No Witness Needed for Conviction in $9.5 Million Hospice Fraud

The federal government upheld a conviction for one hospice nursing staffer who was part of a $9.5 million Medicare fraud scheme that involved overbilling for hospice services.

Seven defendants were convicted earlier this year in the case against Passages Hospice, a now-closed Illinois hospice provider, for a scheme that included falsifying patient records to bilk Medicare out of expensive care that wasn’t provided or medically necessary.

The case comes after a recent report found that hospices inappropriately overbilled Medicare by $268 million in 2012—about one-third of all billing—for services that could have been designated for home care, which is a significantly lower-cost setting.

Angela Armenta, who was the director for certified nursing assistants for the hospice provider, was the seventh person convicted for taking part in the health care fraud. The most recent response from the U.S. government stems from Armenta’s bid in May for a new trial after she claimed that there was not enough evidence to convict her, as no witness identified her in court.

“The evidence was more than sufficient to support the jury’s verdicts on the counts of conviction, especially when viewed in the light most favorable to the government…” Northern District of Illinois court documents read.

Armenta, 35, was charged in an indictment with four counts of health care fraud related to Passages’ improper billing of hospice services at an “elevated level of care,” according to the government’s response. Between 2009 and 2012 she was paid more than $300,000 in bonuses “based on the number of patients who were placed on the higher level of services in the region Armenta and others supervised,” according to the Department of Justice (DOJ). Witnesses during Armenta’s trial testified that she told nurses to disregard proper training for general inpatient services—a more expensive level of treatment.

She was convicted on three counts of health care fraud—each punishable by up to 10 years in prison—in early March 2016.

The former co-owner of Passages, Seth Gillman, pleaded guilty for his part in the fraud scheme in February. Carmen Velez, Passages’ former director of clinical services, also pleaded guilty, and testified she worked with Armenta in altering and supplementing patient files requested by the Medicare auditor, court records show.

In addition to Passages Hospice, other defendants convicted in the case include: Gwen Hilsabeck, former administrator; Julie Parker, former compliance officer; and Leroy Moore, former head of marketing.

Late last month, the whistleblower of the case, Charlene Sligting, filed a lawsuit against a lawyer who provided her with “bad advice” in the case that she says cost her the reward she is due for alerting the federal government to the fraud, according to The Cook County Record. Sligting reportedly worked for Passages Hospice and approached attorney Mark Baiocchi in 2010 for advice and counsel on the information she had on alleged false claims with Medicare. Under guidance from Baiocchi, Sligting resigned after Baiocchi agreed to represent her in an action filed against Passages, according to The Cook County Record.

Baiocchi persuaded her “there was no merit in the claim against Passages,” though the DOJ brought charges against Passages’ owner and other employees in 2014, Sligting alleges. In January 2016, she discovered Baiocchi did not name her as a whistleblower in the case, thereby breaching his fiduciary duty to her by excluding her from presenting “evidence that she was the original source of information” in the case, she claims.

Under federal law, whistleblowers are entitled to reward compensation for collections the government makes in Federal False Claims Act cases.

Written by Amy Baxter