Despite the criminal activities of Healthmaster Home Health Care's former executives, the selling price for the regional home-care company doubled in the span of just a month.
The addition of Healthmaster, which provides care for more than 10,000 patients, allows the purchaser to enter the local home-care arena in a big way.
"Healthmaster is 40% of all home healthcare for Georgia," said Bob Kimsey, president of Central Georgia Health Ventures, the holding company for Healthmaster, which has been renamed CareSouth.
CareSouth's network includes 2,700 employees and reaches into four other Southern states. With those resources already in place, the medical center will manage the home-care operations of several other local facilities, according to Kimsey.
Healthmaster's founder, Jeanette Garrison, and two former employees were recently sentenced in U.S. District Court in Augusta. The three were indicted in March on 133 counts of Medicaid and Medicare fraud. Examples of the crimes cited by prosecutors were fraudulent funneling of Medicare funds into political contributions to Democratic candidates and hiring a prostitute to entertain federal auditors.
Garrison pleaded guilty July 26 to 10 counts of the indictment. She was sentenced to 33 months in prison and fined $2.5 million. The possibility remains that Garrison will net millions from Healthmaster's high purchase price, even after reimbursing about $16.5 million in federal and state Medicare funds, paying about $18 million in taxes on the sale and settling bankruptcy proceedings.
Garrison also testified against two of her former employees, Dennis J. Kelly and David W. Suba, during the two-day trial that resulted in guilty verdicts for both of them on nearly all counts.
Kelly, the company's former vice president and chief financial officer, was sentenced to more than 12 years in prison, and must pay fines and restitution totaling more than $785,000.
Suba, Healthmaster's former insurance risk manager, was sentenced to eight years in prison and must pay restitution of more than $710,000. The risk services company he headed must also serve probation and pay fines and restitution of more than $960,000.