Ten individuals who own and operate assisted living facilities (ALFs) in the Miami metro area have been criminally charged with federal healthcare fraud. The Department of Justice says the men and women charged are guilty of receiving kickbacks from the owner of a pharmacy. The pharmacy owner was supplying prescription drugs and durable medical equipment to patients in the facilities.
This case is noteworthy because it involves the prosecution of the recipients of the bribes. Kickbacks and bribes in the healthcare field violate the Anti-Kickback Statute and constitute Medicare fraud if tax dollars are involved.
According to Miami’s U.S. Attorney, the following people were charged:
- Marlene Marrero, 60, of Miami
- Blanca Orozco, 69, of Miramar
- Norma Casanova, 67, of Miami Lakes
- Yeny De Erbiti, 51, of Miami
- Rene Vega, 57, of Miami
- Maribel Galvan, 43, of Miami Lakes
- Dianelys Perez, 34, of Miami Gardens
- Osniel Vera, 47, of Hialeah
- Alicia Almeida, 56, of Miami Lakes
- Jorge Rodriguez, 57, of Hialeah
According to the indictment, Maria Serrano ran a pharmacy in Hialeah, Florida called Florida Pharmacy, Inc. The defendants in this case were the operators of assisted living facilities (ALFs).
Although Medicare and Medicaid doesn’t generally pay for a resident’s stay in an ALF, it does reimburse for medications just as if the patient were living at home. Many of these facilities assist residents with certain daily needs such as medication monitoring.
To receive Medicaid and Medicare monies, the facilities had to agree not to accept kickbacks. Prosecutors say they all steered patients to Serrano and in return, accepted kickbacks from her.
Prosecutors say it wasn’t a one time event. The kickbacks became so institutionalized that several facilities threatened to take their pharmacy business elsewhere if Serrano was late in paying kickbacks. Ultimately agents were able to record some of the conversations.
When Serrano sold her pharmacy, many of the nursing home owners continued the same arrangement with the new owner, Zugeilys Castillo. (He was later convicted as well and was sentenced to 40 months in prison.)
In addition to the kickbacks, the ALFs were sending back any leftover drugs so that Serrano could resell them. Even though drugs were already paid for with tax dollars, Serrano would simply sell them again.
Serrano received a 30 month sentence but later had that cut to 18 months after she cooperated. Most of the recipients of the bribes, the assisted living facility owners, received one year sentences. All were required to pay their share of the $1.2million stolen from taxpayers.
Kickbacks and Medicare Fraud
Congress long ago outlawed kickbacks and bribes in healthcare matters. Medical decisions should be based on medical necessity and the best interests of the patient. Never should decisions be based on who pays the biggest incentive.
Solicitation, payment or receipt of kickbacks are all illegal. This case involved the prosecution of those receiving the payments. According to the indictments, the 10 ALF owners received bribes from a local pharmacy named the Florida Pharmacy. The pharmacy allegedly paid the facility owners so that they could provide drugs and medical equipment to patients residing in the facility. Often in these cases there is no need for the equipment or lower priced options are available.
In announcing the indictments, Miami’s U.S. Attorney Wifredo Ferrer said, “The U.S. Attorney’s Office and our law enforcement partners remain committed to prosecuting members of the South Florida assisted living community who fraudulently use the Medicare and Medicaid benefits of their residents to obtain illegal bribes and kickbacks.”
Because the pharmacy and ALFs also receive state Medicaid money, the Florida Attorney General is also assisting in the prosecution. Attorney General Pam Bondi told reporters, “We will not allow anyone to take advantage of seniors to defraud the Medicaid program. Thanks to the joint investigative efforts of my Medicaid Fraud Control Unit and our federal partners, this scheme has been stopped and those responsible will be held accountable.”
In addition to the criminal charges, prosecutors have also initiated forfeiture proceedings. That means in addition to possible prison time, the defendants could also lose their assisted living facilities.
The Justice Department is ratcheting up the heat on providers that pay bribes. Most prosecutions have been directed at the payor of the illegal bribes. This case shows a major shift by now prosecuting the people that accepted the bribes. The forfeiture allegations mean that these folks could even lose their businesses.
Medicare Fraud and Whistleblower Awards
Illegal bribes and kickbacks are just one of many types of Medicaid and Medicare fraud. (For a good description of other variations of these frauds, visit the Coalition of State Healthcare Services home page.) Insiders with information about these schemes are eligible to collect an award of up to 30% of whatever the government collects from the wrongdoers. Whistleblower awards in the hundreds of thousands of dollars and even millions of dollars are not uncommon. (Our whistleblower clients have received over $100 million in the last five years.)
For information about how to become a whistleblower and claim your own award, give us a call. All inquiries are confidential and there is never any obligation. For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731.
Whether you choose us or some other lawyer, know that if you make your report to the government’s Medicare fraud hotline number, your award is generally capped at $1,000. We speak to people weekly that reported misconduct on a hotline number and then later read about a multimillion dollar settlement. Unless you file a sealed lawsuit in federal court (state or federal court for state Medicaid fraud), you are not eligible to receive a large percentage award. These awards are reserved for those who report under the False Claims Act and file a qui tam lawsuit.
Don’t be heartbroken or angry and learn you are only eligible to receive $1000!
MahanyLaw – America’s Whistleblower Lawyers