No doubt 49-year-old Judith Negron was a model prisoner while serving eight years for participating in a fraudulent billing scheme that stole $205 million from Medicare.
But was her 35-year sentence in 2011 unduly harsh for a first-time offender, the argument advanced by her lawyers and family members? President Donald Trump commuted her sentence last week, one of 11 such pardons and commutations.
Here’s what she did at Florida-based American Therapeutic Corp. to earn that sentence. She paid kickbacks to assisted-living facilities and halfway houses to send their frail elderly for mental health services that were medically unnecessary or never delivered.
Witnesses at the trial testified that many of the patients she recruited suffered from dementia and were incapable of responding to treatment. They spent their days at ATC’s seven facilities staring at walls or watching TV. Many were incontinent and couldn’t feed themselves.
The company pleaded guilty to similar charges. Its top officer was sentenced to 50 years in prison. She claimed innocence based on ignorance of the billing scheme.
There were political overtones in Negron’s commutation. She’s Hispanic. Her well-connected family lives in Florida. It’s an election year.
But it also sent a signal to the career officials in the U.S. Justice Department and HHS’ Office of Inspector Genera that the nation’s self-proclaimed chief law enforcement officer isn’t all that interested in ferreting out fraud and abuse in government healthcare programs. It’s just the latest in a lengthening line of signals.
Government investigators often learn about possible fraud and abuse from whistleblowers bringing cases under the False Claims Act. But recent internal memos and a major Supreme Court decision have made it far more difficult for whistleblowers to pursue cases.
A Justice Department memo issued in January 2018 by civil fraud section chief Michael Granston claimed department attorneys have the power to ask courts to dismiss FCA complaints. Government lawyers often refuse to intervene in a case, which usually means they think it is without merit. But now they have the authority to try and deny whistleblowers their day in court.
According to a recent report from the white-collar defense firm Bass, Berry & Sims, the Justice Department has used that authority at least 45 times, including seeking the dismissal of 11 cases brought by the venture capital-backed National Health Care Analysis Group. It, like a handful of similar firms, analyzes claims databases to ferret out alleged wrongdoing.
Two years ago, then-Associate Attorney General Rachel Brand prohibited Justice Department attorneys from pursuing enforcement cases based on agency guidances, which do not have to go through a formal rulemaking process with its notice-and-comment period. Many fraud cases involve billing for off-label drug prescriptions not approved by CMS coverage decisions, which are guidances.
Last June, the Supreme Court upheld the logic behind Brand’s stance in Azar v. Allina Health Services. It postponed cuts in the disproportionate-share payment formula because HHS failed to give hospitals the right to comment on its proposed changes.
CMS Chief Legal Officer Kelly Cleary immediately issued a new memo upholding the policy of not enforcing guidance violations. “The Cleary Memo should have a significant impact on curtailing enforcement actions,” the Bass, Berry & Sims report concluded.
Enforcement activity against fraud and abuse is already in sharp decline. Justice Department criminal convictions fell 25% in the Trump administration’s first two years. Collections in fraud cases fell by $1 billion, or nearly a third.
On its own, commuting the sentence of a mother of two teenage boys is understandable. In light of recent actions by attorneys at both the Justice Department and HHS, it suggests healthcare’s white-collar criminals are breathing a lot easier these days.