"...lawsuit against Amerigroup was originally filed by Cleveland Tyson, a former company employee."
"...avoided enrolling unhealthy patients.."
"...October 2006, a jury found Amerigroup liable..."
"...court entered a $334 million judgment against Amerigroup, which then filed an appeal with the U.S. Court of Appeals for the Seventh Circuit in Chicago seeking a reversal of the judgment. As part of the settlement, Amerigroup will dismiss its appeal and has agreed to enter into a Corporate Integrity Agreement (CIA) with the Office of Inspector General for the U.S. Department of Health and Human Services (HHS)."
OK!
My question is WHY is Amerigroup or ANY ONE OF ITS SUBSIDIARIES still allowed to conduct ANY BUSINESS in our Healthcare System?
"...CIA between Amerigroup and its subsidiary health plans and the Office of Inspector General requires the company to adopt policies and procedures, and a code of conduct designed to prevent improper discrimination against federal health care program beneficiaries in its marketing and enrollment practices. The CIA applies to Amerigroup's managed care plans in all the states – currently 11 – in which the company does business during the term of the agreement. In addition, Amerigroup must hire an independent organization to annually review its marketing practices and enrollment initiatives, and its board of directors must certify the effectiveness of its compliance program each year."
Thursday, August 14, 2008
Amerigroup Settles Federal & State Medicaid Fraud Claims for $225 Million WASHINGTON – Amerigroup Corporation has agreed to pay $225 million to resolve claims that it defrauded the Illinois Medicaid program, the Justice Department and the Attorney General of Illinois announced today. Amerigroup, which is headquartered in Virginia Beach, Va., operates managed health care plans throughout the United States.
Today’s settlement resolves allegations that Amerigroup and its Illinois subsidiary systematically avoided enrolling pregnant women, and unhealthy patients in their managed care program in Illinois. Amerigroup was paid by the United States and the state to operate a Medicaid managed care health plan in Illinois to provide health care to low income people. Amerigroup was required by law to enroll all eligible beneficiaries. The United States and the state of Illinois brought claims against the company alleging that it violated this requirement and avoided enrolling unhealthy patients, as well as pregnant women, who were more costly to treat and would have eroded Amerigroup’s profit margin.
In October 2006, a jury found Amerigroup liable under the federal False Claims Act and the Illinois Whistleblower Reward and Protection Act. The court entered a $334 million judgment against Amerigroup, which then filed an appeal with the U.S. Court of Appeals for the Seventh Circuit in Chicago seeking a reversal of the judgment. As part of the settlement, Amerigroup will dismiss its appeal and has agreed to enter into a Corporate Integrity Agreement (CIA) with the Office of Inspector General for the U.S. Department of Health and Human Services (HHS).
"The Justice Department is committed to ensuring that recipients of federal health care funds adhere to the law, so that appropriate health care services are provided to all eligible patients," said Gregory G. Katsas, Assistant Attorney General for the Civil Division.
"A settlement of this magnitude sends the clear message that this office takes health care fraud very seriously," said Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois. "This case also illustrates the perils a defendant faces in taking a case such as this to trial."
"This settlement should send a clear message that the state of Illinois will not tolerate illegal conduct in the provision of healthcare for Illinoisans," said Illinois Attorney General Lisa Madigan. "I am pleased that our work on this case will bring millions of dollars to the State of Illinois."
The CIA between Amerigroup and its subsidiary health plans and the Office of Inspector General requires the company to adopt policies and procedures, and a code of conduct designed to prevent improper discrimination against federal health care program beneficiaries in its marketing and enrollment practices. The CIA applies to Amerigroup's managed care plans in all the states – currently 11 – in which the company does business during the term of the agreement. In addition, Amerigroup must hire an independent organization to annually review its marketing practices and enrollment initiatives, and its board of directors must certify the effectiveness of its compliance program each year.
"The Office of Inspector General is committed to protecting Medicaid beneficiaries from fraud and discrimination" said HHS Inspector General Daniel R. Levinson. "This Corporate Integrity Agreement will help ensure that our most vulnerable beneficiaries have access to needed Medicaid HMO plans in the future."
The lawsuit against Amerigroup was originally filed by Cleveland Tyson, a former company employee. Under the federal False Claims Act and the Illinois Whistleblower Reward and Protection Act, a private party, known as a relator, is entitled to file suit alleging fraud on behalf of the federal or state government, respectively, and receive a share of any recovery. As a result of today’s recovery, Tyson will receive $56.25 million.
The case was handled by the U.S. Attorney’s Office for the Northern District of Illinois and the Illinois State Attorney General’s Office, with assistance from the Justice Department’s Civil Division and the Office of Inspector General for HHS, as well as by private counsel for the relator.
http://www.newyorkparalegalblog.com/2008/08/amerigroup-settles-federal-state.html
Friday, August 15, 2008
Wednesday, August 13, 2008
Healthcare & Investment Firms......Canyou connect this one?
Below is an exerpt posted in this week's Newsweek : http://www.newsweek.com/id/151727/page/2
The Pickens Profile You Haven't Read
Pickens likes to portray his years as a corporate buccaneer during the 1980s as "shareholder activism." When Mesa fell into a cash crisis in the mid '90s after the price of natural gas collapsed, there was no mercy for him on Wall Street. Pickens called in Texas financier Richard Rainwater, and his wife and business partner, Darla Moore, to help raise capital. (Rainwater helped another oilman, George W. Bush, escape his money problems by making him co-owner of the Texas Rangers, a deal that eventually made Bush a multimillionaire.)
Moore, a leveraged-buyout specialist dubbed "the Toughest Babe in the Business" by Fortune, tried to raise $1 billion on Wall Street for Mesa. "I found out there wasn't a bank in the country that would touch the deal if Boone was CEO," Moore told NEWSWEEK. "I tried to soften the message [but] he was really surprised. 'But I get along with all those guys,' is what he said." The Rainwaters worked out a deal for Pickens to retire as CEO, and bought him out, a deal that still rankles the billionaire. Moore whooped with surprise when told by a NEWSWEEK reporter that Pickens had compared her in his book to a "wolverine that pisses on everything it doesn't eat." Moore responds, "I think what people don't know about Boone is that deep down he is actually—I hate to say this—a nice man. And he knows more about energy than anybody in the world."
Just a little insight to Darla Moore;
Darla Moore In 1981, at Chemical Bank in New York, Moore and Conway were focused on a new idea: loaning money to corporations
teetering on the brink of bankruptcy,
Soon after, she met and married Rainwater, who made her president of his investment company. They now had $500 million to put wherever they wanted.That's when she pushed T. Boone Pickens out . . . and then to a hard look at Rick Scott.
Scott was Rainwater's good friend. They had bought two hospitals in Texas and shared a vision: a nationwide chain of hospitals using cost controls.
By 1997, Scott's company, Columbia/HCA, was the nation's largest managed care provider.
But Moore said Scott was unwise to ignore subordinates who questioned his practices and foolish to dismiss a federal investigation of how Columbia billed Medicare.
According to the SEC Form :
Med Diversified Inc.
Annual Meeting Of Stockholders
September 9, 2003
JAMES K. HAPP has served as chief executive officer of our subsidiary, Tender Loving Care Health Care Services, Inc., since October 2002.
Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency. (1999-2002 by deduction of SEC statement)
Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationwide and more than $1 billion in revenue in 1997. In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations (At least1997 until 1999)
Participated in the "DIVESTITURE"...Where did this divestiture 'divest' to?
The Pickens Profile You Haven't Read
Pickens likes to portray his years as a corporate buccaneer during the 1980s as "shareholder activism." When Mesa fell into a cash crisis in the mid '90s after the price of natural gas collapsed, there was no mercy for him on Wall Street. Pickens called in Texas financier Richard Rainwater, and his wife and business partner, Darla Moore, to help raise capital. (Rainwater helped another oilman, George W. Bush, escape his money problems by making him co-owner of the Texas Rangers, a deal that eventually made Bush a multimillionaire.)
Moore, a leveraged-buyout specialist dubbed "the Toughest Babe in the Business" by Fortune, tried to raise $1 billion on Wall Street for Mesa. "I found out there wasn't a bank in the country that would touch the deal if Boone was CEO," Moore told NEWSWEEK. "I tried to soften the message [but] he was really surprised. 'But I get along with all those guys,' is what he said." The Rainwaters worked out a deal for Pickens to retire as CEO, and bought him out, a deal that still rankles the billionaire. Moore whooped with surprise when told by a NEWSWEEK reporter that Pickens had compared her in his book to a "wolverine that pisses on everything it doesn't eat." Moore responds, "I think what people don't know about Boone is that deep down he is actually—I hate to say this—a nice man. And he knows more about energy than anybody in the world."
Just a little insight to Darla Moore;
Darla Moore In 1981, at Chemical Bank in New York, Moore and Conway were focused on a new idea: loaning money to corporations
teetering on the brink of bankruptcy,
Soon after, she met and married Rainwater, who made her president of his investment company. They now had $500 million to put wherever they wanted.That's when she pushed T. Boone Pickens out . . . and then to a hard look at Rick Scott.
Scott was Rainwater's good friend. They had bought two hospitals in Texas and shared a vision: a nationwide chain of hospitals using cost controls.
By 1997, Scott's company, Columbia/HCA, was the nation's largest managed care provider.
But Moore said Scott was unwise to ignore subordinates who questioned his practices and foolish to dismiss a federal investigation of how Columbia billed Medicare.
According to the SEC Form :
Med Diversified Inc.
Annual Meeting Of Stockholders
September 9, 2003
JAMES K. HAPP has served as chief executive officer of our subsidiary, Tender Loving Care Health Care Services, Inc., since October 2002.
Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency. (1999-2002 by deduction of SEC statement)
Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationwide and more than $1 billion in revenue in 1997. In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations (At least1997 until 1999)
Participated in the "DIVESTITURE"...Where did this divestiture 'divest' to?
Thursday, August 7, 2008
Long Term Insurance Fraud; How To Avoid It
August 6, 2008
Long Term Insurance Fraud: How To Avoid It
by Terry Stanfield
We do not live in a perfect world and the risk of fraud exists. It may be a fraud through a company offering you products, or it may be fraud through con artists, but the sad truth is it exists. Long-term care insurance is not exempt from the risk of fraud, and there are those out there who will try and benefit off your misfortune and leave you with nothing. One of the important things you can learn from the mistakes of others is how to avoid being a victim of insurance fraud.
Obviously, the first thing anyone should consider when they are thinking of getting long-term care insurance is research. Researching a company is one of the best ways to prevent long-term insurance fraud. When you look at the record of a company, you will be given a clear indication of how they will treat you and your money.
You should look into the financial rating of a company to determine how legit it is, and how stable it is. Standard & Poor determines the strength of insurance companies, as well as giving detailed financial profiles on thousands of insurance companies. You can also look at Fitch Ratings, which give financial strength ratings for many insurance companies.
When you decide on a long-term care insurance policy, make sure you get the policy when you meet with the insurance broker. Do not fall for the line of 'It is all in the brochure.' Usually, it is not. You should be able to get the policy, in writing, when you meet with the broker and before you sign it, make sure you read it very carefully, even if you have to take it home to do so.
When you get a policy, you are asked for a month's premium up front to process the application. If you choose not to accept the policy or you are declined, you should get your money back in full.
You can also talk to friends of yours to find out what insurance company they go through for their own long-term care insurance policies, if they do. However, do not accept their word because they could be victims of long-term insurance fraud and not even know it yet. Just research the company and if you find out something troubling, let them know. Conclusion Long-term care insurance is one of the best things you can do to make sure you are not a financial burden on your family. However, you do not want to give someone your money and find out later that you were a victim of fraud. Then, with all the money you put in, you come up with nothing and that is a horrible situation to be in. Do your research, ask questions, don't sign anything without reading it and always make clear what you expect up front. If you do this, you should be okay and be able to prevent yourself from becoming a victim of long-term care insurance fraud. You should just ask for help from an insurance representative who specializes in long term care insurance to answer any questions.
Long Term Insurance Fraud: How To Avoid It
by Terry Stanfield
We do not live in a perfect world and the risk of fraud exists. It may be a fraud through a company offering you products, or it may be fraud through con artists, but the sad truth is it exists. Long-term care insurance is not exempt from the risk of fraud, and there are those out there who will try and benefit off your misfortune and leave you with nothing. One of the important things you can learn from the mistakes of others is how to avoid being a victim of insurance fraud.
Obviously, the first thing anyone should consider when they are thinking of getting long-term care insurance is research. Researching a company is one of the best ways to prevent long-term insurance fraud. When you look at the record of a company, you will be given a clear indication of how they will treat you and your money.
You should look into the financial rating of a company to determine how legit it is, and how stable it is. Standard & Poor determines the strength of insurance companies, as well as giving detailed financial profiles on thousands of insurance companies. You can also look at Fitch Ratings, which give financial strength ratings for many insurance companies.
When you decide on a long-term care insurance policy, make sure you get the policy when you meet with the insurance broker. Do not fall for the line of 'It is all in the brochure.' Usually, it is not. You should be able to get the policy, in writing, when you meet with the broker and before you sign it, make sure you read it very carefully, even if you have to take it home to do so.
When you get a policy, you are asked for a month's premium up front to process the application. If you choose not to accept the policy or you are declined, you should get your money back in full.
You can also talk to friends of yours to find out what insurance company they go through for their own long-term care insurance policies, if they do. However, do not accept their word because they could be victims of long-term insurance fraud and not even know it yet. Just research the company and if you find out something troubling, let them know. Conclusion Long-term care insurance is one of the best things you can do to make sure you are not a financial burden on your family. However, you do not want to give someone your money and find out later that you were a victim of fraud. Then, with all the money you put in, you come up with nothing and that is a horrible situation to be in. Do your research, ask questions, don't sign anything without reading it and always make clear what you expect up front. If you do this, you should be okay and be able to prevent yourself from becoming a victim of long-term care insurance fraud. You should just ask for help from an insurance representative who specializes in long term care insurance to answer any questions.
Medicaid Paid $373,810.65 .......
A Dallas woman, Rebecca Swanson, who owned and operated a drug and alcohol counseling service in Dallas, pled guilty in federal court to health care fraud and aiding and abetting. Swanson faces a maximum statutory sentence of 10 years in prison, a $250,000 fine and restitution arising from all relevant conduct.
A federal grand jury indicted Swanson, in February on one count of conspiracy to commit health care fraud and four counts of health care fraud, and a warrant was issued for her arrest. In May she was arrested and she has been in federal custody since that time.
From April 2001 to August 2003, Swanson owned and operated Life Share Therapy Foundation (LSTF), a counseling services business located first in Dallas and then later in Lancaster, Texas. She made financial decisions for the business and controlled LSTF’s bank account. In May 2001 LSTF was granted a Texas Medicaid provider number was approved by Medicaid to render counseling services through a Medicaid program known as School Health and Related Services (SHARS). Services available under SHARS included counseling for children who had suffered emotional, psychological, or other forms of abuse. Medicaid reimbursed providers of such counseling a preset rate for each 15-minute segment of counseling services rendered.
From May 2001 through August 2003, Swanson, using LSTF’s Medicaid provider number, executed a scheme to defraud Texas Medicaid by submitting fraudulent claims falsely representing that LSTF had provided individual counseling services through SHARS to Medicaid clients, when in fact, they had not. Swanson’s fraudulent claims also falsely represented that the Medicaid clients for whom the claims were submitted had suffered child abuse, emotional abuse or psychological abuse. Each bogus claim submitted by Swanson sought reimbursement for multiple 15-minute segment counseling sessions, falsely representing that the duration of each session had been no less than one hour and as long as two hours.
Rebecca Swanson admitted that a result of the fraudulent claims she submitted through LSTF, Medicaid paid a total of $373,810.65 to LSTF. Swanson admits using these funds for her own personal use.
A federal grand jury indicted Swanson, in February on one count of conspiracy to commit health care fraud and four counts of health care fraud, and a warrant was issued for her arrest. In May she was arrested and she has been in federal custody since that time.
From April 2001 to August 2003, Swanson owned and operated Life Share Therapy Foundation (LSTF), a counseling services business located first in Dallas and then later in Lancaster, Texas. She made financial decisions for the business and controlled LSTF’s bank account. In May 2001 LSTF was granted a Texas Medicaid provider number was approved by Medicaid to render counseling services through a Medicaid program known as School Health and Related Services (SHARS). Services available under SHARS included counseling for children who had suffered emotional, psychological, or other forms of abuse. Medicaid reimbursed providers of such counseling a preset rate for each 15-minute segment of counseling services rendered.
From May 2001 through August 2003, Swanson, using LSTF’s Medicaid provider number, executed a scheme to defraud Texas Medicaid by submitting fraudulent claims falsely representing that LSTF had provided individual counseling services through SHARS to Medicaid clients, when in fact, they had not. Swanson’s fraudulent claims also falsely represented that the Medicaid clients for whom the claims were submitted had suffered child abuse, emotional abuse or psychological abuse. Each bogus claim submitted by Swanson sought reimbursement for multiple 15-minute segment counseling sessions, falsely representing that the duration of each session had been no less than one hour and as long as two hours.
Rebecca Swanson admitted that a result of the fraudulent claims she submitted through LSTF, Medicaid paid a total of $373,810.65 to LSTF. Swanson admits using these funds for her own personal use.
The 21-count indictment, which was unsealed Wednesday, charged them with conspiring to receive and take kickbacks for patient referrals and to commit
FBI Raids Hospitals, Arrests CEO
Previous posts on Health Care Renewal have featured a rogues gallery of disgraced leaders of health care organizations. For example, we recently discussed a former hospital CEO who concealed that he had served time in the US Navy's brig. The Los Angeles Times just reported a story that suggests a new low in hospital leadership,
FBI agents served search warrants this morning on three hospitals as part of an investigation into alleged Medicare fraud involving homeless patients who were recruited from skid row.
Dr. Rudra Sabaratnam, an owner and the chief executive of City of Angels Medical Center, and Estill Mitts, an alleged patient recruiter, were indicted by a federal grand jury last week on 21 counts of healthcare fraud, money laundering and income tax evasion.
The men were arrested this morning as part of the federal government's criminal investigation, according to FBI spokeswoman Laura Eimiller.
''It's a scheme that ranged from street operatives to the CEO of a hospital,' said U.S. Atty. Thomas P. O'Brien, adding that he expects several more arrests in coming weeks.
At the same time, Los Angeles City Atty. Rocky Delgadillo announced civil litigation against the three hospitals and their operators in what officials said was a 'scheme to defraud the Medi-Cal and Medicare programs out of millions of dollars.'
Beginning at 8 a.m., agents working with the federal Department of Health and Human Services, the Internal Revenue Service and the California Department of Justice raided City of Angels Medical Center, Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center.
The raids cap what law enforcement sources told The Times was a nearly two-year investigation of alleged medical fraud on skid row.
The city attorney's office alleged that the hospitals tried to fill empty beds in a bid to boost their finances.
The hospitals allegedly were aided by a patient recruiting operation on skid row that plucked homeless people from the streets and delivered them with fake medical conditions to the hospitals.
Metropolitan Medical Center in 2006 was accused by the Los Angeles Police Department of using ambulances to 'dump' five patients in one day onto the streets of the downtown skid row area against their will after their discharge from the hospital. At the time, officials at the hospital strongly denied any wrongdoing.
But the city attorney now alleges that those patients had been recruited 'by runners' who directed them to an assessment center on 7th Street, where their Medicare and Medi-Cal benefits eligibility was checked and a 'fabricated description of conditions' was prepared by non-doctors so they could be eligible for treatment. All five of the patients were admitted to Metropolitan Medical Center.
Each of the patients received $20 to $30 when they returned to the assessment center after spending one to three days in the hospital, according to the suit.
'Within the past four years, hundreds, if not thousands of other homeless persons in skid row have been recruited, hospitalized, treated and discharged in a manner substantially similar . . . as part of a long-running scheme to bilk the Medicare and Medi-Cal programs out of millions of dollars by causing unnecessary hospitalization for paid recruits,' the lawsuit alleges.
The list of the accused is striking.
Among those named in the suit are Pacific Health Care Corp.; Los Angeles Metropolitan Medical Center, its Chief Executive John Fenton and admitting physician Frederick Rundall; Tustin Hospital and Medical Center, its Chief Executive Daniel Davis, Chief Financial Officer Vincent Rubio and admitting physicians Kenneth Thaler and Al-Reza Tajik; and City of Angels Medical Center and its owner-operators Robert Borseau and Sabaratnam. Mitts, the owner and manager of Metropolitan Healthcare LLC and the president of the 7th Street Christian Day Center, which was until recently located on skid row, is also named in the suit.
City attorneys allege that the Tustin hospital was guaranteed 40 to 50 patients a month while City of Angels got 25 to 30 patients month. Metropolitan Medical Center received patients whenever beds were available, according to the suit. City attorneys allege the admitting Drs. Rundall, Thaler and Tajik did not see their patients until shortly before their discharge. City attorneys allege that for patient referrals, Mitts' group was paid $20,000 per month each from Metropolitan Medical Center and Tustin, while City of Angels paid between $400 to $1,000 a week to the recruiting group.
The suit also alleges that the Tustin hospital's chief financial officer personally received a $3,500-a-month kickback from Mitts' group to ensure that Tustin continued to take homeless patients from the skid row center.
The Associated Press (here, via the San Diego Union-Tribune) reported that two people, including one hospital CEO, were arrested during the raids.
FBI agents arrested Rudra Sabaratnam, 64, chief executive officer of City of Angels hospital, and Estill Mitts, 64, who operated the 7th Street Assessment Center, where people are screened for health needs, the U.S. attorney's office said in a statement.A federal jury last week indicted both men. The 21-count indictment, which was unsealed Wednesday, charged them with conspiring to receive and take kickbacks for patient referrals and to commit health care fraud.
Sabaratnam also was charged with paying kickbacks while Mitts also was charged with money laundering and tax evasion.
If convicted, Sabaratnam could face 50 years in federal prison, and Mitts could face 140 years, authorities said.
We have often discussed how health care has come to be dominated more and more by ever larger organizations. Thus, the leadership of these organizations has increasing influence over health care, and hence on people's health and safety. Yet on this blog we have documented more and ever sleazier examples of ill-informed, incompetent, self-interested, and even corrupt leadership of health care organizations.
The story above is of allegations, indictments, and lawsuits. But if half of the allegations in it are true, it would represent a new low for hospital leadership.
Thus, I raise again a proposal for licensure of leaders of all organizations that affect health care, starting with hospitals, academic medical centers, and hospital systems; but also including managed care organizations and health care insurers; drug, biotechnology, and device companies; health information technology companies; etc, etc, etc. Such licensure could assure that leaders have some minimum level of knowledge about and exposure to health care; and that they must conform to some ethical standards. Licensure could be subject to removal under due process. Clearly, licensing health care organizational leaders would not solve all or most of health care's problems. But it would at least assure some minimum standard of leadership.
http://hcrenewal.blogspot.com/2008/08/fbi-raids-hospitals-arrests-ceo.html
Previous posts on Health Care Renewal have featured a rogues gallery of disgraced leaders of health care organizations. For example, we recently discussed a former hospital CEO who concealed that he had served time in the US Navy's brig. The Los Angeles Times just reported a story that suggests a new low in hospital leadership,
FBI agents served search warrants this morning on three hospitals as part of an investigation into alleged Medicare fraud involving homeless patients who were recruited from skid row.
Dr. Rudra Sabaratnam, an owner and the chief executive of City of Angels Medical Center, and Estill Mitts, an alleged patient recruiter, were indicted by a federal grand jury last week on 21 counts of healthcare fraud, money laundering and income tax evasion.
The men were arrested this morning as part of the federal government's criminal investigation, according to FBI spokeswoman Laura Eimiller.
''It's a scheme that ranged from street operatives to the CEO of a hospital,' said U.S. Atty. Thomas P. O'Brien, adding that he expects several more arrests in coming weeks.
At the same time, Los Angeles City Atty. Rocky Delgadillo announced civil litigation against the three hospitals and their operators in what officials said was a 'scheme to defraud the Medi-Cal and Medicare programs out of millions of dollars.'
Beginning at 8 a.m., agents working with the federal Department of Health and Human Services, the Internal Revenue Service and the California Department of Justice raided City of Angels Medical Center, Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center.
The raids cap what law enforcement sources told The Times was a nearly two-year investigation of alleged medical fraud on skid row.
The city attorney's office alleged that the hospitals tried to fill empty beds in a bid to boost their finances.
The hospitals allegedly were aided by a patient recruiting operation on skid row that plucked homeless people from the streets and delivered them with fake medical conditions to the hospitals.
Metropolitan Medical Center in 2006 was accused by the Los Angeles Police Department of using ambulances to 'dump' five patients in one day onto the streets of the downtown skid row area against their will after their discharge from the hospital. At the time, officials at the hospital strongly denied any wrongdoing.
But the city attorney now alleges that those patients had been recruited 'by runners' who directed them to an assessment center on 7th Street, where their Medicare and Medi-Cal benefits eligibility was checked and a 'fabricated description of conditions' was prepared by non-doctors so they could be eligible for treatment. All five of the patients were admitted to Metropolitan Medical Center.
Each of the patients received $20 to $30 when they returned to the assessment center after spending one to three days in the hospital, according to the suit.
'Within the past four years, hundreds, if not thousands of other homeless persons in skid row have been recruited, hospitalized, treated and discharged in a manner substantially similar . . . as part of a long-running scheme to bilk the Medicare and Medi-Cal programs out of millions of dollars by causing unnecessary hospitalization for paid recruits,' the lawsuit alleges.
The list of the accused is striking.
Among those named in the suit are Pacific Health Care Corp.; Los Angeles Metropolitan Medical Center, its Chief Executive John Fenton and admitting physician Frederick Rundall; Tustin Hospital and Medical Center, its Chief Executive Daniel Davis, Chief Financial Officer Vincent Rubio and admitting physicians Kenneth Thaler and Al-Reza Tajik; and City of Angels Medical Center and its owner-operators Robert Borseau and Sabaratnam. Mitts, the owner and manager of Metropolitan Healthcare LLC and the president of the 7th Street Christian Day Center, which was until recently located on skid row, is also named in the suit.
City attorneys allege that the Tustin hospital was guaranteed 40 to 50 patients a month while City of Angels got 25 to 30 patients month. Metropolitan Medical Center received patients whenever beds were available, according to the suit. City attorneys allege the admitting Drs. Rundall, Thaler and Tajik did not see their patients until shortly before their discharge. City attorneys allege that for patient referrals, Mitts' group was paid $20,000 per month each from Metropolitan Medical Center and Tustin, while City of Angels paid between $400 to $1,000 a week to the recruiting group.
The suit also alleges that the Tustin hospital's chief financial officer personally received a $3,500-a-month kickback from Mitts' group to ensure that Tustin continued to take homeless patients from the skid row center.
The Associated Press (here, via the San Diego Union-Tribune) reported that two people, including one hospital CEO, were arrested during the raids.
FBI agents arrested Rudra Sabaratnam, 64, chief executive officer of City of Angels hospital, and Estill Mitts, 64, who operated the 7th Street Assessment Center, where people are screened for health needs, the U.S. attorney's office said in a statement.A federal jury last week indicted both men. The 21-count indictment, which was unsealed Wednesday, charged them with conspiring to receive and take kickbacks for patient referrals and to commit health care fraud.
Sabaratnam also was charged with paying kickbacks while Mitts also was charged with money laundering and tax evasion.
If convicted, Sabaratnam could face 50 years in federal prison, and Mitts could face 140 years, authorities said.
We have often discussed how health care has come to be dominated more and more by ever larger organizations. Thus, the leadership of these organizations has increasing influence over health care, and hence on people's health and safety. Yet on this blog we have documented more and ever sleazier examples of ill-informed, incompetent, self-interested, and even corrupt leadership of health care organizations.
The story above is of allegations, indictments, and lawsuits. But if half of the allegations in it are true, it would represent a new low for hospital leadership.
Thus, I raise again a proposal for licensure of leaders of all organizations that affect health care, starting with hospitals, academic medical centers, and hospital systems; but also including managed care organizations and health care insurers; drug, biotechnology, and device companies; health information technology companies; etc, etc, etc. Such licensure could assure that leaders have some minimum level of knowledge about and exposure to health care; and that they must conform to some ethical standards. Licensure could be subject to removal under due process. Clearly, licensing health care organizational leaders would not solve all or most of health care's problems. But it would at least assure some minimum standard of leadership.
http://hcrenewal.blogspot.com/2008/08/fbi-raids-hospitals-arrests-ceo.html
Wednesday, August 6, 2008
HMO's are currently embracing "pay for performance"
Quality of Care
August 5th, 2008
by Nick Jacobs
When the word quality was discussed back in the 80's, you often heard of the Baldridge Award or TQM, total quality management, as the programs that would take your organization to new heights. Today, more often than not, we hear about the Toyota Model of management or a more dated Six Sigma, 99.999999% approach to perfection. Recently, though, the government has taken over the quality quest in health care to push this industry to achieve levels of perfection.
U.S. medicine is about to launch into a new world order that will functionally save the government money, but will it produce quality? Of course, when it comes to life and death issues, there is no question that we must strive toward perfection, but when it just comes to human beings attempting to function in this very competitive environment, the game change causes casualties for both the providers and the patients.
The Government is taking a three-pronged approach to improve quality in health care:
1. They are pushing quality through public reporting. 2. Enforcing quality through the False Claims Act. 3. Incentivizing quality through payment reform.
Senator Chuck Grassley is quoted as saying, "Today, Medicare rewards poor quality care. That is just plain wrong, and we need to address this problem." HMO's are currently embracing "pay for performance" plans for physicians and hospitals. Medicare is introducing value based purchase plans and is proposing the linking of quality outcomes to physician payments.
As I have written before, hospitals will no longer be paid for hospital acquired conditions. That seems like a rather simple fix, but to appropriately determine if the condition was not acquired at the hospital, extensive testing must be added pre-admission at considerable costs to the hospitals. These additional unrecompensed costs be balanced by having fewer employees per patient, less updated equipment, and less flexibility to use more expensive drugs, but it will determine if your infection was present upon admission.
James G. Sheehan, Medicaid Inspector General of New York said, "We are reviewing assorted sources of quality information on your facility to see what it says and if it is consistent. You should be doing the same."
The spoken goal is to work toward perfection, but the underlying goals are also directed toward the financial implications. The public reporting of quality of care is intended to: correct inappropriate behavior; identify over payments, or deny payments altogether.
The False Claims Act, on the other hand has more draconian goals. When asked how he viewed the False Claims Act, Kirk Ogrosky, Deputy Chief for Health Care Fraud said, "You will see more and more physicians going to jail." Just what we need when there aren't enough docs to go around now.
Will these changes improve health care delivery? For the patients who can find the few docs and hospitals that will be left, there may be some improvement, but my personal opinion is that it will break the back of an already broken system and force more small and mid-sized hospitals out of business.
I recently had a conversation with a young medical computer specialist who took care of physician practices. He said, "Doctors and hospitals haven't figured it out yet, but they are simply becoming data entry centers for 'Big Brother' as the facts and figures are accumulated to be used against them in any manner that the payers may decide."
Maybe this is all too complicated to get our arms around, but if there are 78 M Baby Boomers and the Medicare Trust Fund is heading toward bankruptcy, then we probably will see every rule in the book being applied to keep from paying hospitals and doctors. There will simply not be enough money to go around.
Is that quality? Will these initiatives improve health care?
Prevention, wellness, optimal healing environments, and systems approaches to health and wellness will improve healthcare. Improvement will not come from the new rules that are unfolding. They may save some money, but how many lives?
August 5th, 2008
by Nick Jacobs
When the word quality was discussed back in the 80's, you often heard of the Baldridge Award or TQM, total quality management, as the programs that would take your organization to new heights. Today, more often than not, we hear about the Toyota Model of management or a more dated Six Sigma, 99.999999% approach to perfection. Recently, though, the government has taken over the quality quest in health care to push this industry to achieve levels of perfection.
U.S. medicine is about to launch into a new world order that will functionally save the government money, but will it produce quality? Of course, when it comes to life and death issues, there is no question that we must strive toward perfection, but when it just comes to human beings attempting to function in this very competitive environment, the game change causes casualties for both the providers and the patients.
The Government is taking a three-pronged approach to improve quality in health care:
1. They are pushing quality through public reporting. 2. Enforcing quality through the False Claims Act. 3. Incentivizing quality through payment reform.
Senator Chuck Grassley is quoted as saying, "Today, Medicare rewards poor quality care. That is just plain wrong, and we need to address this problem." HMO's are currently embracing "pay for performance" plans for physicians and hospitals. Medicare is introducing value based purchase plans and is proposing the linking of quality outcomes to physician payments.
As I have written before, hospitals will no longer be paid for hospital acquired conditions. That seems like a rather simple fix, but to appropriately determine if the condition was not acquired at the hospital, extensive testing must be added pre-admission at considerable costs to the hospitals. These additional unrecompensed costs be balanced by having fewer employees per patient, less updated equipment, and less flexibility to use more expensive drugs, but it will determine if your infection was present upon admission.
James G. Sheehan, Medicaid Inspector General of New York said, "We are reviewing assorted sources of quality information on your facility to see what it says and if it is consistent. You should be doing the same."
The spoken goal is to work toward perfection, but the underlying goals are also directed toward the financial implications. The public reporting of quality of care is intended to: correct inappropriate behavior; identify over payments, or deny payments altogether.
The False Claims Act, on the other hand has more draconian goals. When asked how he viewed the False Claims Act, Kirk Ogrosky, Deputy Chief for Health Care Fraud said, "You will see more and more physicians going to jail." Just what we need when there aren't enough docs to go around now.
Will these changes improve health care delivery? For the patients who can find the few docs and hospitals that will be left, there may be some improvement, but my personal opinion is that it will break the back of an already broken system and force more small and mid-sized hospitals out of business.
I recently had a conversation with a young medical computer specialist who took care of physician practices. He said, "Doctors and hospitals haven't figured it out yet, but they are simply becoming data entry centers for 'Big Brother' as the facts and figures are accumulated to be used against them in any manner that the payers may decide."
Maybe this is all too complicated to get our arms around, but if there are 78 M Baby Boomers and the Medicare Trust Fund is heading toward bankruptcy, then we probably will see every rule in the book being applied to keep from paying hospitals and doctors. There will simply not be enough money to go around.
Is that quality? Will these initiatives improve health care?
Prevention, wellness, optimal healing environments, and systems approaches to health and wellness will improve healthcare. Improvement will not come from the new rules that are unfolding. They may save some money, but how many lives?
"...masters of Medicare fraud, prosecutors say"
A Rolls-Royce valued at $200,000 once belonged to Eduardo Moreno, a fugitive wanted in connection with Medicare fraud.
Gallery | Fugitives suspected of fraud
The Benitez brothers were masters of Medicare fraud, prosecutors say.
They spent their Medicare millions on Mediterranean-style homes, apartments, hotels, boats, a helicopter, even a water park — all in the resort area of Bavaro, Dominican Republic, court records show.
After they were indicted on fraud charges in late May, Carlos, Jose and Luis Benitez used their Cuban passports to travel from Miami to the Dominican Republic, then to Cuba.
The three brothers are accused of defrauding the U.S. government’s health insurance program by billing $110 million in false claims for HIV drug-infusion treatments at their dozen Miami-Dade clinics. Medicare paid their companies about $84 million in reimbursements between 2001 and 2004, according to federal authorities and court records.
The Benitezes — who came to this country in 1995 and became U.S. citizens five years later — have a lot of company. They are among 56 fugitives charged since 2004 with filing at least $272 million in phony Medicare claims before disappearing from Miami-Dade. Collectively, the fugitives absconded with at least $142 million in taxpayer funds.
Thirty-three of the 36 fugitives whose names have been released by authorities are Cuban immigrants, most of whom came to the United States during the past 15 years, according to FBI, immigration and court records obtained by The Miami Herald. Half of those fugitives have fled to Cuba, according to the FBI, which based its information on travel, customs, passports, bank and computer records.
The majority of some 700 Medicare fraud defendants charged since 2004 are immigrants who share an implicit trust when they join small criminal enterprises in South Florida to defraud the government program, according to perpetrators, prosecutors and investigators.
Timothy Delaney, assistant special agent in charge of the FBI’s office in Miami, said Medicare fraud has spread over the past decade in certain pockets of South Florida’s population of 750,000 Cuban Americans — just as it has in heavily populated immigrant communities in other major cities.
Medicare is seen as an easy mark for fraud because it is built on an honor system that pays claims quickly with scant review. Also, the odds of getting caught are low and the odds of making millions are high.
Delaney said certain segments of Cuban immigrants in Miami and Hialeah — just like Armenians in Los Angeles, West Africans in Houston and Russians in New York — trust one another to form mini-rackets.
‘’We have unscrupulous providers, willing doctors and willing practitioners,'’ said Delaney. “They don’t think they’ve committed a crime.'’
CHASING FUGITIVES
Among the known Medicare fugitives who fled to Cuba: Eduardo Moreno, who came to the United States in 1997.
Moreno, 39, used a network of offices to operate medical equipment and HIV drug-infusion scams totaling $7.2 million in false Medicare claims, according to federal court records. He bought himself a $445,000 southwest Miami-Dade home and a $200,000 Rolls-Royce Phantom.
When the FBI arrested him last year on fraud charges, he made a $250,000 bond, then skipped the country — back to Havana, according to the FBI. Agents tracked him through his travel records and his relatives.
Moreno is among at least 18 identified fugitives suspected of fleeing to Cuba — with another 18 escaping to other parts of Latin America, Europe, Canada, Florida or unknown locations, according to the FBI’s account of travel records and other information.
In addition, there are 20 unidentified fugitives whose names remain under seal until their arrests.
‘’A good number of them are Cuban and they will return to Cuba, where, as you know, there is no extradition policy and we have no way to get them back at this point,'’ said Delaney, who headed the FBI’s national healthcare fraud program before transferring to Miami in 2005.
U.S. Sen. Mel Martinez, R-Florida, a Pedro Pan Cuban exile who benefited like thousands of others from the Cuban Adjustment Act, is pushing legislation in Congress to double the criminal and civil penalties for Medicare fraud offenders. While Martinez said he didn’t think Medicare fraud was strictly a ‘’Cuban issue,'’ he also condemned the Cuban government for harboring the fugitives.
‘’My first thought is, it’s one more reason why the Cuban government is an outlaw state because it allows fugitives of justice to find refuge there,'’ Martinez said.
Cuban leaders Fidel Castro and his brother Raul Castro have rarely turned over fugitives of any kind.
Tracking down Medicare fugitives in countries such as the Dominican Republic, however, can be successful because they have extradition agreements with the United States. Federal authorities are working with the Dominican Republic to pursue the Benitez brothers and seize their extensive assets in Bavaro — including a hotel called Cabañas Singapur.
Other assets include more tourist hotels, a Robinson R44 Raven helicopter, apartment complexes, luxury homes, supermarkets and a rental car agency — registered under shell companies or straw names. Dominican officials started seizing properties and freezing their bank accounts in July in cooperation with the U.S. government, which plans to return the proceeds to Medicare.
On Friday, Justice Department prosecutors filed a proposed restraining order in federal court in Miami to ensure the Benitez brothers’ assets are not sold or transferred to other parties.
The Benitez brothers’ fugitive case has made headlines in the Dominican Republic not only because of the U.S. government’s pursuit of their ill-gotten gains. Over the Fourth of July weekend, Carlos Benitez’s daughter and son-in-law — Yanelkis Benitez Ramirez and Lenin Linares Guerrero — were kidnapped. Days later, Dominican authorities rescued the couple.
Meanwhile, FBI agents have traced the Benitez brothers to Havana, according to federal authorities.
In general, the FBI has had little luck capturing Medicare fugitives abroad in recent years. ‘’We’ve had no one returned on a healthcare fraud warrant that I’m aware of,'’ Delaney said.
The one exception: In June 2004, authorities in the Dominican turned over three Medicare fugitives — Ruben Martinez; his daughter, Adriana Ramos, and her husband, Daniel Ramos — who had fled to that country months before their indictment on fraud charges.
They were part of a Miami-Dade family racket headed by Martinez, 57, that was eventually convicted of bilking $14.5 million from Medicare by charging for bogus medical equipment orders such as hospital beds, oxygen tanks and foot arch supports in 2000-02. Federal authorities recovered $1 million from Dominican bank accounts, $900,000 from U.S. banks, real estate, jewelry and a Porsche Boxster.
‘’It was a classic case of international cooperation,'’ said former federal prosecutor Wifredo Ferrer, the lead attorney in the prosecution of Martinez and 11 others. “The three fugitives were Cuban nationals, not citizens of the Dominican Republic. The Dominican authorities deemed them persona non grata and expelled them to the United States.'’
FEDERAL JUDGES
Still, one Medicare fugitive in that case is still at large: Emilio R. Seijo, who is in Cuba, according to the FBI.
The escalating problem of Medicare fraud defendants who flee has become a sore point for federal judges in South Florida.
This spring, the chief judge of the U.S. District Court in Miami raised the issue in a memo to magistrate judges, cautioning them about flight risks. U.S. District Judge Federico Moreno also reviewed Medicare defendants’ bonds in cases before him, citing the unusual pattern of defendants fleeing after they were charged with Medicare fraud and granted bail.
In June, Moreno said in court that “it seems to me that our thinking has to change — that someone from Cuba can flee back to Cuba just like someone from Mexico.'’
Moreno questioned whether the Cuban Adjustment Act — passed by Congress in 1966 to grant asylum and residency to the first wave of Cuban political refugees — was being abused by a new generation of Medicare fraud suspects. The judge wondered aloud “whether someone can be categorized as a political refugee when you can pick up and go back.'’
Moreno raised the point after learning that a former secretary charged in an $11 million Medicare healthcare scheme fled to Cuba with her son and father.
The judge had given Carmen González a $50,000 bond. Her father, Enrique González, who co-signed it, was indicted in May on separate Medicare fraud charges in a $26.2 million HIV-drug scam at other Miami-Dade clinics.
‘’I don’t know what your client’s situation is, but money goes a lot farther in Cuba,'’ the judge told Gonzalez’s attorney, Joel DeFabio. “Dollars do. And the government’s allegation is that dollars are the result of Medicare fraud.'’
Moreno isn’t the only federal judge to be blindsided.
The case of Medicare fraud felon Gustavo Smith illustrates how easy it is for fugitives to leave the United States.
After Smith was convicted on healthcare fraud charges at trial in April, U.S. District Judge Marcia Cooke allowed him to remain free on a $300,000 bond while he awaited sentencing. Prosecutors insisted that Smith be detained. Cooke placed him on home confinement.
On June 11, Smith, who had surrendered his U.S. passport, took an American Airlines flight to Santo Domingo with his girlfriend. How? Smith used his Cuban passport under the name Gustavo Smith Wong. The FBI and Dominican authorities are tracking him down. In early July, Cooke sentenced him in absentia to 10 years and 10 months in prison.
MEDICARE OUTLAWS
One of the obvious reasons that Medicare defendants can evade prosecution is because they’re routinely allowed to post bond before trial. But most of the Medicare defendants who fled since 2004 left South Florida before federal agents could arrest them, according to the FBI and prosecutors. In some cases, suspects get nervous when a colleague is arrested and flee before they can be implicated.
A typical example: Fermin Rey, 49, who emigrated from Cuba in 1995 and was indicted last year on charges of using a series of healthcare corporations to bill Medicare for $5.2 million in bogus medical equipment claims. Rey, described by authorities as a Santeria high priest who used associates as straw owners of his illegal businesses, failed to appear in court and is believed to be in Mexico.
Why do so many Cuban immigrants become Medicare fraud perpetrators? Andy Gomez, a senior fellow at the University of Miami’s Institute for Cuban and Cuban-American Studies, has a theory.
Gomez said some immigrants came with survival instincts cultivated under the totalitarian regime of Fidel Castro. They distrusted and cheated his communist government as a way of getting around the system, but they did not shed that behavior when they came to Miami simply because they were living in a free country.
‘’They are a product of their element,'’ Gomez said. “It’s a very difficult habit to break.'’
FBI agents not only have a hard time tracking down Medicare fugitives, but also their money.
Law enforcement officials suspect that most Medicare defendants who flee — such as the Benitezes — launder their money offshore.
Prosecutor Eric Bustillo, chief of the economic crimes section at the U.S. attorney’s office in Miami, said that once Medicare money is withdrawn from local banks it’s difficult for federal authorities to follow it.
‘’It’s the opposite of drug trafficking,'’ Bustillo said. “The drug traffickers get paid in cash, so they have to find businesses and other ways to launder it. The Medicare providers must receive all of their payments in checks or wire transfers to a designated bank account. So the money can be tracked down to that bank. But they immediately cash it out. And once they do that, who knows where it goes?'’
Federal authorities and money-laundering experts know some of the Medicare fugitives’ money ends up outside the United States. Case in point: the Benitezes’ assets in the Dominican Republic.
But unless authorities can identify the laundered Medicare millions — bank accounts, real estate, cars, boats — they can’t take legal action to go after the assets.
According to money-laundering experts, it’s easy to move dirty money to certain countries.
For a pittance, Medicare violators can hire lawyers offshore to set up shell companies and assist in the opening of related bank accounts, said Brett Wolf, a U.S. money-laundering analyst with Complinet, a London-based firm that helps financial institutions meet their compliance obligations.
‘’Cash smuggling is almost certainly playing a role,'’ Wolf said. “Considering the heavily state-controlled nature of Cuba’s financial network, it’s very unlikely that these Medicare funds are being moved through the formal banking system.'’
Fugitives, based in a country such as the Bahamas or Mexico where there is regular travel to Cuba, can go back and forth to the island, carrying thousands in cash that can be exchanged for a currency called CUCs (pronounced “kooks'’).
But it would be risky business for fugitives carrying a lot of cash, say $50,000, to attempt to bribe communist government officials unless they have connections.
Still, a Medicare fugitive with hundreds of thousands or even millions of dollars stashed in offshore accounts could live like a tycoon in Cuba, where the monthly salary averages $17.
Source
Gallery | Fugitives suspected of fraud
The Benitez brothers were masters of Medicare fraud, prosecutors say.
They spent their Medicare millions on Mediterranean-style homes, apartments, hotels, boats, a helicopter, even a water park — all in the resort area of Bavaro, Dominican Republic, court records show.
After they were indicted on fraud charges in late May, Carlos, Jose and Luis Benitez used their Cuban passports to travel from Miami to the Dominican Republic, then to Cuba.
The three brothers are accused of defrauding the U.S. government’s health insurance program by billing $110 million in false claims for HIV drug-infusion treatments at their dozen Miami-Dade clinics. Medicare paid their companies about $84 million in reimbursements between 2001 and 2004, according to federal authorities and court records.
The Benitezes — who came to this country in 1995 and became U.S. citizens five years later — have a lot of company. They are among 56 fugitives charged since 2004 with filing at least $272 million in phony Medicare claims before disappearing from Miami-Dade. Collectively, the fugitives absconded with at least $142 million in taxpayer funds.
Thirty-three of the 36 fugitives whose names have been released by authorities are Cuban immigrants, most of whom came to the United States during the past 15 years, according to FBI, immigration and court records obtained by The Miami Herald. Half of those fugitives have fled to Cuba, according to the FBI, which based its information on travel, customs, passports, bank and computer records.
The majority of some 700 Medicare fraud defendants charged since 2004 are immigrants who share an implicit trust when they join small criminal enterprises in South Florida to defraud the government program, according to perpetrators, prosecutors and investigators.
Timothy Delaney, assistant special agent in charge of the FBI’s office in Miami, said Medicare fraud has spread over the past decade in certain pockets of South Florida’s population of 750,000 Cuban Americans — just as it has in heavily populated immigrant communities in other major cities.
Medicare is seen as an easy mark for fraud because it is built on an honor system that pays claims quickly with scant review. Also, the odds of getting caught are low and the odds of making millions are high.
Delaney said certain segments of Cuban immigrants in Miami and Hialeah — just like Armenians in Los Angeles, West Africans in Houston and Russians in New York — trust one another to form mini-rackets.
‘’We have unscrupulous providers, willing doctors and willing practitioners,'’ said Delaney. “They don’t think they’ve committed a crime.'’
CHASING FUGITIVES
Among the known Medicare fugitives who fled to Cuba: Eduardo Moreno, who came to the United States in 1997.
Moreno, 39, used a network of offices to operate medical equipment and HIV drug-infusion scams totaling $7.2 million in false Medicare claims, according to federal court records. He bought himself a $445,000 southwest Miami-Dade home and a $200,000 Rolls-Royce Phantom.
When the FBI arrested him last year on fraud charges, he made a $250,000 bond, then skipped the country — back to Havana, according to the FBI. Agents tracked him through his travel records and his relatives.
Moreno is among at least 18 identified fugitives suspected of fleeing to Cuba — with another 18 escaping to other parts of Latin America, Europe, Canada, Florida or unknown locations, according to the FBI’s account of travel records and other information.
In addition, there are 20 unidentified fugitives whose names remain under seal until their arrests.
‘’A good number of them are Cuban and they will return to Cuba, where, as you know, there is no extradition policy and we have no way to get them back at this point,'’ said Delaney, who headed the FBI’s national healthcare fraud program before transferring to Miami in 2005.
U.S. Sen. Mel Martinez, R-Florida, a Pedro Pan Cuban exile who benefited like thousands of others from the Cuban Adjustment Act, is pushing legislation in Congress to double the criminal and civil penalties for Medicare fraud offenders. While Martinez said he didn’t think Medicare fraud was strictly a ‘’Cuban issue,'’ he also condemned the Cuban government for harboring the fugitives.
‘’My first thought is, it’s one more reason why the Cuban government is an outlaw state because it allows fugitives of justice to find refuge there,'’ Martinez said.
Cuban leaders Fidel Castro and his brother Raul Castro have rarely turned over fugitives of any kind.
Tracking down Medicare fugitives in countries such as the Dominican Republic, however, can be successful because they have extradition agreements with the United States. Federal authorities are working with the Dominican Republic to pursue the Benitez brothers and seize their extensive assets in Bavaro — including a hotel called Cabañas Singapur.
Other assets include more tourist hotels, a Robinson R44 Raven helicopter, apartment complexes, luxury homes, supermarkets and a rental car agency — registered under shell companies or straw names. Dominican officials started seizing properties and freezing their bank accounts in July in cooperation with the U.S. government, which plans to return the proceeds to Medicare.
On Friday, Justice Department prosecutors filed a proposed restraining order in federal court in Miami to ensure the Benitez brothers’ assets are not sold or transferred to other parties.
The Benitez brothers’ fugitive case has made headlines in the Dominican Republic not only because of the U.S. government’s pursuit of their ill-gotten gains. Over the Fourth of July weekend, Carlos Benitez’s daughter and son-in-law — Yanelkis Benitez Ramirez and Lenin Linares Guerrero — were kidnapped. Days later, Dominican authorities rescued the couple.
Meanwhile, FBI agents have traced the Benitez brothers to Havana, according to federal authorities.
In general, the FBI has had little luck capturing Medicare fugitives abroad in recent years. ‘’We’ve had no one returned on a healthcare fraud warrant that I’m aware of,'’ Delaney said.
The one exception: In June 2004, authorities in the Dominican turned over three Medicare fugitives — Ruben Martinez; his daughter, Adriana Ramos, and her husband, Daniel Ramos — who had fled to that country months before their indictment on fraud charges.
They were part of a Miami-Dade family racket headed by Martinez, 57, that was eventually convicted of bilking $14.5 million from Medicare by charging for bogus medical equipment orders such as hospital beds, oxygen tanks and foot arch supports in 2000-02. Federal authorities recovered $1 million from Dominican bank accounts, $900,000 from U.S. banks, real estate, jewelry and a Porsche Boxster.
‘’It was a classic case of international cooperation,'’ said former federal prosecutor Wifredo Ferrer, the lead attorney in the prosecution of Martinez and 11 others. “The three fugitives were Cuban nationals, not citizens of the Dominican Republic. The Dominican authorities deemed them persona non grata and expelled them to the United States.'’
FEDERAL JUDGES
Still, one Medicare fugitive in that case is still at large: Emilio R. Seijo, who is in Cuba, according to the FBI.
The escalating problem of Medicare fraud defendants who flee has become a sore point for federal judges in South Florida.
This spring, the chief judge of the U.S. District Court in Miami raised the issue in a memo to magistrate judges, cautioning them about flight risks. U.S. District Judge Federico Moreno also reviewed Medicare defendants’ bonds in cases before him, citing the unusual pattern of defendants fleeing after they were charged with Medicare fraud and granted bail.
In June, Moreno said in court that “it seems to me that our thinking has to change — that someone from Cuba can flee back to Cuba just like someone from Mexico.'’
Moreno questioned whether the Cuban Adjustment Act — passed by Congress in 1966 to grant asylum and residency to the first wave of Cuban political refugees — was being abused by a new generation of Medicare fraud suspects. The judge wondered aloud “whether someone can be categorized as a political refugee when you can pick up and go back.'’
Moreno raised the point after learning that a former secretary charged in an $11 million Medicare healthcare scheme fled to Cuba with her son and father.
The judge had given Carmen González a $50,000 bond. Her father, Enrique González, who co-signed it, was indicted in May on separate Medicare fraud charges in a $26.2 million HIV-drug scam at other Miami-Dade clinics.
‘’I don’t know what your client’s situation is, but money goes a lot farther in Cuba,'’ the judge told Gonzalez’s attorney, Joel DeFabio. “Dollars do. And the government’s allegation is that dollars are the result of Medicare fraud.'’
Moreno isn’t the only federal judge to be blindsided.
The case of Medicare fraud felon Gustavo Smith illustrates how easy it is for fugitives to leave the United States.
After Smith was convicted on healthcare fraud charges at trial in April, U.S. District Judge Marcia Cooke allowed him to remain free on a $300,000 bond while he awaited sentencing. Prosecutors insisted that Smith be detained. Cooke placed him on home confinement.
On June 11, Smith, who had surrendered his U.S. passport, took an American Airlines flight to Santo Domingo with his girlfriend. How? Smith used his Cuban passport under the name Gustavo Smith Wong. The FBI and Dominican authorities are tracking him down. In early July, Cooke sentenced him in absentia to 10 years and 10 months in prison.
MEDICARE OUTLAWS
One of the obvious reasons that Medicare defendants can evade prosecution is because they’re routinely allowed to post bond before trial. But most of the Medicare defendants who fled since 2004 left South Florida before federal agents could arrest them, according to the FBI and prosecutors. In some cases, suspects get nervous when a colleague is arrested and flee before they can be implicated.
A typical example: Fermin Rey, 49, who emigrated from Cuba in 1995 and was indicted last year on charges of using a series of healthcare corporations to bill Medicare for $5.2 million in bogus medical equipment claims. Rey, described by authorities as a Santeria high priest who used associates as straw owners of his illegal businesses, failed to appear in court and is believed to be in Mexico.
Why do so many Cuban immigrants become Medicare fraud perpetrators? Andy Gomez, a senior fellow at the University of Miami’s Institute for Cuban and Cuban-American Studies, has a theory.
Gomez said some immigrants came with survival instincts cultivated under the totalitarian regime of Fidel Castro. They distrusted and cheated his communist government as a way of getting around the system, but they did not shed that behavior when they came to Miami simply because they were living in a free country.
‘’They are a product of their element,'’ Gomez said. “It’s a very difficult habit to break.'’
FBI agents not only have a hard time tracking down Medicare fugitives, but also their money.
Law enforcement officials suspect that most Medicare defendants who flee — such as the Benitezes — launder their money offshore.
Prosecutor Eric Bustillo, chief of the economic crimes section at the U.S. attorney’s office in Miami, said that once Medicare money is withdrawn from local banks it’s difficult for federal authorities to follow it.
‘’It’s the opposite of drug trafficking,'’ Bustillo said. “The drug traffickers get paid in cash, so they have to find businesses and other ways to launder it. The Medicare providers must receive all of their payments in checks or wire transfers to a designated bank account. So the money can be tracked down to that bank. But they immediately cash it out. And once they do that, who knows where it goes?'’
Federal authorities and money-laundering experts know some of the Medicare fugitives’ money ends up outside the United States. Case in point: the Benitezes’ assets in the Dominican Republic.
But unless authorities can identify the laundered Medicare millions — bank accounts, real estate, cars, boats — they can’t take legal action to go after the assets.
According to money-laundering experts, it’s easy to move dirty money to certain countries.
For a pittance, Medicare violators can hire lawyers offshore to set up shell companies and assist in the opening of related bank accounts, said Brett Wolf, a U.S. money-laundering analyst with Complinet, a London-based firm that helps financial institutions meet their compliance obligations.
‘’Cash smuggling is almost certainly playing a role,'’ Wolf said. “Considering the heavily state-controlled nature of Cuba’s financial network, it’s very unlikely that these Medicare funds are being moved through the formal banking system.'’
Fugitives, based in a country such as the Bahamas or Mexico where there is regular travel to Cuba, can go back and forth to the island, carrying thousands in cash that can be exchanged for a currency called CUCs (pronounced “kooks'’).
But it would be risky business for fugitives carrying a lot of cash, say $50,000, to attempt to bribe communist government officials unless they have connections.
Still, a Medicare fugitive with hundreds of thousands or even millions of dollars stashed in offshore accounts could live like a tycoon in Cuba, where the monthly salary averages $17.
Source
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