February 5, 2013

Prison Sentences in $205 Million Mental Health Fraud Scheme

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A former program director, two former marketers and a former therapist have been sentenced to prison in connection with a $205 million scheme to defraud Medicare.

The scheme revolved around partial hospitalization programs, which are intensive treatments for severe mental illness, according to the Department of Justice.

Here are the sentences, announced Jan. 25 and Jan. 28, according to the Department of Justice:

  • Lydia Ward, American Therapeutic Corporation (ATC) former program director, was sentenced to eight years and three months in prison plus three years of supervised release and was ordered to pay restitution of more than $34.1 million. She was convicted Nov. 15 of conspiracy to commit health care fraud. As program director of ATC’s Fort Lauderdale, Fla., office from November 2008 until October 2010, Ward helped doctors sign patient files without reading them and assisted the owners of ATC in creating doctor and therapist notes to make it appear patients qualified for specialized treatment.
  • Hilario Morris, former ATC marketer, was sentenced to five years in prison plus three years of supervised release and was ordered to pay $82.2 million in restitution. Morris was convicted June 1 of conspiracy to pay illegal health care kickbacks. Morris, a marketer from September 2004 until ATC closed in October 2010 because of the federal case, paid kickbacks to organizations in North Miami and Broward County in Florida that were selling their patients to ATC. The patients did not receive services.
  • Sandra Jimenez, former ATC marketer, was sentenced to three years in prison plus three years of supervised release and was ordered to pay $20.5 million in restitution. She pleaded guilty in January 2012 to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to receive and pay health care kickbacks. She used a related company, American Sleep Institute, to submit fraudulent Medicare claims.
  • Nicole Eckert, former ATC therapist, was sentenced to four years in prison plus three years of supervised release and was ordered to pay more than $72 million in restitution. Eckert, an ATC therapist from September 2005 to September 2007 then from late 2009 to October 2010, was convicted of one count of conspiracy to commit health care fraud after a 16-day trial. She fabricated therapist notes to make it appear patients qualified for services and received intensive treatments.

For more information on the sentences, visit http://www.justice.gov/opa/pr/2013/January/13-crm-111.html and http://www.justice.gov/opa/pr/2013/January/13-crm-116.html.

Recovery auditor (RAC) news

Region A RAC Performance Recovery and Region B RAC CGI Federal posted issues this week for inpatient hospitals, outpatient hospitals and physician/non-physician practitioners. See the charts below for more details.

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About the Author

Karen Long is the editor of Physician Solutions for DecisionHealth and oversees products that relate to fraud and abuse and HIPAA compliance for physician offices and home health agencies, and accreditation compliance for hospitals. In her almost four years at DecisionHealth, Karen also has been the compliance editor and a reporter for Home Health Line, nation's leading independent authority on home healthcare business, regulation and reimbursement.

Contact the Author

KLong@decisionhealth.com

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