Florida-Based American Sleep Medicine to Pay $15.3 Million for Improperly Billing Medicare and Other Federal Health Care Programs

WASHINGTON—Florida-based American Sleep Medicine LLC has agreed to pay $15,301,341 to resolve allegations that it billed Medicare, TRICARE—the health care program for Uniformed Service members, retirees, and their families worldwide—and the Railroad Retirement Medicare Program for sleep diagnostic services that were not eligible for payment, the Justice Department announced today.
American Sleep, headquartered in Jacksonville, Florida, owns and operates 19 diagnostic sleep testing centers throughout the United States, including in Alabama, California, Delaware, Florida, Illinois, Indiana, Kansas, Kentucky, Maryland, Missouri, New Jersey, Tennessee, Texas, and Virginia. The company’s primary business is to provide testing for patients suffering from sleep disorders such as obstructive sleep apnea. The test results are used by doctors to determine the most appropriate course of treatment for patients. The most common tool used to diagnose sleep disorders, particularly sleep apnea, is a procedure called polysomnographic diagnostic sleep testing. Under federal program requirements for the reimbursement of claims submitted for sleep disorder testing, initial sleep studies must be conducted by technicians who are licensed or certified by a state or national credentialing body as sleep test technicians.
The United States contend that Medicare and TRICARE claims submitted by American Sleep during this period were false because the diagnostic testing services were performed by technicians who lacked the required credentials or certifications, when it knew this violated the law. American Sleep submitted false claims to Medicare and TRICARE between January 1, 2004 and December 31, 2011, according to the United States’ allegations.
“Medicare patients and military families deserve to be treated by appropriately credentialed professionals when seeking medical care,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “When companies providing those services seek to skirt the rules, there will be a steep price to pay.”
“Pursuing health care fraud is a priority of my office and the Department of Justice. We will continue to work with the Department of Health and Human Services and the public to ensure that fraudulent claims are investigated and those responsible are required to pay,” stated David J. Hale, U.S. Attorney for the Western District of Kentucky. “Medical providers who overbill Medicare defraud the taxpayers and drive up the cost of health care for us all. Recovering taxpayer dollars lost to fraud helps keep strong those critical public health care programs so many people depend on.”
“Patients seeking care from licensed professionals deserve to receive exactly what was represented, and the taxpayer-funded Medicare program expects no less,” said Derrick Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General Region IV, which includes Kentucky. “The company has agreed to federal monitoring and reporting requirements designed to avoid such problems in the future.”
The allegations covered by today’s settlement were raised in a lawsuit filed against American Sleep under the qui tam, or whistleblower, provisions of the False Claims Act. United States ex rel. Daniel Purnell v. American Sleep Medicine LLC, no. 3:07-cv-12-S (Western District of Kentucky). The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. Relator Daniel Purnell will receive $2,601,228 as part of today’s settlement.
In addition to the $15.3 million payment, American Sleep entered into a five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The agreement requires enhanced accountability and wide-ranging monitoring activities conducted by both internal and independent external reviewers.
Principal Deputy Assistant Attorney General Delery thanked the Office of the Inspector General for the Department of Health and Human Services, the Medicare Railroad Retirement Program, the Defense Criminal Investigative Service, the FBI, the U.S. Attorney’s Office for the Western District of Kentucky, and the Commercial Litigation Branch for the collaboration that resulted in today’s settlement. The claims settled by this agreement are allegations only, and there has been no determination of liability.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.9 billion.

Physical Therapy Assistant Pleads Guilty in Connection with Detroit Medicare Fraud Scheme

WASHINGTON—Detroit-area resident Ankit Patel pleaded guilty today for his role in a $13.8 million home health care fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Robert D. Foley, III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh, III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Chicago Regional Office.
Patel, 28, of Westland, Michigan, pleaded guilty today to one count of conspiracy to commit health care fraud before U.S. District Judge Gerald E. Rosen of the Eastern District of Michigan.
According to court documents, Patel was paid beginning in June 2009 to falsify medical documentation for Physicians Choice Home Health Care LLC, a home health agency owned by his alleged co-conspirators. Patel, a physical therapy assistant, pleaded guilty to creating evaluations, therapy revisit notes, and other medical documentation memorializing purported physical therapy for patients he did not see or treat. According to court documents, an alleged co-conspirator instructed Patel on how to falsify medical documentation. Patel also signed therapy revisit notes as a physical therapy assistant for patients he did not see or treat. Patel admitted to knowing that the documents he falsified and the documents he signed would be used to support false claims to Medicare for home health services.
According to Patel’s plea agreement, he was subsequently paid to create and sign falsified medical documentation for First Care Home Health Care LLC, Quantum Home Care Inc., and Moonlite Home Care Inc., which were Detroit-area home health care companies also owned by alleged co-conspirators that billed Medicare.
From approximately June 2009 through September 2011, Medicare paid approximately $1,324,015 to Physicians Choice and Quantum for fraudulent physical therapy claims based on falsified files and notes signed by Patel.
At sentencing, scheduled for March 25, 2013, Patel faces a maximum penalty of 10 years in prison and a $250,000 fine.
Ten of Patel’s co-defendants have pleaded guilty, and one has been sentenced. Three co-defendants are fugitives, and five co-defendants await trial.
This case is being prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. It was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.

Houston-Area Doctor Convicted in $17.3 Million Medicare Fraud Scheme Involving Fraudulent Claims for Home Health Care Services

WASHINGTON—A federal jury in Houston today convicted Ben Harris Echols, 63, of Houston, for conspiring to commit health care fraud by falsifying plans of care for Medicare beneficiaries, including patients whom he did not treat. After a four-day trial, the jury convicted Echols of one count of conspiracy to commit health care fraud and six counts of false statements relating to health care matters.
Today’s verdict was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of Inspector General, Office of Investigations; and the Texas Attorney General’s Medicaid Fraud Control Unit.
According to evidence presented at trial, Echols was a physician practicing in the Houston area. The evidence showed that Echols signed plans of care for Medicare beneficiaries so that fraudulent claims could be billed by Family Healthcare Group Inc. and Houston Compassionate Care. Echols would sign plans of care for Medicare beneficiaries who were not under his care and about whose conditions he had no knowledge. In many instances, the evidence showed, Echols would sign plans of care even though other doctors were listed as the attending physician on the documents.
Evidence presented at trial showed that Family Healthcare Group Inc. and Houston Compassionate Care fraudulently billed Medicare for home health services and were paid approximately $17.3 million by Medicare, including $5.5 million for beneficiaries for whom Echols signed a plan of care.
At trial, doctors in whose names claims were submitted to Medicare testified that they were treating the patients on plans of care signed by Echols, and that the patients did not need the care that had been billed to Medicare based on the plans. Two Medicare beneficiaries for whom Echols signed plans of care testified at trial that they had never seen Echols, that they had different primary care physicians, and they did not want or need home health care.
The conspiracy count carries a maximum potential penalty of 10 years in prison and a $250,000 fine; each of the false statements counts carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for March 14, 2013.
The case was tried by Trial Attorneys Alexander H. Berlin, Abigail B. Taylor and Senior Trial Attorney Joseph S. Beemsterboer, with assistance from Trial Attorneys Kyle Maurer and Alison Anderson of the Criminal Division’s Fraud Section.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov