May 02--Nearly 100 suspects tied to more than $450 million in phony Medicare billings in Houston and six other cities were arrested Wednesday morning in what is believed to be the largest health care fraud takedown in U.S. history.
The arrests, made by investigators with the U.S. Department of Health and Human Services' Office of Inspector General and FBI agents included operators of four Houston private ambulance companies responsible for $7 million in phony trips to an outpatient psychiatric clinic. Owners of two Houston home health care operations tied to $9 million in fraudulent Medicare claims, were also arrested.
Last October, a Houston Chronicle investigation revealed how Houston's Harris County leads the nation in the number of private ambulance companies, vehicles and total amount of dollars paid by Medicare for private ambulance service. The investigation also pointed to how many EMS companies transported able-bodied patients to clinics offering outpatient psychiatric care, also paid for by Medicare.
Nine people, including a doctor, were indicted Wednesday in Houston. Those charged included Gwendolyn Climmons-Johnson, owner of Urgent Response EMS of Houston; Olusola Elliott, owner, of Double Daniels EMS, of Houston; Grace and Thomas Anassi, operators of Touching Hearts EMS of Houston; Okechukwu Ofoegbu, owner of CardioMax, EMS and Dr. Nick Patzakis, Valdie Jackson and Jarvis Thomas, all associated with Jackson Home Healthcare Inc. of Houston. A nurse, Valnita Turner, who was listed as an operator of Houston Compassionate Care Inc., a home health care, was indicted along with Jarvis Thomas, an employee of an undisclosed hospital.
The four Houston ambulance companies all transported patients to Spectrum Care, a community mental health center that offered a "partial hospitalization program." PHPs are designed as an intense, daily alternative to an overnight hospital stay for the mentally ill. Last December, Spectrum Care's two owners were charged in a $90 million Medicare billing scheme, along with an assisted living home owner accused of taking kickbacks for sending her residents to the clinic.
There is no mention of Spectrum Care in the indictments but the Houston Chronicle confirmed with those familiar with the investigation that all four EMS companies transported to the clinic.
The ambulance owners charged on Wednesday were accused of submitting claims that prosecutors claim in the indictments were not covered because patients were transported to a CMHC, not a hospital or medical facility. CMHCs are a Medicare-created entity that does not require a license in Texas.
"Medicare did not cover ambulance transport from a beneficiary's home to a CMHC because a CMHC was not a hospital, skilled nursing facility or dialysis center," the indictments said.
Climmons-Johnson was charged one count of conspiracy to commit health care fraud and four counts of health care fraud for allegedly filing $2.3 million in phony transport claims via her Urgent Response ambulances "that were miscoded, not medically necessary and not provided." Of those claims filed, she received $949,833.30, according to the indictment. She surrendered to authorities this morning.
Elliott was charged with three counts of health care fraud for submitting $1.7 million in Medicare claims for transporting patients on Double Daniels EMS that were miscoded and not medically necessary. Elliott received $557.361.78.
The Anassis are accused of submitting $886,688 worth of ambulance claims to Medicare through their Touching Hearts EMS for which they received $317,602.49 in payment. They are charged with one count of conspiracy to commit health care fraud and four counts of health care fraud.
Ofoegbu was charged with one count of conspiracy to commit health care fraud and four counts of health care fraud for medically unnecessary transports to a CMHC. His company submitted more than $1.7 million in phony claims and Medicare paid him $553,002.64 for them.
Dr. Patzakis, Jackson and Thomas were charged with conspiracy to commit health care fraud and five counts of health care fraud. Turner Jackson and Thomas were charged with one count of conspiracy to disclose identifiable health information. Through their scheme, they were paid $9.7 million in false Medicare claims, according to the indictment.
So far, Climmons-Johnson has turned herself into the U.S. Marshals Service. Dr. Patzakis and Thomas were scheduled to surrender to authorities tomorrow.
This morning's arrests surfaced as federal indictments were unsealed from Miami to Los Angeles. Federal health care fraud charges were also filed in Detroit, Baton Rouge, Tampa and Chicago. Most of the 100 suspects worked in the EMS, psychiatric and home health care sectors. The value of attempted fraud -- more than $450 million -- beats the value of last September's fraud sweep. Then, 91 suspects in eight cities were charged with trying to bilk Medicare out of $295 million.
Baton Rouge, just 270 miles east of Houston, had only seven defendants charged but those seven are accused of trying to con $225 million -- nearly half of the $450 million national total -- out of Medicare through fake bills for outpatient mental health services, through community mental health centers.
Three states -- Texas, Louisiana and Florida -- account for more than 70 percent of all Medicare billings for outpatient psychiatric treatment received at these clinics. In Texas, most of these private, for-profit mental health clinics are located in the Houston area.
Last week, the FBI seized patient files belonging to Westbury Community Hospital and two of its outpatient clinics, one in southwest Houston, the other in Baytown. Sources familiar with the investigation told the Chronicle
The FBI's visit to Westbury marked the third time in the past five months that authorities have descended on clinics offering PHP services, a type of counseling facility that is not regulated by Texas, but paid for by Medicare.
Three months ago, the administrator of the PHP program at Riverside General Hospital was arrested and charged in a $116 million Medicare billing scheme. Mohammad Khan quickly pleaded guilty for his role in the arrangement, which involved kickbacks to patient recruiters and the owners of personal care homes in exchange for steering residents to Riverside's mental health clinics.
When the Chronicle published its findings last year, there were nearly 400 private EMS companies in Harris County, compared to a few dozen in Dallas and San Antonio's Bexar counties. In 2009, private ambulance payments from Medicare totaled $62 million, compared to nearly $7 million in New York City.
Urgent Response's owner, Ms. Climmons-Johnson, told the Chronicle last year that she started the EMS company in 2008.
The Chronicle first approached Climmons-Johnson a year ago, after watching an Urgent Response pick up an able-bodied man at Cadwalder-Quitman Clinic in Tomball and transport him to his apartment in northwest Houston.
She told the newspaper then, she ran an ethical and legal EMS operation.
"We have certainly tried to operate a company that is above board," she told the Chronicle then in a May 25, 2011 phone interview. "We have too much at stake. You have people's lives at stake that you transport. You've got licensed medics who have worked very hard to maintain their state license. So obviously, I wouldn't want to put anyone at risk."
But she explained that patients who obviously can walk, who attend counseling sessions at community mental health centers, sometimes needed an ambulance because they are psychotic, making them a danger to themselves or others.
"A lot of these patients have episodes," she explained a year ago. "Because of that risk factor, they are isolated from other patients during transportation."
She also insisted that the patient who later confirmed to the Chronicle that he had ridden in the Urgent Response ambulance, was not her patient and that she had no record of him.