Here are some of the more publicized allegations of home-care fraud:
1. ABC Home Health Services
(now called First American
Home Health Care)
CEO: Robert "Jack" MillsHHS' inspector general's office charged that the company and principal Mills filed more than $800,000 in fraudulent Medicare claims. Alleged bogus claims include charges for maid service, gourmet popcorn and country club fees. HHS is recommending the company be banned from Medicare and Medicaid for seven years. The sanction against ABC stems from just one of three ongoing fraud investigations against the company. ABC, which is formally appealing the sanction, denies any wrongdoing.
2. Caremark International
CEO: C.A. Lance Piccolo
1994 revenues: $430 million (home infusion only)
The company's home infusion business has been the subject of federal investigations since 1991. Last August Caremark and two of its employees were indicted by a federal grand jury in Minneapolis for allegedly paying $1.1 million in illegal kickbacks to David Brown, M.D. The company also has been named-although not charged-in similar Medicare fraud investigations in Columbus, Ohio, and Detroit. Executives deny any wrongdoing. Caremark sold its home infusion business to Coram in March for $309 million. It goes to trial in Minneapolis in July.
3. Chartwell Home Therapies
CEO: Don Kiepert
1994 revenues: $80 million
The Boston Globe last year reported that Chartwell was the subject of an ongoing FBI probe into whether the company paid physicians illegal kickbacks for patient referrals. New England Medical Center and Massachusetts General Hospital own 80% of the company. Charter garnered more than $80 million in revenues in 1994, twice the amount it generated in 1992. The company has denied any wrongdoing.
CEO: Jeannette Garrison
1994 revenues: $300 million
A federal grand jury in Savannah, Ga., charged Garrison, two other Healthmaster employees and the company in April with defrauding Medicare of $1.7 million. Garrison and others are charged with operating a money-laundering scheme in which hundreds of thousands of dollars in Medicare money were laundered through dummy companies. All involved have pleaded not guilty to charges. The trial is set for July.
5. Hospital Staffing Services
Fort Lauderdale, Fla.
CEO: Ron 1994 revenues: $79 million
The company's Medicare billing practices are under federal investigation by HHS' inspector general's office. Federal officials in 1992 suspended Medicare reimbursement to the company's South Florida Medicare offices. Executives deny any wrongdoing.
6. St. John's Home Health Agency
Miami Lakes, Fla.
CEO: Arnold Friedman
1994 revenues: $35 million
HHS audited the not-for-profit company last October after it billed Medicare $80 million over a two-year period. St. John's, the largest home-care agency in Florida, logged 1.1 million visits in 1993, more than five times its nearest competitor. The company filed for Chapter 11 bankruptcy last August. Company officials couldn't be reached for comment.
7. T2 Medical
CEOs: Joseph Allegra, M.D./
1993 revenues: $273 million
The company's home infusion business was under investigation by HHS' inspector general's office from 1991 until 1994. The probe centered on whether T2's home infusion business violated Medicare fraud statutes. The company denied any wrongdoing. T2, which merged with three other home infusion companies to become Coram Healthcare Corp. in February 1994, paid $500,000 to settle with the federal government in October 1994 without admitting any wrongdoing or liability. However, T2 founder Thomas Haire was banned from Medicare and Medicaid for five years in December 1994 after another of his companies, Radiation Care, settled fraud charges with the government.
8. U.S. Homecare
CEO: G. Robert O'Brien
1994 revenues: $79 million
The company's Medicare billing practices in South Florida and Pennsylvania between May and October 1993 were under investigation by HHS' inspector general's office last year. At issue was whether the company forged nurses' signatures and other documents. The probe resulted from a whistleblower suit filed by several former U.S. Homecare employees. O'Brien came on board in 1994, replacing chairman Edward Massey. In April the company agreed to pay the federal government $650,000 to settle allegations. The company denied any wrongdoing.
Sources: Company documents filed with the Securities and Exchange Commission; company reports; published news reports; court documents; and HHS' inspector general's office.