Undercover Operation Nabs Home Health CEO Accused of Fraud

A federal undercover operation has led to the arrest of a Chicago-based home health care company’s CEO accused of fraudulently billing Medicare for up to $1.2 million.

Henry Smilie, CEO of Home Physician Services LLC, was charged with Medicare fraud in a federal complaint unsealed following his arrest Thursday, according to the U.S. Attorney’s Office of the Northern District of Illinois. A federal affidavit filed with the complaint claims the company received $1.2 million in payments from Medicare between February 2012 and July 2014 for in-home treatment, when the patients in fact were not confined to their homes and therefore not eligible to receive such services.

As part of the investigation, an undercover confidential source posed as a 71-year-old Medicare recipient. Home Physician Services certified him as homebound, despite him not being confined to his home, according to the affidavit. Visits from doctors were secretly recorded and unveiled that the source frequently walked outside his home, visited friends and grandchildren and expressed his love for gardening, but the company continued to declare him homebound in billing submissions to Medicare in order to receive maximum payouts.

Smilie, 54, of Lake Zurich, reported to Medicare that his contracted physicians had conducted services for patients that weren’t actually administered, according to the affidavit. The document also said a former employee told federal agents that Smilie encouraged him to falsify records to meet the criteria to receive Medicare payments, and that Smilie used a rubber stamp of physicians’ signatures to create orders for treatment.

Home Physician Services hires doctors to perform house calls and oversee treatment plans for elderly and homebound patients, with bill-collecting rights granted to and payments distributed by the company. Home Physician Services has offices in Chicago and the city’s northern suburb of Schaumburg.

Representatives with Home Physician Services could not be reached Monday for comment to Home Health Care News regarding the allegations.

If convicted, Smilie faces up to 10 years in prison, mandatory restitution, and a maximum fine of $250,000.

Written by Kourtney Liepelt