Hospice CEO Pleads Guilty to Role in $60 Million Healthcare Fraud

https://www.dmagazine.com/healthcare-business/2021/03/hospice-ceo-pleads-guilty-to-role-in-60-million-healthcare-fraud/?fbclid=IwAR09gBH-sTQnq9Ju04w9lumt86qlodW35bA4LlD9wkO5uIB2TOBi3ot68Rc

Between 2012 and 2016, Novus and Optimum Health Services billed for fraudulent services and gave out drugs without physician input.

Several other defendants in the case have pleaded guilty and agreed to aid the prosecution in the case. Patricia Armstrong, the former nursing director, cooperated with the prosecution and revealed that some patients were given high doses of drugs to hasten their deaths. She also recruited patients that shouldn’t have been eligible for hospice, the Dallas Morning News reports

Frisco-based Novus was one of the largest hospice providers in Texas before it closed in 2015. A growing elderly population and increased prevalence of chronic illness have helped the hospice industry grow in the 30-plus years since palliative care was introduced to the healthcare market. The growth paired with the interaction with often overburdened Medicare system makes it vulnerable to fraud.. In 2018, the industry was valued at $28 billion and is expected to grow 9 percent annually moving forward. According to the Population Reference Bureau, there are expected to be 95 million Americans over 65 by 2060 from 52 million in 2018.  

“Mr. Harris scammed federal healthcare programs out of millions of dollars, and worse yet, denied vulnerable patients the medical oversight they deserved, writing pain prescriptions without physician input and allowing terminally ill patients to go unexamined,” said Acting U.S. Attorney Prerak Shah via release. “The Justice Department cannot allow unscrupulous business people to interfere with the practice of medicine. We are determined to root out healthcare fraud.”

Harris admitted that between 2012 and 2016, he billed Medicare and Medicaid for hospice services that were not provided, not directed by a medical professional, or were given to ineligible patients. Although he was an accountant by trade, Harris used blank, pre-signed prescriptions to distribute controlled substances without physician oversight. He admitted that his alleged accomplices, Dr. Mark Gibbs and Dr. Laila Hirjee certified that patients faced terminal illnesses without examining them in person and were paid $150 for every certification they signed. Hirjee, Gibbs and another physician, Dr. Charles Leach, supplied the blank signed prescriptions. 

Harris also made a deal with a company called Express Medical that allowed him to access confidential information in return for using Express Medical for laboratory services and home health visits. Harris’ wife and other Novus staff would call Express patients and recruit them for Novus hospice services, even if they were ineligible. 

When Center for Medicare and Medicaid Services suspended Novus after allegations of fraud, Harris transferred patients to a new company. Gibbs became the new company’s director, which employed the Novus staff and transferred received payments back to Novus. 

“Mr. Harris preyed upon patients and families that did not have a true understanding of Novus and hospice services. 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,” said FBI Dallas Special Agent in Charge Matthew DeSarno via release.

Harris’ sentencing hearing is August 3.