Fraud Watch: Bay Area Doctors, Home Health Employees Indicted in Kickback Scheme

A federal grand jury in San Jose indicted three doctors and three employees of Milpitas Home Health Agency for conspiracy to pay and receive kickbacks for referrals.

U.S. Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett announced the medical professionals were charged at the end of August. According to the indictment, three doctors received payments in exchange for referring Medicare patients to Medics Choice Home Health, a Milpitas home health care agency.

Prosecutors say Medics Choice Home Health received $4.2 million from Medicare for the care of patients by the doctors, according to an Easy Bay Times report.


The alleged kickbacks reportedly ranged from $250 to $700 for each Medicare beneficiary referred to home health services, according to court documents obtained by East Bay Times. In some cases, kickbacks were paid as a flat monthly rate of about $2,000 to $3,500.

An indictment alleges that crimes have been committed and all defendant are presumed innocent until proven guilty.

If convicted, the defendants face a maximum sentence of five years imprisonment and a fine of $250,000 for the conspiracy to pay and receive remunerations for the referral of Medicare beneficiaries.


Assistant U.S. Attorney Patrick R. Delahunty is prosecuting the case.

Prosecutors also charged a Milpitas Home Health Agency employee with one count of obstruction of justice, alleging she obstructed an FBI investigation by threatening former employees who were voluntarily interviewed by agents, East Bay Times reported.

From coast to coast

There are no reliable estimates of fraud in Medicare, but alleged improper payments for Medicare in 2017 reached nearly $52 billion, according to a recent report from the Government Accountability Office (GAO), the watchdog arm of Congress.

In its report, GAO made three recommendations to Centers for Medicare and Medicaid Services: require and provide fraud-awareness training to employees, conduct fraud risk assessments and create an anti-fraud strategy for Medicare, including an approach for evaluation.

The California kickback case is not the only example of fraud within the home health industry within the past few months. In Boston, the owner of Harmony Home Health Care was sentenced to two to three years in state prison for stealing millions of dollars from the Massachusetts Medicaid Program, known as MassHealth.

“The defendant stole millions from MassHealth and took advantage of patients and taxpayers,” Attorney General Maura Healey said in a press release after the sentencing announcement in early August.

Elena Kurbatzky, 45, was convicted after a jury trail in Suffolk Superior Court on charges of Medicaid false claims, larceny over $250 by false pretenses and Medicaid member eligibility fraud.

“We will continue to investigate and take action against those who commit fraud against MassHealth and take health care resources away from people who need them,” Healey said.

Written by Kaitlyn Mattson