Novus Hospice CEO Pleads Guilty to Fraud Scheme

Bradley Harris, former head of Texas-based Novus and Optimum Health Services, is facing up to 14 years in federal prison for his role in defrauding Medicare and Medicaid out of tens of millions in falsified health care claims. The hospice agency’s CEO recently pled guilty for his involvement and is currently awaiting a sentencing hearing set for Aug. 3 before Chief U.S. District Judge Barbara M.G. Lynn.

Acting U.S. Attorney for the Northern District of Texas Prerak Shah recently announced that 39-year-old Harris scammed federal health care programs to the tune of millions, denying terminally-ill patients medical oversight, clinical care and even writing pain prescriptions without physician input. The Justice Department did not provide the total dollar amount.

“The Justice Department cannot allow unscrupulous business people to interfere with the practice of medicine,” said Shah in a statement. “We are determined to root out health care fraud.”

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The U.S. Department of Human Services Office of the Inspector General and the U.S. Department of Justice in recent years have increasingly scrutinized hospice providers for compliance with anti-fraud measures. Many organizations have come under legal and regulatory attention related to medical necessity complaints under the False Claims Act. In instances like those involving Texas-based Merida Health Group, investigators found that Novus representatives lied to patients and families about their health status, indicating death was imminent when it was not.

According to his plea papers, Harris admitted to personal responsibility for falsified Medicare and Medicaid hospice services from 2012 to 2016 that were not provided to eligible patients, or that were provided to those not eligible for the hospice benefit. Harris also admitted to using blank, pre-signed controlled substance prescriptions to issue potent pain medications without physician input.

Totalling millions in a fraud scheme involving at least 10 other co-conspirators, the FBI’s Dallas field office investigated the crimes in collaboration with the U.S. Department of Health & Human Services Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant U.S. Attorneys Donna Strittmatter Max, Marty Basu and Chad Meacham are prosecuting the case.

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“In addition to causing fraudulent billing for tens of millions of dollars, Mr. Harris preyed upon patients and families that did not have a true understanding of Novus and hospice services,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “The core of the company was rooted in deception, and the lack of physician oversight allowed Mr. Harris to make medical decisions for his own financial benefit.”

Harris admitted to knowingly exceeding the Medicare aggregate hospice cap in 2014 by enrolling an influx of patients, negotiating an agreement with Express Medical Supply that allowed the former CEO to access confidential patient medical information in exchange for using the company’s laboratory services and home health visits. Harris’ wife and other Novus staff contacted individuals with this information to bring them on as hospice patients, regardless of whether they were eligible to receive the benefit or needed end-of-life care.

Ten of the fraud scheme’s co-conspirators have already pleaded guilty, with four more slated for trial on April 5. Charles Raymond Leach, M.D., was among those that pled guilty. He admitted in 2018 to one count of conspiracy to commit health care fraud for his role in a $60 million portion of the scheme, according to a Becker’s Hospital Review report.

Leach was one of 16 defendants charged in the case prior to Novus Hospice’s close late in 2015. Novus was suspended by the U.S. Center for Medicare & Medicaid Services (CMS) based on credible allegations. At that time, Harris transferred Novus patients to a fake hospice company, or “Company A” according to the announcement, naming Mark Gibbs, M.D., medical director and using Novus staff in patient care. Through the company, Harris admitted to transferring hospice reimbursements back to Novus.

Leach, Gibbs and Liala Hirjee, M.D., were named as physicians who left Harris blank prescription notepads, enabling him to “prescribe” schedule II controlled substances to hospice beneficiaries without the guidance of a medical professional.

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