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DOJ Breaks Up $200M Miami Medicare Fraud Scheme

John Commins, for HealthLeaders Media, October 22, 2010

Two Miami-based mental healthcare companies, their four owners and senior managers were indicted Thursday for allegedly billing Medicare for $200 million in bogus mental health services, the Departments of Justice, and Health and Human Services say.

A 13-count indictment unsealed Thursday in U.S. District Court in Miami charges American Therapeutic Corp., and Medlink Professional Management Group Inc., Lawrence S. Duran, Marianella Valera, Judith Negron, and Margarita Acevedo (aka Margarita De La Cruz) with counts that include healthcare fraud, conspiracy to commit healthcare fraud, and related illegal healthcare kickbacks counts.

"Since the Strike Force began operation, we have rarely seen anything like the illegal conduct charged in this indictment, both in terms of the nature and size of the scheme," says Assistant Attorney General Lanny A. Breuer of DOJ's Criminal Division.

 The defendants were arrested Thursday in Miami. Federal agents conducted search warrants at six ATC and Medlink locations in South Florida.

In a related civil action, a temporary restraining order froze the assets of Duran, Valera, Negron, Acevedo, ATC and Medlink.

HealthLeaders Media attempted to contact the defendants Thursday afternoon. No one answered the telephone at ATC, and a recorded voice said the Medlink number had been disconnected.

According to criminal and civil documents, the defendants allegedly submitted false claims to Medicare for medically unnecessary or non-existent mental health services administered at ATC facilities. ATC operated purported partial hospitalization programs—- which provide intensive treatment for mental illness—in seven Florida locations from Homestead to Orlando.

Prosecutors allege that Duran, Valera, Acevedo and ATC paid kickbacks to operators of assisted living facilities and halfway houses in exchange for delivering patients from their facilities to ATC. The indictments allege that in many instances the patients got part of the kickbacks. ATC allegedly billed Medicare for services purportedly provided to these recruited patients. The indictment alleges that the services were not medically necessary or were not provided at all.

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