. . . while pockets of others bulge
"Update Oct. 19: The USDOJ announced: The owner and president of a Miami-area halfway house company pleaded guilty today for her role in a kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), and its related company, the American Sleep Institute (ASI), announced the Department of Justice, FBI and Department of Health and Human Services (HHS)."
If measured only by the number of states in which Medicaid or Medicare scandals are known by their headlines, and not even from states in which cutbacks have compromised these programs, people with a chronic illness are getting a raw deal. Those at the top of many companies, meanwhile, are making out like bandits (and sometimes are judged so by the courts).
Mismanagement of Medicaid or Medicare takes many forms. From kickbacks and bribes to doctoring the books and fabricating bills for services never delivered, billions of taxpayer dollars have been misspent. Sometimes it's due to malfeasance, questionable practices, include packing boards of directors with well-compensated family members, that triggers concerns about where our public monies go. Even when federal or state investigations conclude fraud has occurred, and the wrongdoers found guilty, only seldom do criminal penalties prevent them from again seeking, and receiving, publicly funded contracts.
Among the marquee schemes is Florida's American Therapeutic Corporation (ATC), called by the feds one of the "most brazen fraud conspiracies in recent memory." Run by a Miami couple, for eight years ATC conducted a massive $205 million Medicare fraud scheme involving mental health services that the company never delivered. Marianella Valera and Lawrence Duran recently received harsh sentences from U.S. District Judge James Lawrence King in the Southern District of Florida for bribery, paying and receiving kickbacks, money laundering, and defrauding the government by falsely billing Medicare for services to thousands of patients.
Federal officials charged more than 30 other ATC employees in this scheme, including a psychiatrist, patient recruiters, and nurses. Also involved were patient brokers and owners of halfway houses and assisted living facilities. Many of the clients billed for group therapy and ATC's partial hospitalization therapy services were elderly persons with dementia and Alzheimer's disease; others were brain-damaged, or substance abusers seeking treatment, according to a U.S. Department of Justice memorandum. To maximize profits, ATC and partners would cycle patients through their system 10 or more times.
It gets worse. Duran & Company created the American Sleep Institute (ASI), where, according to the DOJ, "they would perform diagnostic sleep studies on patients, 76% of whom also attended ATC. Just like at ATC, the defendants and their co-conspirators recruited patients to ASI through the payment of kickbacks for people who had no need for sleep studies."
The Miami Herald reported that one reason Judge King sentenced Duran to 50 years in prison, "likely the longest prison term ever imposed on someone convicted of Medicare fraud," was because of Duran's role as founder and a board member of the National Association for Behavioral Health, a Washington-based group that lobbied vigorously for federal dollars to support the services offered by ATC and other community mental health centers.
Duran's attorney informed him in 2007 that a former ATC nurse filed a civil whistle-blower against the firm with the Justice Department. But, according to the Herald, "rather than shut down his business, Duran continued to bilk Medicare" for another year.
Although the scale of ATC's crime is large, it is by no means the only example of corporate crime among mental health care providers and others providing services to those with chronic conditions.
In Baltimore, for example, a family-owned, non-profit mental health and addictions treatment organization, which advertises itself as "JCAHO accredited outpatient facility," received $65 million in mostly Medicaid funds and paid family members sky-high salaries. Meanwhile staff checks bounced with stunning regularity, According to The Baltimore Sun, Baltimore Behavioral Health violated Maryland's anti-nepotism law, and also employed a psychiatrist previously convicted of Medicaid fraud. The U.S. Department of Labor is now investigating BBH for shortfalls in employees' retirement funds.
Then there's Maxim Healthcare Services, a privately-held Maryland company promising (on its homepage) "adherence to ethical business practices, all applicable clinical, regulatory, and legal standards" while delivering home health services. Maxim defrauded the federal government of $61 million in false claims for undelivered services. The firm recently agreed to pay $130 million in civil penalties plus $20 million in criminal penalties as part of a settlement with the U.S. Department of Justice. Eight former Maxim employees--including three senior managers--pleaded guilty to various fraud charges.
How long would this have been undetected without whistleblower Richard West's eight-year crusade to get officials to pay attention? Assistant US Attorney Tony West said, "Patients were used as pawns for corporate greed that puts cash over care and wastes precious taxpayer dollars." Over six years, the company collected $2 billion in government reimbursement for work in 43 states.
A settlement of $150 million seems trivial when, as Meredith Cohn writes in The Baltimore Sun, the company can still do business with the federal government.
Allegations of embezzlement of $1 million of Medicaid-funded dollars led the Attorney General of Kansas to investigate Kansas Health Solutions, a non-profit providing services to people with a mental illness throughout the state. The former chief financial officer and executive director left the company, and Kansas is now working with the nonprofit on a new contract requiring significantly more rigorous financial oversight.
For people with disabilities and chronic illnesses, the combined effect of each of these situations is longer waits, fewer services, more travel, and most importantly, compromised health and well-being. Meanwhile, opportunists, incompetents, and criminals have lined their pockets with the resources intended to lift people from want, not drive them deeper into it.