Despite almost daily Medicare fraud arrests, greedy crooks still haven’t figured it out. They are going to get caught. Henry Smilie of Lake Zurich, Illinois is the latest person to get a rude wake up call by gun toting federal agents. Smilie was arraigned last week for federal Medicare fraud. At this point he is charged with one count, although it is common that prosecutors add charges once someone is in custody.
According to court records and information released by the Department of Justice, Smilie was the CEO of a Chicago company called Home Physician Services LLC. In the eloquent words of Chicago’s U.S. Attorney, Smilie was arrested for the “Non-Existent Treatment Of The Elderly.” In other words, Smilie was getting money from taxpayers but not providing any services.
According to court records, Smilie operated Home Physician Services as a specialty healthcare provider that provided physicians for patients who were homebound. It appears that in just over 2 years, Smilie was paid $1.2 million in taxpayer dollars for these “services.”
Smilie’s grand scheme of billing for phony and non-existent services began to unravel when a then employee confronted him and said his activities were illegal. Smilie allegedly began to laugh and admitted the entire scheme was illegal.
A doctor who worked with Smilie would later tell investigators that he rarely performed home health assessments yet his name appeared on paperwork from Home Physician Services and was used to bill Medicare.
Home health visits are legal but only if there is a medical need and that need is documented with proper paperwork. For Home Physician Services, that paperwork meant an OASIS form. Short for “Outcome and Assessment Information Set,” the OASIS form identifies if the patient is confined to the home, the severity of symptoms, and the reimbursement rate to the home health care provider.
Assuming there is a documented medical need, home health agencies and physicians performing house calls can be reimbursed for services actually performed. From the affidavit of the arresting special agent, it appears there was often no medical necessity or services performed.
One patient interviewed by Health and Human Services special agents claimed she was approached by a “patient recruiter” at church and “convinced” to obtain services. After more thought, she decided against the idea and cancelled Home Physician’s services. That didn’t stop the company for billing Medicare the next 5 months for “care plan oversight” services.
To make sure their Medicare fraud case was solid, special agents decided to employ a senior citizen to work undercover. Agents used an able-bodied 71-year-old man who could walk and move without difficulty. The ability to move is critical in making necessity determinations for home care. If you can walk, you can leave the home and see a doctor.
The undercover senior was instructed not to alter his appearance, behavior or mannerisms. He was also instructed to answer all medical necessity screening questions truthfully. The undercover senior citizen clearly didn’t need home health care services but that didn’t stop Home Physician Services from finding medical necessity and billing taxpayers.
The undercover first had numerous discussions with a patient recruiter. Although not illegal, patient recruiters are usually a red flag for Medicare fraud schemes. The undercover met the recruiter at a restaurant making it obvious that he was not home bound.
In one discussion, the recruiter suggested he where pajamas and use a cane when answering the door for the home assessment visit. Agents told the undercover, to act normally and walk to the door unassisted.
On the day of the visit, a physician employed by Home Physician Services came to the undercover’s home. The undercover walked to the door and allowed the doctor to enter. During the medical “assessment”, the physician asked if the undercover had any medical problems to which he replied, “sleep apnea.”
Despite the undercover’s healthy condition and ability to walk, repeated home care visits continued.
The scheme apparently ended when one of Smilie’s employees confronted him and claimed the company’s actions were illegal. After Smilie admitted the entire home care physician oversight program was illegal, the employee quit. Later that employee would become a whistleblower and call the Medicare fraud hotline.
The employee – turned -whistleblower told investigators he didn’t call earlier because he needed the income to support his family and was worried for his safety. Smilie apparently claimed he once worked for the Secret Service causing the employee to be fearful.
While calling the Medicare fraud tip line is an effective way of reporting fraud, callers aren’t eligible for large whistleblower awards paid out by the Justice Department. The only way to receive an award is to file a sealed lawsuit in federal court under the False Claims Act, a Civil War era statute that allows whistleblowers to receive up to 30% of whatever is recovered by the government. (Last year the government paid out $635 million in whistleblower awards, many of them in Medicare fraud cases.)
Now that Smilie has been arrested, other former employees appear to be cooperating. One worker told investigators that Smilie used a stamp of a physician’s signature on Medicare documents. Apparently the stamp signatures were done without the doctor’s consent.
Smilie was arrested last week and is charged with a single count of Medicare fraud. If convicted, he faces up to years in prison. We remind readers that at this point in the case, the above allegations are just that, allegations. Smilie is presumed innocent until proven guilty.
In announcing the arrests, Chicago’s U.S. Attorney Zachary Fardon said, “Home health care fraud carries a very high price tag in our communities. Our partners at the federal, state and local level are committed to rooting out and combatting fraud, waste and abuse in the home health care system.”
The takeaways from this case are simple. First, sooner or later those who repeatedly commit Medicare fraud will be caught.
Second, if you wish to earn a large cash award, you need to find a lawyer and file a False Claims Act whistleblower complaint in federal court. (Many states have similar laws for Medicaid fraud.) Calling the Medicare fraud hotline isn’t enough.
Finally, like the old adage “where there is smoke there is probably fire,” we remind everyone that where there are patient recruiters there is probably Medicare fraud.
Our team of whistleblower lawyers has helped our clients recover over $100 million in award monies. If you have inside (original source) information about Medicare fraud or other fraud involving taxpayer funds or government programs, give us a call. All inquiries are kept completely confidential. Even if you never become a whistleblower, call us to better understand your options and learn if your information is valuable.
If you are a patient recruiter and afraid to come forward for fear that you may have participated in a crime, call us. We can speak to prosecutors and gauge their interest in your information. (Prosecutors seldom charge recruiters, billing professionals and other healthcare workers who voluntarily step forward and report misconduct.)
MahanyLaw – America’s Medicare Fraud and Whistleblower Lawyers