inc., Open Arms Home Care Inc., Superior Home Care Inc. and Watson Health Care Inc., all in Southfield.

How the Scheme Worked

Sharp's CSC physicians would certify a patient for a home health plan of care regardless of need or eligibility, according to an undercover operation conducted by the Federal Bureau of Investigation and an unnamed HHA that was approached by Sharp. Then M&A would "sell" the patient to the HHA for a 60-day episode. "Sharp dictated that each patient receive 12 therapy visits regardless of the patient's needs," says an FBI agent's declaration included in the complaint.

If the receiving agency used CSC's therapists to furnish the 12 visits, the HHA paid CSC $120 per visit for a total of $1,440 per patient per episode. If the receiving agency used its own therapists to furnish the required 12 visits, it paid M&A $75 per visit for a total of $900 per episode, prosecutors allege.

New Century paid CSC $395,000, Superior paid $361,000, Family Care paid nearly $320,000, Open Arms paid $77,000, and Watson paid $18,000, the complaint says.

Sharp told another HHA source that she could furnish 80 patients per week for a $250 per patient referral fee, the complaint charges.

Patient cold calling: Sharp's companies drummed up home care patients by cold calling seniors over the age of 65 and offering them non-covered chore services. Most patients were not homebound or eligible for the Medicare home care benefit, but CSC's physicians would certify them, prosecutors claim.

Sharp's companies also face a host of other charges including billing Part B for physician, therapist and other services never performed or that were medically unnecessary; forging signatures on Medicare claims; and billing for bogus physician home visits. CSC billed for 25 hours of one physician's services on one day, for example. They bilked Medicare of nearly $1 million overall in the schemes, the complaint alleges.

Ill-gotten gains: Sharp used the proceeds to buy expensive luxury cars, help pay for a home and buy jewelry, the complaint alleges. She failed to file taxes in multiple years despite income, including more than $600,000 in slot machine winnings in one year.

Because the Medicare claims were submitted either electronically or via mail, Sharp and her companies face mail and wire fraud charges in addition to fraud and anti-kickback violations.

FBI agents raided Sharp's home and her Southfield business on Aug. 31, seizing patient records and three vehicles, reports the Detroit Free Press. They also froze her bank accounts and obtained a court order to prevent her from disposing of her assets.

More Investigation Expected

Authorities were alerted to problems when approached HHAs and patients complained to Medi-care and its contractors, the complaints says.

"The allegations in the fraud case are ... extremely egregious, and are among the most obvious fraud an entity could commit," notes attorney Marie Berliner with Lambeth & Berliner in Austin, TX.

"This was a pretty flat out set of facts suggesting intentional fraud," adds attorney Deborah Randall with Arent Fox in Washington, DC.

What's next: The court actually has dismissed the civil complaint, which was filed Aug. 31, at the prosecutors' request, Sharp's lawyer Fred Bellamy tells Eli. "There is nothing pending," says Farmington Hills-based Bellamy.

But dismissing the initial complaint used to secure a temporary restraining order is a fairly routine step in an ongoing federal investigation. TRO requests occur on a very quick timeframe, notes attorney Robert Markette with Gilliland & Caudill in Indianapolis. Prosecutors likely want to conduct further investigation to pin down more details and add more evidence, Markette expects.

In an answer to the government's complaint, Sharp denies the allegations. She is not commenting on the allegations in the case, Bellamy says.