The head of more than 30 assisted-living facilities in Florida has been charged for defrauding Medicare and Medicaid of more than $1 billion over the last 14 years — the largest case of health care fraud ever handled by the U.S. Department of Justice.
According to the DOJ’s findings, Esformes Network facilities owner Philip Esformes allegedly placed around 14,000 elderly people in nursing homes and assisted-living facilities, even if they didn’t meet the criteria to enroll. Many of these unqualified patients then received “medically unnecessary services” that staff billed to Medicare and Medicaid. In some cases, prosecutors claimed, Esformes and his “co-conspirators” plied elderly patients with narcotics to force an addiction that would prolong their stay and continue their reliance on Medicare costs.
The fraud didn’t stop outside of Esformes’ facilities. He and other top-level staffers allegedly received financial kickbacks for referring patients to other health care providers in the nearby communities who also forced unnecessary medical treatment on patients to receive federal dollars. These kickbacks were often paid in cash and disguised as charitable donations — and allegedly went toward Esformes’ personal purchases.
“Medicare fraud has infected every facet of our health care system,” said U.S. Attorney Ferrer in a DOJ press release. “As a result of our unrelenting efforts to combat these pernicious schemes, [we will] continue to identify and prosecute the criminals who, driven by greed, steal from a program meant for our aged and infirmed to increase their personal wealth.”
Esformes’ lawyer said he “strongly asserts his innocence” in the case, but his history in smaller courts for similar cases of health care fraud have left the DOJ with little sympathy. The DOJ said Esformes will be held without bail based on his current wealth and criminal history — two factors that make him much more likely to flee the country.
This record-breaking case was brought by the DOJ’s Medicare Fraud Strike Force, which was created in 2007. Cracking down on health care fraud has played a major role in the Obama administration’s effort to reduce wasteful health care costs; several provisions in the Affordable Care Act allocated more funds toward this effort and strengthened penalties for fraud.
The DOJ has recovered nearly $16.5 billion in health care fraud since January 2009 — making almost $8 in financial returns for every dollar spent on fraud investigations. Just last month, the DOJ announced a massive health care fraud sweep charging 301 individuals across 36 federal districts for their role in $900 million in fraudulent medical billing.