Fake Psychotherapy Clinic and Medicare Fraud; Prison

The 53-year-old owner of two Flint, Michigan, adult day care centers was sentenced for his leadership role in a $3.2 million Medicare fraud scheme. He was sentenced to serve 96 months in prison. In addition to his prison term, he was sentenced to serve three years of supervised release and was ordered to pay $988,529 in restitution.


On October 18, 2013, the owner and a co-defendant were found guilty by a federal jury for their roles in organizing and directing a psychotherapy fraud scheme through New Century Adult Day Program Services LLC and New Century Adult Day Treatment Inc. (together, New Century). The owner was convicted of one count of conspiracy to commit health care fraud and seven counts of health care fraud, and the co-defendant was convicted of one count of conspiracy to commit health care fraud.


Evidence presented at trial showed that from 2009 through 2012, New Century operated as an adult day care center that billed Medicare for psychotherapy services. New Century brought in mentally disabled residents of Flint-area adult foster care (AFC) homes, as well as people seeking narcotic drugs, and used their names to bill Medicare for psychotherapy that was not provided. The defendant and his co-conspirators lured drug seekers to New Century with the promise that they could see a doctor there who would prescribe the narcotics they wanted if they signed up for the psychotherapy program. New Century used the signatures and Medicare information of these drug seekers and AFC residents to claim that it was providing them psychotherapy, when in fact it was not.


The evidence also showed that the owner directed New Century employees to fabricate patient records to give the false impression that psychotherapy was being provided. He also instructed New Century clients to pre-sign sign-in sheets for months at a time for dates they were not there, and used these signatures to claim to Medicare that these clients had been provided services. The evidence at trial showed that in a little more than two years, New Century submitted approximately $3.28 million in claims to Medicare for psychotherapy that was not provided. Medicare paid New Century $988,529 on these claims.


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See also Medical Law Perspectives, January 2014 Report: Prescription Painkillers: Risks for Patients, Pharmacists, and Physicians