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Feds: Firm scammed US by using dementia patients

By Associated Press
Thursday, October 21, 2010 11:18 EDT
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Miami mental health center charged with using dementia patients in $200 mil. Medicare scam

Federal authorities charged the nation’s largest community mental health center Thursday, alleging the Miami-based company billed Medicare $200 million in a scam that preyed on patients with severe dementia and altered their clinical files so the company could charge for more services.

Prosecutors alleged that American Therapeutic Corp. paid the owners of assisted living facilities and halfway houses to force patients to attend programs at their seven mental health centers in south and central Florida. Some patients also cashed in on the scheme by providing their Medicare numbers, while others were “not coherent enough” to demand kickbacks, according to the investigation by the departments of Justice and Health and Human Services.

ATC officials did not immediately return a phone call Thursday.

The grand jury indictment alleges that ATC routinely billed Medicare for therapy and other services for patients suffering from Alzheimer’s and severe dementia even though they weren’t eligible because their mental capacity was so impaired they couldn’t benefit from therapy.

The government says doctors were told to falsify medical charts to make it look like patients had a mental illness and needed medication and therapy to be stabilized. But those patients were already stabilized or didn’t require medications, according to the indictment.

The therapy is supposed to be intensive counseling for patients on the verge of hospitalization, but federal officials said ATC didn’t give any counseling or brought patients in for less intensive group-therapy sessions.

Marianella Valera, one of ATC’s owners, manipulated records so patients would have to stay longer at the facility racking up a higher bill for Medicare, the indictment says.

Government officials are expected to announce possible arrests and charges against individuals at a press conference later Thursday.

Officials said the indictment culminates a months-long investigation into the latest Medicare service to be targeted by scammers — mental health care.

They say crooks have moved from medical equipment and HIV infusion scams to home health care services as federal authorities have cracked down on the estimated $60 billion to $90 billion a year problem. Miami has long been the epicenter of Medicare fraud, responsible for roughly $3 billion a year.

Cleaning up Medicare fraud will be key to paying for President Barack Obama’s health care overhaul. Federal officials have allocated more money and manpower to fight fraud, setting up strike forces in several cities. So far, the operations are responsible for more than 810 indictments that collectively billed the Medicare program more than $1.8 billion.

Authorities started investigating the company last year after an employee contacted them.

Lawrence Duran, another ATC owner, visited Congresswoman Ileana Ros-Lehtinen in January to discuss health care reform and recorded a YouTube video of the meeting, saying his centers treat more than 450 patients daily.

“We want to try to protect them, make sure the patients we’re providing services for are well treated,” he says in the video.

It was not immediately known if Valera and Duran had attorneys.

Source: AP News

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