The Justice Department is continuing to use criminal enforcement as an important tool in the fight against healthcare fraud.  While the False Claims Act continues its important place in the fight against healthcare fraud, DOJ has used the criminal laws to prosecute players in significant fraud cases. 

Five Individuals and Two Nursing Facilities, Pittsubrugh, PA: Five individuals and two for-profit skilled nursing facilities were indicted on charges of conspiracy to defraud and related healthcare fraud charges in Pittsburgh, PA.  The fifteen count superseding indictment named: (1) Sam Halper, age 39, of Miami Beach, Fla.; (2) Eva Hamilton, age 35, of Beaver, Pa.; (3) Susan Gilbert, age 61, of Lawrence, Pa.; (4) Michelle Romeo, age 46, of Hillsville, Pa., and (5) Johnna Haller, 41, of Monaca, Pa.  In addition, two skilled nursing facilities were indicted: Comprehensive Healthcare Management Services, LLC d/b/a Brighton Rehabilitation and Wellness Center and Mt. Lebanon Operations, LLC d/b/a Mt. Lebanon Rehabilitation and Wellness Center.

Halper, the CEO and part-owner of the SNFs, and the co-conspirators are charged with two fraud schemes.

First, management at the nursing facilities created false staffing records that were submitted to the Pennsylvania Department of Health during mandated surveys; and second, Halper and two regional directors, Romeo and Haller, made false statements in resident assessments (Minimum Data Set assessments), which were submitted to  the government to determine Medicare and Medicaid reimbursement rates.

Staffing records are submitted to confirm that the facilities are in compliance with conditions of participation in Medicare and Medicaid. The defendants added names of nursing staff who were not in the building on the specific dates included in the report.  These false submissions were submitted to misrepresent compliance with requirements that “sufficient staffing” is maintained at the facilities. 

With respect to the federally-mandated surveys, Susan Gilbert and co-conspirators directed administrative and management staff to “clock-in” for shifts not actually worked. They created false timecards to submit to the Pennsylvania government that falsely represented that employees were providing direct resident care, when in fact they were not present in the building.

Eight individuals from Crestar Labs LLC, Nashville, Tennessee, were charged in a superseding indictment in Nashville, Tennessee with multiple counts of Medicare and Medicaid fraud conspiracy.

Fadel Alshalabi, 54, of Waxhaw, North Carolina, was originally charged in July 2021, with conspiracy and violation of the Anti-Kickback Statute for his role in orchestrating a fraudulent Medicare and Medicaid billing scheme related to genetic testing.  Alshalabi is the owner and Chief Executive Officer of a series of laboratories based in Spring Hill, Tennessee, called Crestar Labs, LLC (Crestar). 

The second superseding indictment charges Alshalabi and seven others with health care fraud, conspiracy to commit health care fraud, and conspiracy to violate and violations of the Anti-Kickback Statute.  Alshalabi is also charged with money laundering. 

The second superseding indictment charges that the co-conspirators entered into sham contracts and paid kickbacks to physicians and healthcare providers in exchange for genetic testing and urine analysis samples.  The scheme targeted and recruited elderly patients who were Medicare beneficiaries in order to increase the number of genetic tests. 

Marketing representatives (who were not health care professionals) obtained swabs from the mouths of the patients at nursing homes, senior health fairs, and elsewhere. The tests were then purportedly approved by telemedicine doctors who did not engage in the treatment of the patients, and often did not even speak with the patients for whom they ordered tests.  Frequently, the patients or their treating physicians never received the results of the tests.  Alshalabi and the co-conspirators paid illegal kickbacks and bribes in exchange for the doctor’s orders and tests, without regard to medical necessity.   During the period of 2016 to July 2021, Alshalabi and his co-conspirators billed Medicare and Medicaid over $150 million.