Medicare Compliance & Reimbursement

HHA owner sentenced to years in jail for fraud plea.

Home health agencies (HHAs) could be in for a fraud and abuse crackdown reminiscent of Operation Restore Trust, if a recent fraud case is any indication.

Nida Campanilla, owner and operator of Monrovia, CA-based Community Home and Health Care Services from May 2003 until August 2004, recently pled guilty to a kickback scheme and was sentenced to two years in federal prison, according to a press release from U.S. Attorney Debra Wong Yang. Campanilla also repaid $600,000 to Medicare.

Campanilla admitted that Community recruited patients for unnecessary services by paying illegal kickbacks, directly and through marketers, to doctors and patients, the release explains. Community then billed Medicare for home health services that were not medically necessary and, in some cases, not performed as claimed on the bills.

Plus: Campanilla and other Community employees also forged physicians' signatures and falsified medical records to conceal the fraud, prosecutors say.

Community's director of patient care services, RN Bienvenida Musngi, pled guilty in January to health care fraud. And Community's quality assurance director, LVN Catherine Sabalburo, admitted to forging doctors' signatures on treatment plans and falsifying medical records at Campanilla's direction.

Sabalburo cooperated in the investigation and was sentenced in January to three years probation and ordered to pay $156,217 in restitution, Yang says.

Qui tam suit: The feds began investigating after Community employee Jody Shutt filed a whistleblower suit. The False Claims Act qui tam case is pending in federal court and could bring severe financial penalties on top of the criminal ones already given.

Regional Problem Could Have Nationwide Effects

The case highlights the problem with kickbacks in Southern California, observes attorney Deborah Randall with Arent Fox in Washington, DC. "The Southern California issue of kickbacks to doctors and referral sources has become dramatically concerning."

California providers tell Randall that widespread kickback practices are making it hard for new, honest operators to grow their businesses, she says.

Watch out: This is the type of environment that brought about Operation Restore Trust, the mid-1990s fraud and abuse crackdown on the home health industry, Randall warns. And these types of practices also brought on Congress' mistrust of home health providers, which led to the interim payment system in 1998 and about one-third of Medicare HHAs going out of business under IPS.

Regulatory and enforcement authorities don't seem to have reached that fever pitch against HHAs yet this time around--but it may not be far off.

"Home health fraud is a focal point of our ongoing effort to address the serious problem of health care fraud in Southern California," Yang says in the release. HHA Medicare payment "was revised in 2001 in an effort to curb prior abuses. Unfortunately, a number of agency operators quickly devised methods of exploiting the new system, which law enforcement is actively addressing."

Innocent HHAs are already paying the price, with California providers complaining of increased scrutiny and blocked payment for certain patients.

Police Your Employees

To make sure you don't get caught up in a kickback or other fraud investigation, be sure to supervise your employees carefully to make sure they aren't offering kickbacks to referral sources or engaging in other illegal practices, advises Burtonsville, MD-based health care attorney Elizabeth Hogue.

"The government can show intent if there was a pattern of conduct that agencies knew about or should have known about," Hogue explains. "If employees are doing the same kinds of things and management doesn't identify the problems, the government may still conclude that there was intent on the part of management and go after them."

Take a hard look at your subcontractors, like therapists, as well as your direct employees, advises Robert Markette Jr. with Gilliland Markette & Milligan in Indianapolis. "You don't want to find yourself getting dragged down with them," Markette warns.

By the same token, employees shouldn't just follow their employers' directions blindly if they violate the law. As this case shows, "everyone is responsible for compliance and, in instances of noncompliance, all employees are at risk," Hogue emphasizes.