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Inmate Charged with Running Medicaid Scam Inside Prison

By John Commins  
   July 13, 2017

Alexis C. Norman is already serving an eight-year prison sentence after pleading guilty in 2015 to one count of Medicaid fraud in connection with a false billing scheme.

A Texas inmate serving time for Medicaid fraud tried to bilk the healthcare program out of an additional $810,000 from inside the prison walls, federal prosecutors allege.

Alexis C. Norman, 46, of Midlothian, TX, was indicted this week on felony charges stemming from a healthcare fraud conspiracy that she allegedly ran from prison, according to the U.S. Attorneys' Office for the Northern District of Texas. Norman will make her initial appearance in federal court on Friday.

Norman is already serving an eight-year prison sentence after pleading guilty in 2015 to one count of healthcare fraud in connection with a false billing scheme she ran using two companies she owned: Greater Southwest Group, Inc. and Ellis County Community Services.

According to the new indictment, Norman ran a similar scheme while she was awaiting sentencing in her earlier case, and continued to direct it after she was imprisoned. The indictment alleges that Norman, who is not licensed as a mental health provider, operated two counseling companies, Janus Children Services, Inc. and Therapeutic Outreach Services.

As part of the scheme, Norman and an unnamed coconspirator -- who presumably was not in prison -- applied for and obtained group Medicaid provider numbers for Janus and Therapeutic. They obtained individual Medicaid provider numbers of licensed mental health professionals by soliciting applications for bogus job opportunities on Craigslist but not hiring the individuals who applied. Norman and her coconspirators used the provider numbers, together with the names, dates of birth, social security numbers, and Medicaid numbers of approximately 156 Medicaid clients—mostly minor children—to submit fake claims for services. Norman and the coconspirator opened a bank account and leased office space in Tyler, TX for Janus and opened a bank account and leased office space in Waco, TX, for Therapeutic to conceal the fraud from inspectors in the Dallas-Fort Worth area who investigated her prior fraud.

To conceal the scheme, Norman gave false testimony at her sentencing hearing on April 8, 2016, when she responded “No, sir.” to the question, “Have you ever submitted any claims to Medicaid or a Medicaid managed care organization under a business other than Greater Southwest Group or Ellis County Community Services?” In fact, Norman had submitted numerous false claims to Medicaid under Janus, including $1,575 in claims she submitted on April 7, 2016 – the day before her sentencing hearing, the indictment stated.

Norman now faces one count of conspiracy to commit healthcare fraud, four counts of healthcare fraud, and four counts of aggravated identity theft. The indictment also includes a forfeiture allegation that would require the defendant, upon conviction, to forfeit to the U.S. any property traceable to the crime. If convicted, each fraud count carries up to 10 years in prison and a $250,000 fine. The aggravated identity theft counts carry a mandatory statutory penalty of two years in federal prison and a $250,000 fine.

In her earlier scam, Norman used the identities of licensed counselors and Medicaid clients without their knowledge to submit claims to Medicaid for psychotherapy services that were not provided. In addition to the prison time, Norman was ordered to pay nearly $3 million in restitution to Medicaid.

John Commins is a senior editor at HealthLeaders.

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