The federal government has made a concerted effort to weed out fraud committed by companies and individuals. A key tool in doing so has been the False Claims Act, which allows for the U.S. government, or individuals on behalf of and usually in conjunction with the U.S. government, to bring suit against the alleged fraudsters to recover this money as well as penalties for the illegal activity. A particular area where the government prosecutes and recovers for fraud is in the healthcare sector, specifically as to Medicare or Medicaid fraud in nursing homes. Given that states administer these programs with federal funds and their own funds, states also have a serious stake in the matter. Sometimes states themselves will bring prosecutions to recover for money stolen as well. States have fraud units, and sometimes even units specific to Medicare and Medicaid fraud. For example, earlier this month, two women in Gainesville, Florida pleaded no contest to grand theft charges based on charges of Medicaid fraud. These charges were brought by the Florida Attorney General, as the investigation originated in the Attorney General’s Medicaid Fraud Control Unit.
Details of the Case
The two women were the CEO and Assistant CEO at an entity called The Council on Aging of Florida, which operates multiple health care facilities. They were accused of using federal Medicaid dollars to pay themselves and one of their sons, who worked for them, excessive salaries totaling more than $1.8 million for 6 years. They were also charged with misusing money to make payments on mortgages, vehicle, credit cards, utilities, Internet and travel. It was estimated that the total fraud, as of January 2013 and assessed by the Florida Attorney General, was approximately $2.75 million.
The CEO, for example, used Medicaid money to pay her own personal mortgage, and then even took more money through charging her own business rent. Much of this information came from the chief financial officer and chief operating officer. The accused CEO and Assistant CEO paid $50,000 each in restitution, as well as costs of the investigation and prosecution. By pleading no contest, these women avoided a full out trial, although based on the original estimated dollar amount of the fraud, appear to have gotten off quite easily, as far as finances go. However, an article reporting the plea indicated that a successful trial would have resulted in a maximum fine of $10,000 each, as well as possible long prison sentences. Thus financially the state brought back five times as much, while the defendants were spared prison. It is only speculation but may have indicated that the state did not have enough evidence to warrant a full prosecution, and saw a benefit by efficiently resolving the case with some sort of financial penalty and admissions of guilt.
The CEO of the Council on Aging of Florida has already had other civil actions against her pending. One particularly notable one has been a suit against one of her health care centers originating from a death of a woman who was a patient there. The death allegedly resulted from malnutrition and dehydration, as well as pneumonia and a series of injuries sustained as a result of the patient falling. The suit alleges negligent care that led to these incidents.
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