Illinois’ home health care industry rife with fraud, tainted by unscrupulous physicians
Chicago Tribune (IL)
Dec. 14--His hands trembled at first. Then his vision blurred. Finally, unable to control a malignant blood pressure condition, Tinley Park cardiac surgeon Banio Koroma lost his malpractice insurance, then his operating room privileges and finally his professional standing.
Fortunately, he lived in Illinois, where medical regulation has been so lax even the most desperate of doctors can find financial reward.
Koroma took refuge in home health care, a lucrative and growing industry rife with fraud and tainted by unscrupulous physicians who travel to patients' homes in search of profit, then bleed money from taxpayer-financed programs.
The down-on-his-luck doctor took advantage of this loosely regulated world to exploit his patients and command a central role in a multimillion-dollar taxpayer swindle that breached the homes of 15,600 older adults getting services from a Chicago company called Mobile Doctors.
For adults hobbled by disability or disease who want to stay out of nursing homes or hospitals, home health care services can be a godsend.
For criminals who want to tap into federal Medicare dollars, it can represent a loosely guarded bank vault.
A Tribune investigation reveals that Illinois public health regulators proved unprepared for a surge in new home health care companies, doling out too many home health licenses too fast and failing to provide meaningful oversight.
Even today, most anyone can own a home health care business for a $25 license fee -- no criminal background check required.
Consequently, the Chicago metropolitan area is a hot spot for fraud, deemed among the most corrupt regions nationally. In the last five years, federal investigators estimate, area home-health agencies have improperly collected at least $104 million of public dollars.
Many home health companies operate lawfully and in the best interests of their customers. But fraud is so pervasive throughout the industry, federal officials say, that for every conviction like Koroma's, there are many other participants who are able to skate away.
As a result, already-vulnerable patients are put at risk.
Corrupt home health companies and complicit physicians as well as nurses secretly laced medical files with false diagnoses involving tens of thousands of Chicago-area patients, the Tribune found.
An analysis of federal court and enforcement files since 2012 shows that thousands of patients have been subjected to unwarranted procedures, therapies and tests; some were prescribed unneeded and powerful drugs.
Most victims were unaware that their medical histories were hijacked by swindlers -- there is no legal requirement to notify or warn patients when fraud is uncovered, or when providers are convicted of crimes.
Case files show that a disabled man in his 80s was denied a wheelchair by a government insurance program because a Chicago-area business had falsely purchased one in the man's name and then illegally pocketed the reimbursement check, according to AgeOptions in Oak Park, a federally funded advocacy group.
In another case, a hospitalized man was denied a transfer to a Chicago rehabilitation center because a home health company had fraudulently billed the government for nonexistent convalescent care.
"These scammers are really smart," said Jason Echols, statewide director for a senior Medicare program at AgeOptions. "Anybody could be a victim."
Debra Lingelbach, a 48-year-old mother from Rockford, suffered inexplicable chest pain. "My chest was hurting all the time," she recounted in a video deposition involving a civil case. "Like someone was stabbing me in the chest."
Yet her traveling physician, Charles DeHaan, declared that her lungs "sounded fine," she said. DeHaan was part owner of a physician staffing company, which was exempt from public health licensing and oversight.
DeHaan pleaded guilty this year to two counts of felony health care fraud related to collecting $1.5 million for bogus examinations and inflated billings, federal court records show. Sentenced to 10 years in federal prison, he faces pending state charges, unrelated to Lingelbach, that involve accusations of sexual assaults involving multiple patients.
Three months after DeHaan's arrest, civil court records show, Lingelbach was examined by a new physician who delivered a devastating diagnosis: advanced-stage lung cancer.
She died months later.
A playbook for fraud
Diana Jocelyn Gumila, manager of a physician-staffing business in Schaumburg, was furious.
More than 300 Chicago-area home health companies hired her company, Doctor at Home, to certify that patients were homebound and required skilled nursing care. When that happened, Gumila and company owners profited through payments from Medicare, a taxpayer-funded insurance program for those age 65 and older.
Profits flowed as long as patients remain certified -- as long as nobody documented that patients were, in reality, healthy and active and did not require in-home care.
But some of Gumila's physicians were too honest. A diagnosis is a subjective decision, she often tutored. She told one physician to "be an artist" and "paint the picture" to describe each patient -- the more abstract, the better.
In a flurry of memos beginning in January 2012, she coaxed her staff of seven physicians and three physician assistants to "please minimize the use of the following words in your documentation: very stable and stable."
Finally, in October 2013, Gumila confronted her most obstinate employee, Dr. Ewa Nowak, a newly hired Polish-educated immigrant who finished her medical training in Chicago.
Nowak had decertified a woman who was a long-standing patient of a Chicago home health company.
In her chart, Nowak wrote: "We met at the front of the patient's house. She was coming back from grocery shopping with very heavy bags of groceries in her both arms. She walked from the train station three blocks. No complaints about any problem."
But Gumila, 45, a registered nurse, overruled Nowak and recertified the woman as homebound, court records show.
Doctor at Home followed a standard playbook for fraud: Falsely certify patients as homebound and in need of nursing care, submit fraudulent bills to Medicare -- and profits flow.
There are few checks and balances.
Unlike most branches of medicine where physician referrals are necessary to qualify for insurance coverage, Medicare allows home health agencies to recruit patients before they are certified for care. In Chicago, federal records show, this has spawned a shadow market of patient brokers who troll grocery stores, bus stops, churches and food pantries in search of susceptible adults.
Physician Rogelio Cabrera, who was controlling owner of a home health company, told federal investigators that illegal kickbacks for new patients were commonplace.
The federal Anti-Kickback Statute prohibits payments to induce or reward patient referrals under Medicare or Medicaid. Nonetheless, at least 15 Chicago-area physicians have been charged or convicted of accepting or paying kickbacks involving home health patients in the last seven years, according to a Tribune analysis of federal court records.
Cabrera doled out $500,000 to area physicians for patient referrals to Romyst Home Health Care, court records show. Cabrera, now deceased, was convicted in 2014 on a federal felony count of conspiracy to defraud.
"I discovered that most physicians were expecting to be paid in exchange for referring patients to the home health care business," Cabrera told federal prosecutors. "It had effectively become a way of life for those physicians, and we felt we had no choice but to accede to their requests."
Gumila's scheme needed pliable physicians to make everything work.
As a condition of employment, physicians signed over control of patient files to her. Physicians' signatures were digitally scanned and applied by Gumila and her staff to medical records; doctors were often unaware what services were billed in their names, according to court records.
Assistant U.S. Attorney Stephen Lee, who handled Gumila's case, told the court that when doctors and physician assistants discharged patients who did not qualify for services, Gumila overruled some and ignored others. When clerical staff raised concerns about fraudulent activities, Gumila lied to some and kept information away from others.
And, Lee said, as other home health companies were charged with federal crimes over the years, Gumila "viewed it not as a wake-up call but as an opportunity to expand her company."
Gumila shared patient files, filled with personal details, to unlicensed accomplices based in the Philippines, where patient files were altered and manipulated to reap higher payouts, according to court records. Prosecutors found dozens of email communications from overseas accomplices who were falsely identified as nurses.
Doctor at Home often billed Medicare at the highest levels, a fraudulent practice called up-coding, a government audit found. A short visit generated a $29.40 payment; a longer visit tallied $71.31 in reimbursement.
Gumila was found guilty by a federal jury in 2016 of fraud that totaled $15.6 million and sentenced to 72 months in prison. She has appealed her conviction.
The doctor who balked at certifying a healthy patient -- Ewa Novak -- followed a different path. Nowak quit her job shortly after her meeting with Gumila.
She then found employment with another Chicago medical group but quit after three months, she testified in Gumila's criminal trial, because "they were defrauding Medicare."
Next, she lasted one day at another health care company because of pressure to commit fraud, she testified.
She landed a third job with another Chicago-area physician-staffing company but resigned three months later after witnessing fraudulent practices involving home health patients, according to her testimony.
Nowak, who wishes to keep details of her life private, maintains her physician's license but said she no longer works in health care.
Illinois regulators falling short
Illinois makes it easy for bad doctors to prosper.
Department of Public Health officials say 759 private businesses offering home health services held state licenses as of September this year, including agencies that provide nurse staffing, housekeepers or personal aides.
But physician-staffing companies are exempt from the state licensing process -- and from even minimal oversight such as unannounced inspections. That's because in Illinois and many states, businesses that dispatch physicians-for-hire to patients' residences are not legally defined as a home health company, even though these companies have been growing in number and influence.
Since 2012, at least 10 physician-staffing companies, including Mobile Doctors, have been federally convicted in some of Chicago's largest home health care fraud cases -- a higher number than any other metropolitan area, a Tribune analysis of federal cases found.
None was licensed by Illinois as a home health company. None was subject to periodic state surveys. All profited at the expense of taxpayers and patients.
Historically, physician-staffing companies played minor roles in home health care, relegated to certifying patients for Medicare.
"Physician staffing companies are not licensed as home health agencies because they are not providing home health services," a Public Health Department spokeswoman said.
But the Tribune found a new breed of profiteers has popped up in recent years, focused solely on home care while billing Medicare for repeated examinations, prescriptions and medical diagnostic tests.
Those types of firms can play a central role when there's fraud. The Chicago area has more physician-staffing businesses convicted of health crimes than any metropolitan area nationally, according to a Tribune analysis of every federal case involving home health care fraud from the last three years.
Under the regulatory loophole, Mobile Doctors was not required to obtain a home health license or subjected to state oversight, despite conducting in-home examinations and providing diagnostic care to tens of thousands of patients across six states.
Owner Dike Ajiri, a former collegiate rugby player, rented a nondescript brick building on North Elston Avenue in 2008 and partnered with 300 home health companies to examine and certify patients for Medicare-paid care.
His go-to physician was Koroma, one of 19 Chicago-area physicians convicted of felony home health crimes in the last five years, the Tribune found.
"Dr. Koroma has been invaluable in his willingness to sign orders," Ajiri wrote in a 2009 staff email. "He has also been willing to sign various orders for various things which we could not get the primary doctor to sign."
In 2012, for instance, Koroma purportedly conducted 4,176 in-home visits that spanned from 40 to 75 minutes, according to Medicare claims data. If true, Koroma visited an average of 11 patients every day, including weekends and holidays.
Federal billings also reflect Koroma's approval for 3,700 ultrasound tests, which federal prosecutors charged were largely conducted to drive up profits for Mobile Doctors.
Koroma, 68, was found guilty by a jury of two felony counts of health care fraud involving Medicare and two felony counts of making false statements; he was sentenced last year to 40 months in prison. Since he never became a U.S. citizen, he is expected to be deported after his prison term to Sierra Leone.
Ajiri pleaded guilty in 2015 to a felony count of health care fraud involving Medicare, was sentenced to 15 months in federal prison and ordered to pay $1.8 million in restitution.
Even when companies are licensed as home health agencies, regulatory oversight has been needlessly fragmented between federal and state agencies, which often failed to share case information involving violations, enforcement records show.
State health department oversight focuses primarily on administrative paperwork rules and pays little attention to financial fraud, which is delegated to federal oversight.
Inspections occur every three years, long enough for home health companies to collect millions of public dollars and disappear without warning.
That's how the state issued a clean bill of health to a home health agency that is linked to a federal criminal investigation.
In 2013, the owners of Pro Vita Home Care in Lincolnwood closed up and disappeared after federal regulators demanded repayment of millions of dollars that allegedly were improperly paid by Medicare, federal records show.
FBI officials launched an investigation. But one of the Pro Vita owners purchased the license of an existing home health agency located just 2 miles away and reopened as Lincoln Park Home Health Care in Chicago, state and federal enforcement records show.
State public health officials, who were unaware of the federal investigation, also searched for the whereabouts of the owners who had failed to renew the Pro Vita license.
But as one arm of the Public Health Department searched for the owners, another arm of the department readily approved the license transfer, state records show.
Detection should have been easy. On the application for a new license, under previous experience, an owner and several staff members listed their years of work at the abandoned company.
As a result of the Tribune finding, public health officials said they plan to modify state regulations to require a more thorough background check on previous employment.
Each year on average, at least half a dozen home health businesses are abandoned without notice, the whereabouts of owners unknown, state records show.
Unlike other major branches of health care, which use the web to provide information on enforcement actions and surveys, oversight of Illinois home health care is conducted largely without public notification.
Instead, the public is required to file a formal public records request to view even basic information about a home health business, such as ownership, enforcement history and quality rankings. Requests can take weeks to fill.
The Tribune filed multiple requests to obtain even aggregate statistics, such as how many surveys and complaint investigations are conducted each year.
Each year, health department officials survey about 163 businesses and conduct 53 complaint investigations. Officials substantiated minor violations, on average, in less than 1 in 5 cases, which were resolved with written plans of correction.
A department spokeswoman acknowledged that "no major enforcement actions have been taken against home health agencies" in the last five years.
The once-moribund home health industry burst to life in 2007 as government programs shifted funding to "aging in place" strategies as a way to shorten or avoid costly hospital and nursing home admissions.
By 2013, as new home health companies flooded into Chicago, alarmed federal regulators banned Illinois from issuing new licenses, marking the nation's first home health care moratorium, which expanded to Florida, Michigan and Texas -- other hot spots for fraud.
"Health care fraud has been a significant problem in Chicago for years," federal prosecutor Lee said.
Today, Cook County harbors more home health companies than the entire and more populous state of New York, Tribune analysis found.
Significant federal resources are now focused on home health fraud in Chicago, including an investigative strike team and a prosecutorial unit dedicated to health fraud cases.
In the last seven years, home health care fraud charges have been filed against 96 people -- including physicians, nurses, recruiters and owners -- involving two dozen home health or physician staffing companies throughout the Chicago area, the Tribune's analysis of federal court records show.
Nonetheless, federal studies show, the rate of fraud remains dauntingly high. Marshaling limited resources, prosecutors often focus on the most blatant violators. But hundreds of smaller co-conspirators have gone free so far, the analysis shows.
At least 357 active home health companies in the Chicago area have been linked to potential financial fraud by federal investigators but never charged, the Tribune found.
This isn't just a Chicago problem. In 2014 congressional testimony, Gary Cantrell, a deputy inspector general for U.S. Department of Health and Human Services, acknowledged, "Since 2012, we have closed over 2,200 investigative complaints because of lack of resources."
But it's not just resources that are at issue; federal regulations play a role in making home health fraud so tempting.
Under Medicare, home health companies can bill in advance for a portion of estimated costs of patient care. Accounts are later reconciled, but it can take years for federal auditors to catch up to savvy crooks.
In an effort to thwart false claims, federal officials in 2016 ordered Illinois companies to justify patient billings before claims were submitted. Officials planned to expand the program to Florida in March this year, then the nation.
The Illinois HomeCare & Hospice Council argued that pre-payment reform was too broad and costly for lawful providers confronted with an avalanche of new paperwork.
"We support the moratorium. We want more enforcement," said Executive Director Sara Ratcliffe, whose trade organization represents 160 home health agencies that serve a majority of Illinois' in-home patients.
But the government's reform unfairly punished legitimate businesses, she said, akin to disciplining the whole class for the actions of one student.
The reform measure also encountered fierce bipartisan resistance from Florida U.S. Sens. Marco Rubio and Bill Nelson, bolstered by lobbying powerhouses like the American Hospital Association.
Then-U.S. Department of Health and Human Services Secretary Tom Price, following a Trump administration mandate to eliminate regulations deemed burdensome to business, suspended the Illinois reform in March 31 this year.
With the failure of billing reform, it's up to prosecutors and the licensing moratorium to stave off fraud.
But if the moratorium was meant to prevent new operators from entering the field, it's falling short. Existing licenses -- and the patients that come with them -- are routinely brokered over the internet.
"Do you desire to own a Home Health Care in the State of Illinois but cannot obtain a license due to ONGOING MORATORIUM?" touted a recent Chicago listing. "SAY NO MORE!"
To examine the home health care industry, the Tribune first obtained licensing information for 819 private home health companies from the state Department of Public Health. Records revealed that health officials had issued too many licenses too fast with a minimal bar to entry -- a $25 state fee with no background check required.
Licensing files were supplemented by research that included public record requests for survey reports, complaint investigations and enforcement actions.
The Tribune also gathered seven years of federal court cases from U.S. District Court for the Northern District of Illinois, which included exhibits encompassing internal memos, emails, audio recordings, videos and transcripts. Court files were cataloged in a database to track dozens of felony cases and 98 criminal defendants, creating a reporting tool that was used to track patterns and frequency of fraud.
The Tribune also analyzed millions of patient billing claims obtained from the Centers of Medicare & Medicaid Services, a division of the U.S. Department of Health and Human Services. A variety of publicly available databases were used to track individual billing claims by home health companies and physicians, which also detailed types of prescriptions and medical tests. No identifying patient information was involved.
Medicare data are differentiated through the use of alphanumeric codes under the Health Insurance Prospective Payment System, or HIPPS. The Tribune analyzed data with 10 different codes that tracked in-home physician visits with new and established patients. Three other codes were used to determine how often physicians billed, and for how much, to certify patients for home health care or to review patient files.
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