Detroit Area Home Health Recruiter Sentenced in Medicare Fraud Case

According to a news release issued by the Department of Justice on May 14, 2014, a patient recruiter for a number of home health agencies in the metro Detroit area was sentenced to serve 86 months in prison for his role in a $14.5 million dollar fraud scheme.

According to the DOJ, the evidence presented at trial showed that Richard Shannon paid Medicare beneficiaries to sign blank documents for physical therapy services that were either not provided or not medically necessary.  The blank pre-signed forms were then used to create fake medical records.

The press release also stated that Mr. Shannon recruited beneficiaries from housing projects and soup kitchens in Detroit in exchange for cash and promises of prescription narcotics from co-conspirator physicians.

This case should serve as a reminder to home health agencies to analyze relationships with patient recruiters or marketers.  Agreements with marketers should be in compliance with the Anti-kickback statute safe harbors, i.e., the personal services safe harbor or the bona fide employee safe harbor, and payments should never reward marketers or recruiters based on the volume or value of patient referrals.  Agreements with recruiters or marketers should also address the expectation that the marketer or recruiter will not violate the laws related to prohibition on offering beneficiary inducements for Medicare or Medicaid services.

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