Another Medicare fraud lawsuit has come to an end with the owner of a now-closed group of mental health centers pleading guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.
Health Care Solutions Network (HCSN) ran three community mental health centers in the Miami-Dade County area of Florida, in addition to operating another mental health center in Hendersonville, North Carolina. HCSN’s mission was to provide what is called a “partial hospitalization program” (PHP) to patients who suffered with various kinds of mental illness. Using PHP services, patients are able to remain living in their own homes while commuting to their treatment center up to seven days a week. PHP services generally focus on the overall treatment needs of each patient, while also attempting to reduce the incidence of hospital admissions.
Armando Gonzalez, of Hendersonville, NC, owned the HCSN operation and was president of the Miami-based Psychiatric Consulting Network Incorporated. According to court documents, Gonzalez used the Psychiatric Consulting Network solely as a dummy corporation for laundering fraudulent proceeds he obtained through HCSN. From 2004 to 2011, HCSN billed both the Medicare and Florida Medicaid programs around $63 million for mental health services that were allegedly provided to patients. In all, HCSN’s fraudulent billing netted Gonzalez over $28 million in payments from the Medicare and Florida Medicaid healthcare programs.
Details of the Medicare Fraud Scheme
According to court documents, HCSN fraudulently billed Medicare and Florida Medicaid for PHP services that were not only medically unnecessary, but in multiple instances, never even provided. The network gained their patients in the Miami area by providing illegal kickbacks to the owners and operators of local assisted living facilities. Many assisted living facilities refer patients to PHP treatment providers once they are eligible for such services. On a regular basis, HCSN admitted Miami patients to the clinic who were not eligible for PHP treatment services due to certain medical conditions such as mental retardation, dementia and Alzheimer’s disease. These patients are specifically ineligible for PHP treatment under Medicare or Florida Medicaid programs, as at-home living and a daily commute to mental health treatment centers are not effective treatment options.
Included within the plea agreement, Gonzalez admitted that he also directed his HCSN employees to falsify patient medical records, personal health information and census data. This was done in an effort to support the Medicare fraud scheme, making each service provided by HCSN appear medically necessary to both government sponsored healthcare programs.
Details of the North Carolina Medicare Fraud Scheme
While Gonzalez directed his Florida employees to commit Medicare fraud by falsifying official medical records, he went a step further by directing North Carolina employees to submit fraudulent PHP claims for Medicare patients who were never present at the mental health clinic. Additionally, North Carolina employees submitted multiple PHP service claims on days when the facility was closed due to inclement weather.
Just like the Florida Medicare fraud operation, Gonzalez instructed North Carolina staff to admit patients who were ineligible for PHP services due to certain medical conditions. In addition, HCSN Hendersonville attempted to increase their patient load by hiring a local marketing company to recruit more business from surrounding counties. The “marketing company” located a host of additional patients for HCSN that were not eligible for PHP services under Medicare, then transported these patients to the facility on a daily basis. Gonzalez provided illegal kickbacks to his new fraudulent patient base, providing them with cigarettes each day they showed up at the facility.
HCSN Hendersonville employees and therapists also falsified patient progress notes for multiple patients, making it look as if they had provided patients with intensive and therapeutic mental health services. In actuality, HCSN Hendersonville patients were lumped into groups of 20 or more and provided no mental health services at all. Several therapists created false therapy session notes, claiming group meetings had extraordinary results and high therapeutic value for patients.
Terms of the Plea Agreement
In front of U.S. District Judge Cecilia M. Altonaga, Gonzalez agreed to plead guilty to the charges of conspiracy to commit health care fraud and conspiracy to commit money laundering. He was sentenced to serve 168 months, or 14 years, in prison. In addition to the prison term, Gonzalez must serve three years of supervised probation and was ordered to pay $28,092,283 in restitution fees. In an attempt to satisfy the restitution, the government seized many of Gonzalez’ assets, including $987,000 located in a savings account, several cars and a mansion located in Hendersonville.