Deeper Than the Headlines: Massive Conspiracy Finds Thousands in Illegal Kickbacks

A 70-year old Louisiana physician pleaded guilty on April 10 to conspiracy to pay and receive illegal healthcare kickbacks. He’ll be sentenced later this year in July and faces a maximum term of imprisonment of five years, a $250,000 fine, and three years of supervised release following imprisonment.

The physician, Jobie Crear, M.D., operated Comprehensive Nursing and Home Health Service, Inc. ("Comprehensive”) and designed and implemented a scheme to pay various individuals to be patient recruiters to his home health services. According to court documents, the government was prepared to present evidence and witnesses that would have established the scheme.

Included in the plan, two non-employed individuals posed as owners of Comprehensive. Crear wanted to hide that he was the actual owner of Comprehensive because as the physician owner and operator of an ophthalmology practice, he could not make referrals to Comprehensive under Medicare regulation if he was the owner of Comprehensive.

In reality, the two individuals who posed as owners of Comprehensive were actually an operator/owner of a lawn service while the other individual worked at Walmart. Employees of Comprehensive would testify that Crear was the actual owner of Comprehensive and that these employees took all their orders from Crear.

One of the employees of Comprehensive was prepared to testify that Comprehensive routinely paid non-employee recruiters and Comprehensive employees, including nurses and maintenance staff, kickbacks for referring Medicare beneficiaries for home health services. Kickback checks to recruiters who were not Comprehensive employees usually had the words "patient education," "patient instruction," and often the patient's name in the memo line of the checks. The employee would testify that these phrases were code words for referral fees to the recruiters.

A different employee who had been an administrator for Comprehensive was prepared to testify that at a Comprehensive staff meeting Crear explained how he would offer incentives for office staff if they brought patients to Comprehensive. Employees had to identify the patient to Crear when they sought payment for an individual referral fee. This former administrator would testify about a specific recruiter to whom Crear directed the administrator to write Comprehensive Check No. 5531. The memo line had the word "referrals."

The total amount of kickbacks paid to various recruiters over the approximately 6-year period was over $230,000 which resulted in inappropriate Medicare reimbursements to Comprehensive of over $810,000. In addition to the guilty plea, court documents show that Crear is already interested in beginning restitution payments for the $810,000 even before sentencing.

As a part of the plea agreement, Crear also agreed to cooperate with investigators moving forward. This seems consistent with the themes and principles outlined in the Yates’ memo which we have blogged about previously as well as discussed in prior Healthicity webinars.

Specifically, the document stated, “this plea agreement is predicated upon the fact that the defendant agrees to submit to interviews whenever and wherever requested by law enforcement authorities. The defendant understands he must be completely truthful. The defendant also agrees to appear before any Grand Jury or trial jury and to testify truthfully. The defendant agrees neither to implicate anyone falsely nor to exculpate or protect anyone falsely."

It will be interesting to watch for any further enforcement actions that arise from this situation. This example drives home the point and importance for compliance programs to monitor and audit financial relationships, to “follow the money” so to speak and to look beyond what they see on paper.

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