A $30 million hospice fraud scheme has unfolded in California with the arrest of a physician and a marketer. Both were associated with two Pasadena-based providers — Saint Mariam Hospice, Inc., and Arcadia Hospice Provider, Inc. — the owner of which remains at large for their involvement.

Named in a 14-count indictment were physician Victor Contreras, M.D., 66, medical industry marketer Callie Jean Black, 63, and Juanita Antenor, who owned both hospices.

Black and Contreras were detained by California law enforcement agencies for allegedly receiving kickbacks from multiple parties in exchange for Medicare beneficiary referrals and billing for medically unnecessary hospice services. Authorities believe that Antenor is currently in the Philippines, according to the U.S. Department of Justice Attorney’s Office in the Central District of California.

“If convicted of the charges in the indictment, Contreras would face a statutory maximum sentence of 50 years in prison, while Black would face up to 40 years,” the Justice Department indicated in a statement regarding the two arrests. “A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.”

Assistant U. S. Attorney Kristen A. Williams of the Major Frauds Section is prosecuting the case. The Justice Department alleges that the defendants provided fraudulent hospice certifications for patients who were not terminally ill and eligible for this care. Each of the two companies is accused of falsely billing Medicare and Medi-Cal for hospice services that in some cases were never provided.

Both hospices submitted more than $5.5 million in claims to Medi-Cal, which paid out a little more than $1.35 million combined to the companies.

Arcadia Hospice Provider submitted false claims to the tune of $23 million, according to the indictment. Meanwhile, St. Mariam Hospice submitted nearly $13.5 million in false claims. Contreras was involved in roughly $5.1 million of these, according to the Justice Department. He is charged with five counts of health care fraud in all. Antenor, the owner, is charged with six counts.

Additional charges for Antenor and Black include illegal kickbacks for health care referrals.

The FBI, the United States Department of Health and Human Services, Office of the Inspector General (OIG) and the California Department of Justice investigated this case.

The new arrests follow other recent prosecutions in California. Last month 14 people associated with New Hope Hospice, Inc. and Sterling Hospice Care, Inc. were arrested on fraud charges. Three separate California cases stirred in 2021 that involve Excel Hospice, May Light Hospice and Mhiramarc Management, LLC.

California has been coming down hard on hospice fraud and other regulatory violations.

California lawmakers during 2021 passed two hospice reform laws placing a moratorium on new licenses in the state and requiring an audit of licensing and oversight processes. Additionally, state legislators proposed a bill last month that, if enacted, would require signatures from two physicians to recertify a patient for hospice.

These actions are in part a response to two 2019 OIG reports finding that roughly 20% of hospices surveyed by regulators or accreditors between 2012 and 2016 had a condition-level deficiency that posed a serious patient safety risk. California and Texas were the states that saw the most serious deficiencies, the OIG reported.