Hospice Employee Admits to Major Medicare Fraud

A Texas hospice operations director has admitted to following instructions from her boss that resulted in $60 million in fraudulent billings to Medicare and Medicaid. The executive, Melanie Murphey, was employed by Novus Health Services in Frisco, one of the largest hospice providers in North Texas. Murphey reported directly to Bradley J. Harris, the company’s CEO and owner. According to Murphey, Harris quickly put hospice patients on Continuous Care (CC), a designation that requires around the clock care and is covered at a higher rate than standard hospice services. More often than not, this care was not required.  If a patient was on Continuous Care for several days and they still were alive, he would tell Novus nurses to administer lethal drug doses to cause their death in order to prevent Medicare from digging into why a patient was classified as needing CC when it was not medically necessary.

Harris was not alone in his scheme. He worked with at least 5 doctors and 5 nurses who knowingly gave unnecessary medication doses and falsified records in exchange for kickbacks. NBC5 Dallas-Ft. Worth reports that patient records falsely read that one physician conducted appointments, but the time and dates overlap with vacations she took out of the country.

Melanie Murphey took a plea deal with the government in exchange for her testimony in the case, while Brad Harris, his wife, 5 doctors, 5 nurses, and 3 others have been indicted and are awaiting trial.


Hospice Medicare Fraud Right Here in Illinois
Hospice fraud is not unique to North Texas. When multiplied by several patients, altering a Medicare classification can mean a difference of thousands of dollars a day, something that corrupt nursing home owners and hospice owners can become tempted by.

Last year, Seth Gillman, the CEO of now-defunct Passages Hospice, was sentenced to 6.5 years in prison for a $20 million Medicare billing scheme he ran from 2008-2012. Passages was the largest provider of hospice care in Illinois and was found to have been receiving millions for care they billed for but never provided. In particular, Gillman was said to have plotted with local nursing homes to reclassify patients as needing hospice care, even though some were years away from death. By moving nursing home residents to his hospice facilities and classifying them as close to death (coded as GIP or “General Inpatient”), his reimbursement rate went from $150/day to over $600/day per patient. As a reward to nursing homes, Gillman would pay them a percentage of the reimbursement rate while giving himself annual bonuses of over a million dollars each year.

In 2008, staff started challenging Gillman and he began firing those who spoke up. Several ex-employees filed whistleblower lawsuits and the FBI ultimately uncovered Gillman’s scam in 2012. At the time, Gillman was also part owner of Asta Healthcare Company, an Illinois nursing home chain knowingly admitted registered sex offenders without letting the government or other residents know. Asta filed for bankruptcy in 2016.


Report Fraudulent Nursing Home and Hospice Dealings 
Not all hospice facilities and nursing homes are centers that provide compassionate care. Brad Harris and Seth Gillman are just two of the many examples of wealthy, greedy, and careless owners who see the personal opportunity and financial gain that false billings can provide. Medicare and Medicaid fraud is worrisome because it extends beyond scamming the government for more taxpayer dollars. You have to question the moral code guiding nursing home and hospice owners and operators who would engage in such behavior. These same facilities likely maintain low levels of staff, underpay them, and skimp on providing activities, services, and care that residents and patients desperately need.

Nursing home and hospice employees: You are protected by law if you have witnessed or have knowledge of administering fatal doses of medications, Medicare or Medicaid fraud, or patient or resident abuse or neglect. Please call Levin & Perconti’s nursing home abuse and neglect whistleblower hotline at 312-332-2872 for a free consultation with our attorneys. Families, if you suspect misconduct of any kind against your loved one while in hospice or a nursing home, contact us for a free consultation.

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