Medical Clinic Owners and Patient Recruiters Charged in Miami for Role in $8 Million Health Care Fraud Scheme

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Thursday, September 26, 2013

Medical Clinic Owners and Patient Recruiters Charged in Miami for Role in $8 Million Health Care Fraud Scheme

Several patient recruiters, including two medical clinic owners, have been arrested in connection with a health care fraud scheme involving defunct home health care company Flores Home Health Care Inc. (Flores Home Health).
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
In an indictment returned on Sept. 24, 2013, and unsealed this afternoon, Isabel Medina, 49, and Lerida Labrada, 59, were charged with conspiracy to commit health care fraud, which carries a maximum penalty of 10 years in prison upon conviction.  Together with Mayra Flores, 49, and German Martinez, 36, Medina and Labrada also face charges for allegedly conspiring to defraud the United States and to receive health care kickbacks as well as receipt of kickbacks in connection with a federal health care program, which carry a maximum penalty of five years in prison upon conviction.
According to the indictment, the defendants worked as patient recruiters for the owners and operators of Flores Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.  Medina and Labrada were also the owners and operators of Miami medical clinics which allegedly provided fraudulent prescriptions to the owners and operators of Flores Home Health.
Flores Home Health was allegedly operated for the purpose of billing the Medicare program for, among other services, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.
From approximately October 2009 through approximately June 2012, Flores Home Health was paid approximately $8 million by Medicare for allegedly fraudulent claims for home health services.

South Jersey Doctor Sentenced To Two Years In Prison For Fraud Scheme Involving Home Health Care For Elderly Patients

FOR IMMEDIATE RELEASE

July 18, 2013

Doctor Made More Than Half a Million Dollars Illegally

TRENTON, N.J. – A doctor who was the owner and founder of Visiting Physicians of South Jersey (VPA) – a Hammonton, N.J., provider of home-based physician services for seniors – was sentenced today to 24 months in prison for charging lengthy visits to elderly patients that they did not receive, U.S. Attorney Paul J. Fishman announced.  

Lori Reaves, 52, of Waterford Works, N.J., previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging her with one count of health care fraud. Judge Wolfson imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

Reaves admitted lying in Medicare billings about the amount of face-to-face time she spent with patients, which led to her receiving at least $511,068 in criminal profits. Reaves was the highest billing home care provider among the more than 24,000 doctors in New Jersey from Jan. 1, 2008, through Oct. 14, 2011.

VPA provided home-based physician health care for elderly and homebound patients in New Jersey, offering services throughout South Jersey. As part of her responsibilities at VPA, Reaves was responsible for Medicare billings as a Medicare-approved provider. The claim submitted by the health care provider requires a physician to state a diagnosis and provide a procedure code – called a Current Procedural Technology (CPT) code – identifying services rendered. Medicare regulations require that each provider certify that the services rendered were medically necessary and were furnished by that provider. A warning at the bottom of the form specifically states that any false claims or statements in relation to the submission of a claim for reimbursement are prosecutable under federal or state law.

In most instances during the relevant time period, Reaves submitted forms that falsely claimed she had provided prolonged service visits to her patients in order to induce Medicare to make payments to her that were significantly higher than the payments she should have received. She routinely billed Medicare using codes that would have required her – under Medicare regulations and depending on the corresponding service – to spend between 60 and 150 minutes with a patient. Many of the claims Reaves submitted would have required her to spend a minimum of 2.5 hours of face-to-face time with her elderly clients, when she actually spent far less. As a result, Medicare reimbursed Reaves more than $511,068 for the fraudulent prolonged service visits Reaves claimed to have made.          

In addition to the prison term, Judge Wolfson sentenced Reaves to three years of supervised release. In addition to Reaves forfeiture of $511,068, Judge Wolfson ordered Reaves to pay restitution of $511,068 and pay a fine of $5,000.

U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom F. O’Donnell of the New York Regional Office, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorneys Deborah J. Gannett and R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark. 

13-294                                                     

Defense counsel: Rocco Cipparone Jr. Esq., Haddon Heights, N.J. 

http://www.justice.gov/usao/nj/Press/files/Reaves,%20Lori%20Sentencing%20News%20Release.html