In a legal complaint published this week, the U.S. Department of Justice accused AseraCare, a national for-profit Hospice group, of making fraudulent Medicare Claims.

The Department of Justice contends that AseraCare defrauded the government of millions of dollars that was intended for patients who were terminally ill. Hospice care is covered by Medicare and is a type of Palliative, which is intended to address pain, stress, and other symptoms of those who are facing a terminal disease. Under Medicare, someone who has less than six months to live is eligible for this type of Medicare coverage, but it will prevent them from receiving other more standard treatments for their condition. This means that those receiving reimbursement for hospice care would not be eligible to also receive medications or treatments that are aimed at preventing death or other complications of their condition.

According to the complaint, AseraCare has, since 2007 at the earliest, claimed patients as terminally ill in order to receive payments from Medicare. These allegations were brought about by former employees of AseraCare, who created a whistle-blower lawsuit alleging that Medicare Fraud is prevalent nationwide. The original lawsuit was filed against Golden Gate National Senior Care LLC, who is related to Golden Living. AseraCare Hospice is owned by Golden Gate.

The Vice President of Golden Living, Blair Jackson, has denied these accusations, stating that they feel they have not violated any laws or regulations.

Samuel Curtis III, who is the owner of Preferred Prosthetics and Orthotics, was ordered to pay more than $250,000 in fines and sentenced to over three years in prison this week for his part in a Medicare Fraud scam that resulted in around a quarter of a million dollars in fraudulent Medicare Claims.

For his participation with the FBI, Curtis’s prison sentence is eight months lower than the standard minimum of 46 months. In his defense, Curtis stated that he would give the prosthetic legs that he billed Medicare for to other people who were in need, but could not afford them.

Curtis, who took over his fathers Prosthesis business in Houston Texas called Team Orthodics and Prosthetics, began defrauding Medicare in 2006. However, shortly after this, payments from Medicare were stopped after a Medicare Investigation into fraudulent claims.

He then packed up shop and moved to Brunswick Georgia, where he purchased a similar business called Team Orthodics and Prosthetics and started over again. This was in 2007, but was also short lived, as the staff at the new business notified the authorities of his actions.

Curtis would expand operations to Arkansas and Detroit, using Medicare account information from patients to submit electronic bills to Medicare. In addition to Curtis, his office manager Cecil Risher, who is 36, received a fine of around $70,000 and was sentenced to probation for his part in the fraud. Another acquaintance, Birdie Leroy Revis, pleaded guilty some months ago and faces five years in prison, but has not been sentenced yet.

Each year, billions of dollars is lost due to Medicare Fraud. There are many types of Medicare Fraud, however setting up Shell Companies and billing for services that are never preformed is one of the most common, especially in Florida.

A shell company is a fake company, typically setup in someone’s name who is not related to the fraudster or using falsified information, often everything about the company is fake, including addresses, although identity theft is another big threat. For cases of Medicare fraud in Florida, the majority involve shell companies.

After the company is setup, they begin to bill Medicare for services and procedures that are not preformed, using valid Medicare account information. Sometimes the company will pay kickbacks to patients and assisted care facilities, or others who have access to Medicare Recipients, although this information is also often stolen.

Most of the time, these individuals do not only setup a single company either, but instead create a group of companies that makes tracking and finding them all more difficult. For example, in the case of Jesus Huarte, who was recently sentenced to over twenty years in prison, his Medicare Fraud Ring extended up and down the east coast, with around thirty shell companies.

A big part of the issue is that Medicare will typically provide reimbursement to claims and follow up on them later. This is sometimes called a bill-and-chase situation, where they chase down the payment later, providing a very lucrative way for scammers to make money.

New legislation is being currently presented to make it a little more difficult for those who wish to preform this type of no-service Medicare scam and starting in 2012, states such as Florida where Medicare Fraud is so common will preform additional audits on those making claims. This also includes 10 other states, where Medicare Fraud is most common.

Mansour Sanjar and Cyrus Sajadi, the owners of a mental health clinic in Houston, as well as Chandra Nunn, who is the owner of an assisted living facility, were arrested last week in Houston on charges that they were responsible for more than $90 million in Medicare Fraud.

Sanjar and Sajadi, who are 78 and 64 respectively, are both physicians and own Spectrum Care, which is a clinic that specializes in partial hospitalization treatment. According to authorities, they have been billing Medicare for services that were not medically necessary and, in some instances, not preformed. Investigators contend that in some instances, Medicare was billed for mental health treatments that included group activities, like bingo.

Chandra Nunn, who is a 33 year old woman who, public records state, owns Love and Caring Homes Inc, which is an assisted living facility. Nunn is accused of using her position as owner and operator of the nursing home to send patients to Spectrum Care’s clinic for unneeded services that were billed to Medicare. Federal investigators state that she was paid $10,000 from Sanjar last year, as part of a payment to send patients to Spectrum Care.

Along with billing Medicare over $90 million in fraudulent claims, authorities believe all three individuals also bribed Medicare Recipients, sometimes providing cash or even cigarettes to get them to attend Spectrum Care. They may face additional charges as well.

An additional $20 million was paid to private medical ambulances that transported patients to Spectrum Care, which is typically only covered by Medicare when the trip is required as a medical emergency. Investigators have stated they are looking into this as well.

This is not the first time Sajadi has fallen afoul of the law, he was accused of having issues with properly keeping and maintaining patients records twice over the past 5 years by the Texas Medical Board and the state Government.

On the same day as the arrest, Wednesday, Syracuse University distributed a report that states that, according to data from the Department of Justice, Houston Texas is the second most common location in the United States for Medicare Fraud. Recently, a doctor in Houston was sentenced to 70 months in prison for his role in Medicare Fraud.

Richard West, a Vietnam Veteran who receives Medicaid Benefits, testified at a House Oversight Committee last week, explaining his experience with Maxim Healthcare Services over 7 years ago.

Richard West requires a ventilator and oxygen to breath and uses a wheelchair to get around, requiring in home heathcare. There was no way he could afford this without Medicaid, unfortunately, and so back in 2004, when his Medicaid was cut-off for exceeding his benefit limit, his health was literally put at risk.

After a little research, West discovered that his in-home healthcare provider, Maxim Healthcare Services, had fraudulently billed Medicaid for over 700 hours of in-home nursing care, which netted the company more than $20,000.

Armed with this knowledge, he notified Medicaid, who did not care. Nor did his social worker. Left with no other options and desperately needing health care that he could not afford, West contacted an attorney who filed a Whistleblower Lawsuit, which is allowed as part of the False Claims Act.

Of course, he did not see immediate results, but it did force the government to take action against Maxim Healthcare, where they had simply ignored him before.

Recently, over 7 years later, Maxim Healthcare agreed to a $150 Million Settlement, which was the result of West’s case. However, the company is still in business and used a Deferred Prosecution Agreement to escape any real charges. However, a number of people who used to be involved with the company have been found guilty of fraud, including former executives.

Even though it is business as usual for Maxim Healthcare Services, after paying a relatively small fine and reaching an agreement with the federal government to avoid being charged with a crime, West will receive almost $15 million of the settlement. So, at least West should not have to rely on a system that only was willing to help this retired veteran receive the health benefits he was entitled to after a lawsuit made the Medicaid Fraud Public.