Dr. Janet Johnson Hunter Pleads Guilty to Medicare Fraud…what was she thinking?

January 5, 2010

For more than three years, Janet Johnson-Hunter, a licensed medical doctor and former owner/manager of a private ambulance transportation company, committed fraud.  Johnson-Hunter, late this past year, pled guilty to conspiring to conceal material facts in connection with the delivery of payment for health care benefit, items and services according to a news release from the US Attorney’s office.

Johnson-Hunter changed medical records and ordered employees to change records to indicate patients’ needs to ride in an ambulance, when they did not, in order to be reimbursed by Medicare or Medicaid, according to a federal criminal information complaint was filed Nov. 30.   According to numerous EMT’s and billing staff, Johnson-Hunter, directly and through subordinates, directed employees to re-write medical records which indicated that patient-beneficiaries could sit upright, stand, walk or ride in a wheelchair.  The loss to Medicare/Medicaid = $400,000.

WHAT WAS SHE THINKING?

First I should say, it is not for me to point the finger.  I am not here to pass judgment, that is not mine to pass.  Rather, I’d like to explore the WHY this would or did happen.  As a business ethics speaker, I know that EVERY CHOICE HAS A CONSEQUENCE!  I have lived those words and spent time in federal prison as a result of my past misdeeds.  While I am not proud of that fact, it is a fact nonetheless.  The one thing I am able to do, as a result, is look at choices from a unique perspective.

NEED:  I can’t identify the need directly.  One would assume that to change records in order to increase billing or reimbursement from Medicare would driven by a need for money.  Seems obvious, but Bernie Madoff surely did not need the money, yet he effected one of the largest frauds in US history.  So what’s the need here?  Perhaps those who know Dr. Johnson-Hunter could help with that piece of the puzzle.  FEEL FREE TO COMMENT.

OPPORTUNITY:  It is of little doubt that any system can be manipulated.  If one person can take advantage of a system, one might say that there is a material weakness.  In this case, Janet Johnson-Hunter did not do this alone.  Rather, she used her power and influence to cause others to change records and thus deceive Medicare.  Now…a fair question is: will the Federal Government go after those who admitted to changing records or have they been given immunity from prosecution.

RATIONALIZATION:  This area is most troublesome.  Here’s a reality check…a 50 year old female medical doctor knows better.  You can’t live for half a century and earn a medical degree without having some clue that choices have consequences.  This is especially true when you involve others in the fraud.  You have to know that someone somewhere is going to reveal the truth.

Why would Dr. Janet do this..?  Perhaps that will come out as people comment.  For now, let me restate the obvious:  EVERY CHOICE HAS A CONSEQUENCE.  When you hear the words, “You will reap what you sow” let me state from experience – THEY ARE VERY TRUE.

Likely, Dr. Janet will spend time in federal prison (as did I some 15 years ago for a similar crime).  Prison is no fun as Dr. Janet will soon find out.  But, the question she has to face now, especially now since her misdeeds are brought to light, is what choices will she make now that prove redemptive in the future.

A wise man once said to me:  “You’ve made a big mistake, BUT YOU ARE NOT A MISTAKE!  The choices you make today will define your life in the future and the legacy you leave for your two sons.  MAKE THOSE CHOICES WISELY!”

Comments are welcome


Texas D.O. – Daniel Andrew Maynard – Pays $253,000 to Resolve Allegations of False Health Care Claims!

May 2, 2008

As an ethics speaker, I am not sure why. Perhaps the US Attorney’s office didn’t have enough to convict. Whatever the reason, there was resolution in a case in the Northern District of Texas from a Texas D.O. – Daniel Andrew Maynard and the US Attorney’s office.

By entering into a settlement, Maynard admits no wrong-doing and denies all liability. However, the very fact that Maynard is paying over a quarter of a million dollars says something.

According to the US Attorney’s office, in February 2005, the Office of Inspector General for the Department of Health and Human Services (OIG), the Texas Health and Human Services Commission, Office of Inspector General (HHSC), and the Federal Bureau of Investigation referred allegations to the government that Maynard had inflated billings for thousands of physician evaluation and management services submitted to the Medicare and Texas Medicaid programs. The U.S. and Texas allege that on at least 32 separate days, Maynard billed both programs for patient encounters – that if provided as claimed – meant he spent more than 24 hours each day seeing and treating patients. Maynard claimed to have seen more than 100 patients on six of those occasions. The U.S. and Texas contend that contrary to Maynard’s claims, he could not have possibly furnished anything more than the most basic of physician services during those 32 days.

Hum…guess Maynard was a work-a-holic? While, again, according to the settlement there was no admission of wrongdoing, the fact remains that a substantial sum has been paid to correct what appears to be incorrect behavior.

Further, as part of the civil settlement, Maynard agreed to be permanently excluded from participation in Medicare, Texas Medicaid, and all other federal health care programs. Maynard previously pleaded, in October 2007, no contest to several Dallas County criminal counts charging him with delivery of a prescription or prescription form without a valid medical purpose.

According to a 2003 news release, Maynard has had issues with his medical practice. The news release stated: “Dr. Maynard’s office was raided by local, state and federal law enforcement officials based on information regarding non-therapeutic prescribing, medically unnecessary prescribing and possible patient harm, including deaths, as a result of his prescribing activity. The panel determined that Dr. Maynard had violated several provisions of the Medical Practice Act by failing to keep adequate medical records related to treatment of Intractable Pain Patients; failure to practice medicine in an acceptable professional manner consistent with public health and welfare; committing unprofessional or dishonorable conduct that is likely to deceive or defraud the public; and by prescribing dangerous drugs and controlled substances to persons who are known or should have been known to be a drug abuser.”

Every choice has a consequence. So far, Maynard should be pleased that the consequence was civil – not criminal. He may, by agreeing to a civil settlement, be able to keep his medical license. However, since he cannot participate in either federal or Texas state health care programs, his client base will likely be limited.

Feel free to share your comments!

Business Ethics Speaker – Chuck Gallagher – signing off…


Health Care Fraud – Mary Lou Hernandez Sentenced to Prison and Over $4 Million in Restitution!

April 9, 2008

Sometimes people get the idea that since the federal government is so big – it just can’t police itself and hence it is an easy target for crime. Yet, all to often, those who take advantage of this illusion are often caught and find that there is another branch of the government they get the opportunity to experience – the Bureau of Prisons.

That’s the case for Mary Lou Hernandez, owner of Angel Care Medical Supply, who was sentenced to 2 years in federal prison and ordered to pay $4,409,518 in restitution. Now, (not that I’m proud of this) but having spent time in federal prison, I know that the next two years for her will be life changing. Prison is no fun. But, facing a $4+ million bill when she gets out is daunting – especially for a convicted felon. How that will get repaid is mind boggling.

According to the facts, on November 16, 2006, Hernandez pleaded guilty to a 3-count Information charging her with conspiracy to commit Health Care Fraud, Health Care Fraud and violation of the Anti-kickback statute.

A Certificate of Medical Necessity (CMN) documents a beneficiary’s physician’s conclusion that durable medical equipment (DME) such as wheel chairs, hospital beds, ventilators and oxygen equipment is medically necessary and reasonable for the treatment of an illness or injury. Hernandez admitted that beginning in 2000, she paid between $800 and $1,000 in kickbacks to five San Antonio area physicians for each CMN. Hernandez also admitted to submitting false Medicare and Medicaid reimbursement claims for DME. The factual basis alleges that from January 13, 2001, to September 30, 2004, ACMS was overpaid $3,032,404.94 by Medicare and $1,377,114 by Medicaid.

Now, one would have to believe that Hernandez, while paid over $4+ million has spent the money. I doubt that she has it sitting in a savings account somewhere. Hence the issue of restitution is significant.

Every choice has a consequence. As a white collar crime and business ethics speaker, I speak from first hand experience about the truth about consequences. Reality is – no one escapes the consequences of their choices. While Hernandez may have looked good for a time and avoided the consequences – she did not avoid the consequences all together. Prison is no fun and Hernandez is facing two years in prison for her conviction. Serving time will prove to be a dramatic change from her prior activities. You do reap what you sow.

If anyone reading has any background on Hernandez or Angel Care Medical Supply – feel free to comment as I study the behaviors and backgrounds of those convicted of white collar crime.

White Collar Crime Speaker – Chuck Gallagher – signing off…


Former Healthcare CEO – Angela Edwards – Sentenced to Prison for Health Care Fraud!

March 18, 2008

To some it is easy to cheat the government. Years ago I taught courses on proper coding of medicare and medicaid billing. The courses were successful, but often, I would get people following the course to tell me an “inside” tip about how to circumvent the system in order to maximize the return – fraudulent coding in effect. My response – You’ll go to jail for that.

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The former Chief Executive Officer of Oasis Medical Clinic in Plainview, Texas, Angela Michelle Edwards, was sentenced today to 30 months in prison for health care fraud. Edwards admitted that from January 2002 through August 2005, she caused “up-coded” and improperly coded claims and diagnosis codes to be submitted to Medicaid, Medicare and private insurance companies in order to receive higher payments than those authorized by the payors. Even though she knew that only clinicians were authorized to make diagnoses and determine the level of a patient visit for payment purposes, Edwards personally changed bills submitted by the clinicians and taught her billing staff to routinely change bills by submitting claims for visits that were marked at higher levels than the ones indicated by the clinician and by adding patient diagnoses and procedures to the claims before they were submitted to the payors.

According to the US Attorney’s news release: Edwards admitted that she is personally responsible for the restitution in this case because: she caused Oasis to be overpaid; she caused poor banking and accounting records to be kept; she unlawfully took money f rom Oasis’ accounts for personal expenses during her tenure as CEO; and Oasis is now in bankruptcy. As a result of her actions, health care payors, including Medicare, Medicaid, Children’s Health Insurance Program and commercial insurance companies, paid Oasis $370,657 for fraudulent billings.

Not only did this fraud cost Edwards her freedom, but she also lost her license as a nurse since she was a convicted felon.

Every choice has a consequence. As a white collar crime and business ethics speaker, I speak from first hand experience about the truth about consequences. Reality is – no one escapes the consequences of their choices. While Edwards avoided the consequences for a time – they are not avoided forever. You do reap what you sow.

Perhaps Edwards will find her time in prison reflective so that she can use her talents in a productive way to help others upon her release.  Every choice has a consequence and good choices can yield positive results – even for convicted felons!

White Collar Crime Speaker – Chuck Gallagher – signing off…


$34 Million Dollar Payroll Tax Fraud By Texas Nursing Home Executive!

February 27, 2008

U.S. Attorney Richard Roper said in a recently issued news release, “This case is the one of the largest payroll tax fraud cases ever prosecuted in the U.S. Mr. Trebert admitted evading more than $34 million in payroll taxes – this is nothing short of egregious. Nursing homes should be safe havens for the elderly and vulnerable, not vehicles for criminals to commit fraud.”

Gary R. Trebert, age 57, pled guilty to two counts of an indictment that charged him with various offenses related to his operation of nursing homes in Texas and elsewhere. Co-defendant Larry Gordon May pled guilty to his role in the conspiracy in October 2007 and co-defendant Stephen Michael Ewing, a/k/a “Stephen Michaels,” is scheduled to go on trial March 3, 2008.

Trebert admitted that beginning in August 1999 and continuing though mid-May 2004, he, Stephen Michael Ewing and Larry May conspired together, and with others, to defraud the U.S. by impeding, impairing, obstructing, and defeating the lawful government functions of the IRS in the ascertainment, computation, assessment, and collection of the revenue, that is, nursing facility employees’ withheld income taxes, social security taxes and medicare taxes, and HHS in the administration of the Social Security Act and the Medicare and Medicaid programs.

As part of the conspiracy, Trebert and his coconspirators, using the names of sham corporate entities, obtained control of 70 licensed nursing facilities with thousands of patient beds and thousands of employees. In order to acquire control of these facilities, Trebert, Ewing and May used false statements and false and fraudulent documents including Applications for Nursing Facility License and Medicaid Contracts, Medicare Federal Provider Enrollment applications, ownership documents, IRS Employer Identification Number applications, Health Insurance Benefit Agreements, and Electronic Fund Transfer forms. Their falsifications included falsely identifying relatives as owners, operators, and managers of the nursing homes on the applications; failing to disclose staffing/payroll companies on nursing home applications; failing to disclose Ewing and May as the true owner/operators of nursing homes; and forging names of individuals on filed documents to divert responsibility away from the three defendants. Trebert and his co-conspirators used the false statements and documents to hide from HHS, state licensing and Medicaid agencies, and the IRS, the true control and management of the nursing facilities, their responsibility for more than $200 million in money derived from the nursing homes, and their responsibility for the nursing facilities’ residents.

More than 150 sham staffing/payroll entities, many with foreign business addresses at drop boxes in England and Austria, were created to file Form 941 employer withholding tax returns with the IRS, preventing the IRS from assessing and attempting to collect more than $34 million of unpaid payroll tax liabilities from Trebert, Ewing and May, and creating the appearance that these sham staffing/payroll entities employed more than 4500 nursing facility employees, when they did not. From time to time Trebert caused his coconspirator to fly to London in order to mail to the IRS the sham payroll/staffing companies’ false withholding tax returns.

Trebert admitted that he and his coconspirators diverted to themselves and their personal activities substantial sums of money derived from their nursing home operations and from the non-payment of employees’ withheld payroll taxes. Trebert also admitted that in April 2004, he attempted to evade and defeat the assessment and payment of more than $4,113,000 in withholding taxes taken out of employees’ pay at 42 nursing homes he and his coconspirators controlled.

“Evading employment taxes can have serious consequences for employers and their employees. Today’s guilty plea demonstrates that those who willfully attempt to undermine our tax system by playing fast and loose with the rules will be held accountable, regardless of how complicated a scheme they devise,” said Erick Martinez, IRS Special Agent in Charge for the Dallas Field Office.

In the plea agreement, Trebert will spend 8 years in federal prison. Needless to say, when sentenced, Trebert will also be facing substantial restitution – which he may not be able to repay.

Every choice has a consequence! Regardless of how well thought out, no one will escape the consequences of their choices. As a business ethics and white collar crime speaker, I know from personal experience that you reap what you sow. While Trebert and others got by with their scheme for 5 years, the reality is the consequences of their actions will be far greater than any benefit they received.

Your comments are welcome – as you might have been a victim of this massive scam. But let me leave you with this – before you make a choice consider what is the worst thing that could happen – feel what that would feel like – then make your choice. Trust me, the consequences to negative choices are far worse than any gain you can imagine!


Health Care Fraud! – Wheelchair Fraud Out Of Texas – Another White Collar Crime Comments Ethics Speaker Chuck Gallagher

January 31, 2008

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Four folks have been convicted in a program to defraud the Medicare and Medicaid program through what has become widely known as a “motorized wheelchair fraud” scheme.

Carmelita Thurman, 35, who jointly ran three durable medical equipment (DME) companies in the Houston area pleaded guilty today to conspiracy to commit health care fraud and health care fraud in a hearing before U.S. District Judge Nancy F. Atlas. Thurman is the last of four charged by indictment for their involvement in a scheme to defraud Medicare and Medicaid. Michelle Ann Ray, 40, pleaded guilty last week. Terri Ann Orozco, 44, pleaded guilty early this month and Sharon Thomas, 41, pleaded guilty in October 2007.

Thurman, Orozco and Ray, jointly ran three DME companies in Houston: Twice as Nice Medical Supply, Top of the Line Medical Supply and Heart to Heart Medical Supply. From 2002 through 2004, the three companies billed Medicare and Medicaid primarily for motorized wheelchairs and related accessories for approximately $7 million and received $3.8 million in payments on the claims, but actually delivered less expensive scooters to the beneficiaries. The beneficiaries, who could sit, stand and walk, did not meet the medical necessity requirements to receive a motorized wheelchair and mostly did not use or need the scooters delivered by defendants.

Thomas, 40, by and through her Houston company called S&L Personal Care, bought fraudulent prescriptions for motorized wheelchairs from various Houston physicians, most of whom have since been convicted of health care fraud. Thomas billed her prescriptions through the other defendants’ DME companies.

During the conspiracy, the Medicare reimbursement rate in Houston, Texas, for a K0011 motorized wheelchair and related accessories was approximately $4,700; with the Medicaid 20 percent copay, the paid amount was close to $6,000. Both a motorized wheelchair and a scooter cost approximately $800 to $1,000 wholesale.

All four defendants face a statutory maximum penalty of 10 years imprisonment and a $250,000 fine for the health care fraud conviction and the conspiracy to commit health care fraud convictions and will be subject to a court supervision following release from prison for a maximum term of three years. Sentencing hearings for each of the four defendants have been set for various dates this spring.

Outcome: As an ethics and white collar crime speaker (www.chuckgallagher.com), I often talk to groups about the Truth about Consequences. In this case, the choices made will have far reaching effects. Likely, each will face an active prison sentence along with substantial restitution. Trying to bilk the government for money that is ill gotten is just down right stupid. I know from personal experience, that the minor gains that one thinks they get from poor choices never compare to the consequences that are suffered as a result of those choices.

Your thoughts?