MIAMI — Federal agents arrested four Miami-Dade health care operators Thursday in one of the nation’s biggest Medicare fraud cases, charging them with scheming to fleece $200 million from the taxpayer-funded program by billing for bogus mental health services.
Lawrence S. Duran, 48, of North Miami, and his company, American Therapeutic Corp., were charged along with other employees in a conspiracy indictment. The Miami-based company’s chief executive officer, Marianella Valera, 39, was also among the defendants named in the indictment.
Duran, Varela and two other employees — Judith Cruz Negron, 39, and Margarita Acevedo, 40 — were in federal custody Thursday morning.
The indictment was unsealed at the same time as a government whistle-blower lawsuit filed against American Therapeutic, the nation’s largest chain of community mental health centers licensed by Medicare, authorities said.
The indictment charges American Therapeutic and its senior employees with conspiring to bilk Medicare for group therapy sessions that were either unnecessary or not provided to patients, many suffering from Alzheimer’s disease. They were mostly supplied by assisted-living facilities that received kickbacks for the referrals.
Agents for the FBI and the Department of Health and Human Services raided one of American Therapeutic’s clinics at 1801 NE Second Ave., just after the arrests. They were carrying up boxes of records and computers out of the clinic to load them into a van.
To signal the importance of the case, senior Justice Department officials flew to Miami to announce the biggest Medicare Fraud Strike Force case in history.
“”We have rarely seen anything like the illegal conduct charged in this indictment, both in terms of the nature and size of the scheme,”” said Lanny A. Breuer, assistant attorney general of the criminal division.
The scope of the alleged Medicare fraud surpassed that of a vast network of Armenian gangsters and their associates charged last week with operating phantom health care clinics to try to cheat the federal program out of $163 million.
U.S. authorities touted that case as “”the largest Medicare fraud scheme ever perpetrated by a single criminal enterprise,”” with 73 people charged in New York, Los Angeles and other cities.
The Miami indictment signals the Justice Department’s latest assault against rampant Medicare fraud in South Florida, where agents for the FBI and Health and Human Services’ Office of Inspector General have targeted American Therapeutic and other mental health clinics suspected of submitting false claims for counseling elderly patients with dementia or Alzheimer’s disease.
The clinics are also suspected of withholding drugs from the patients, while they use their Medicare numbers to bill the government program for dubious therapy sessions that involve watching TV, socializing and eating meals.
Medical experts say the patients, who suffer severe loss of brain function, cannot possibly benefit from mental health counseling.
As the latest criminal case shows, American Therapeutic’s patients typically resided in assisted-living facilities spread throughout Miami-Dade and other communities. The facilities are suspected of supplying unwitting patients in exchange for payments from American Therapeutic, which provided transportation to and from the facilities.
Authorities say the magnitude of such fraud is eye-opening: More than 100 Florida mental health centers, mostly located in Miami-Dade, submitted $425 million in bills to the Medicare program last year. In turn, Medicare paid $171 million to the Florida clinics, with almost all of that money going to mental health operators in Miami-Dade, Broward and Palm Beach counties.
Indeed, reimbursements to the South Florida clinics alone accounted for 56 percent of Medicare’s entire payments to mental health centers nationwide last year, according to the agency’s records.
American Therapeutic, with seven mental health clinics in South Florida and Orlando, billed about $54 million to Medicare last year for group therapy sessions to treat purported depression, schizophrenia and other mental illnesses, according to government records. In turn, the company was paid about $22 million. The chain, with 250 employees, treats thousands of patients yearly.
It is not only among Medicare’s highest billers of mental health services in the country, but Duran also has been active in a Washington, D.C., lobbying group called The National Association for Behavioral Health.
A video of Duran’s visit in January to the congressional office of U.S. Rep. Ileana Ros-Lehtinen, R-Fla., was posted on You Tube, in which he talked about protecting mental health services under the health care reform legislation passed by Congress this year. Also, Duran and two other South Florida health care businessmen were pictured with the congresswoman in a photo posted on the NABH’s website.
During the past year, Medicare administrators and agency contractors have placed many suspect Miami-Dade mental health clinics, including most recently American Therapeutic, on what is known as “”pre-payment review.”” That means payments are frozen until Medicare can verify that doctors prescribed the services, the clinics provided the counseling sessions, and patients received and benefited from them.
Without confirmation, the clinics aren’t paid, which has led to some shutting down.
Although Medicare under the Obama administration has improved technology to weed out fraudulent claims, the government agency still loses billions of dollars yearly to fraud in the areas of mental health, physical therapy, home healthcare and medical equipment.
The reason: For decades, Medicare and its contractors have relied upon a largely antiquated policy of reimbursing health care claims quickly without verifying them. The brisk payments, typically made within 14 days, keep the healthcare system going but also fuel corruption.
Last month, President Barack Obama signed an anti-fraud law that will require the behemoth Medicare bureaucracy to act more like a credit card company in flagging suspicious claims that could save taxpayers billions of dollars a year in wasteful government healthcare spending.
The anti-fraud provision, tucked into the Small Business Lending Act, will force Medicare and its claims contractors to adopt new billing software with “”predictive modeling”” for the 10 worst states by next year.
Such analytical technology enables the credit card industry to detect questionable bills for, say, a flat-screen TV purchased outside a cardholder’s immediate area so that companies can notify the customer and stop payment if fraud is a factor.
