6 Suspects Arrested in $138M Hospice Fraud Scheme

Six medical professionals were recently arrested for their alleged involvement in a $138 million scheme that spanned three separate hospices. The suspects are accused of submitting false Medicare billing claims for patients who were not eligible to receive hospice care.

The scheme is part of a larger case in California recently announced by the U.S. Department of Justice (DOJ). The Justice Department brought charges against 15 defendants for a healthcare fraud scheme that bilked upwards of $1.8 billion from federal and private insurance programs.

The [alleged} fraudulent billing patterns were identified in part through data analytics tools and coordinated efforts between regulators and law enforcement, according to Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division 

“These charges include the largest sober home fraud scheme the [Justice] Department has ever prosecuted, and a scheme involving unnecessary invasive procedures detected through data analytics,” McDonald said in a statement. “Our message is simple: if you steal healthcare dollars from the American taxpayer or abuse your position to harm patients, we are coming for you — and the data will lead us to wherever you are.”

Eight of the suspects have been arrested, including the six hospice professionals. Two of the individuals made their first appearance in the U.S. District Court in Los Angeles, while two others are soon set to appear at the U.S. District Court in Texas.

Among the suspects is Geoffrey Jimenez, 60, who allegedly submitted fraudulent hospice billing claims through Transitions Hospice Inc. for patients who were not terminally ill. The services were often either medically unnecessary or never provided to patients, according to the DOJ report. The hospice allegedly had a high live discharge rate upwards of 85% of its patient census, more than 4x the national average.

Jimenez and marketers allegedly received illegal kickbacks in exchange for the hospice referrals. The DOJ has accused the suspects of using Medicare beneficiaries’ names and information to purchase vehicles and other items.

Other suspects include Dr. Richard Keech, 83, a medical director and physician at two of the companies involved in the case, Atlantica Management and Blue Cross Hospice. Keech is accused of falsifying medical documentation for patients who were not eligible to receive hospice, often without their knowledge or consent.

Also accused is Armani Raffi, 59, who allegedly “orchestrated a multi-entity” fraud scheme across four interconnected hospices in California, according to the DOJ report. The companies include CA Hospice Care, Golden Age Hospice & Palliative Care, Miracle Hospice & Palliative Care and St. Mary’s Hospice & Palliative Care.

Raffi allegedly used nominated owners at each of the companies, received illegal kickbacks and submitted false physician certifications for ineligible patients. The hospices “cycled” patients through multiple agencies to prolong billing in a scheme that laundered millions in Medicare reimbursement, the Justice Department stated in the report. Raffi is accused of using the funds on personal expenses, mortgage payments, cash withdrawals and transfers.

Program integrity issues have heated up in California in recent years. The state has seen swelling volumes of newly licensed hospices cropping up at rates that exceed local demand. Fraudsters have in some cases “flipped” their businesses, selling off hospices before regulatory detection. In other instances, patients were enrolled in hospice without their consent, or they received negligent or poor care.

Sustained regulatory enforcement is needed to address the mounting fraud concerns, according to Sheila Clark, president and CEO of the California Hospice and Palliative Care Association (CHAPCA).

“Scammers exploiting hospice and skilled home health are a recurring problem in California, and we cannot lose sight of that fact,” Clark told Hospice News in an email. “This pattern demands sustained action, accountability and protection for the people being exploited. California needs sustained enforcement that removes scammers, addresses the failures that allow them to operate and protects access to legitimate hospice and skilled home health services.”

The recent fraud case involves other types of healthcare violations aside from hospice. The defendants allegedly fraudulently billed more than $1.6 million in substance abuse treatments and about $134 million for medically unnecessary atherectomy procedures, which resulted in injury to patients.

The cases involved coordinated efforts by the DOJ and the IRS Criminal Investigation in Los Angeles. The hospice schemes are being investigated by the FBI and the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG).

“The magnitude of the fraud alleged in these cases reflects the extraordinary lengths bad actors will go to profit at the expense of patients,” HHS-OIG Acting Deputy Inspector General for Investigations Miranda Bennett, said in a statement. “Today’s takedown sends a clear message: no matter how complex the scheme, those who exploit patients and steal from federal healthcare programs will be identified and held accountable.”