DOJ Recoups $2.6 Billion from Home Health Fraud, Other Schemes in 2019

The 2019 fiscal year concluded with the Department of Justice (DOJ) bringing in $2.6 billion in recoveries involving health care fraud and false claims.

Home health-related fraud was a large part of these efforts. 

This marks the 10th consecutive year that the department’s civil health care fraud settlements and judgments have exceeded $2 billion. The recovery amount only includes federal losses.

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“The significant number of settlements and judgments obtained over the past year demonstrate the high priority this administration places on deterring fraud against the government and ensuring that citizens’ tax dollars are well spent,” Jody Hunt, the assistant attorney general, said in a DOJ press release.

The DOJ credits “whistleblowers who report fraud” for part of the department’s success in its False Claims Act enforcement efforts.

Encompass Health Corporation (NYSE: EHC) was the most notable company associated with home health care involved in a fraud settlement last year. Encompass Health is one of the nation’s largest providers of integrated health care services, offering both facility-based and home-based patient care in 37 states and Puerto Rico through its network of in-patient rehabilitation hospitals (IRFs), home health agencies and hospice agencies.

In June, Encompass agreed to pay $48 million to resolve false claims allegations. The settlement, however, did not involve the company’s home health operations.

Allegedly, beginning in 2007, some of the Birmingham, Alabama-based company’s IRF employees incorrectly diagnosed patients with “disuse myopathy” without any clinical evidence for the diagnosis.

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Additionally, Encompass allegedly admitted patients who were not eligible for admission to an IRF.

The company denied any wrongdoing in its settlement.

“The evidence establishes that Encompass Health did nothing wrong,” Mark Tarr, president and CEO of Encompass, said in a statement. “But to stop this interminable investigation and avoid further expense, we decided it is in the best interests of Encompass Health and its shareholders to settle with DOJ and end the related litigation.”

Another standout fraud case came from Amity Home Health Care, the Bay Area’s largest home health care provider.

In September, Amity Home Health Care was charged by federal prosecutors with paying doctors in a Medicare kickback scheme involving $115 million.

Amity’s employees were accused of bribing individuals associated with hospitals, skilled nursing facilities (SNFs) and doctors’ offices in the form of payroll, reimbursements, donations and gifts, according to DOJ.

Last year also saw the conclusion of one part of the largest Medicare fraud scheme in history.

In December, husband and wife Rodolfo Pichardo and Marta Pichardo were each sentenced to several years in prison for the couple’s six fraudulent home health agencies, three fraudulent therapy staffing companies and two fraudulent pharmacies located throughout Florida’s Miami-Dade County.

Overall, the Pichardos and their co-conspirators submitted more than $38 million in false and fraudulent claims, according to the DOJ. Medicare paid out more than $33 million of those claims.

Marta Pichardo was sentenced to eight years in prison for her role in the scheme, and Rodolfo Pichardo was sentenced to over 15 years in prison for health care fraud and wire fraud.

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