All too often, we read about healthcare fraud that is perpetrated by practitioners and providers. This case, however, puts the spotlight on fraud within the government agency that is tasked with regulating and protecting CMS funds and granting licenses to new facilities. 

Healthcare Fraud by a State Employee

On Friday, December 15th, 2017, a former employee of Florida’s Agency for Health Care Administration (AHCA) was sentenced to 57 months in prison for accepting bribes in exchange for providing confidential information about healthcare facilities that received Medicare and Medicaid funds.

AHCA’s Division of Health Quality Assurance is responsible for the licensure and regulation of healthcare facilities in Florida that receive Medicare and Medicaid funds, including skilled nursing facilities, assisted living facilities, and home health agencies. After a 30 year career with AHCA, Bertha Blanco of Miami, Florida, was sentenced in federal court to almost 5 years in prison for her role in accepting bribes and was ordered to pay $441,000 in restitution as well as to forfeit $100,000 in gross proceeds.

From 2007-2015 she solicited and received thousands of dollars of cash bribes from Miami area owners of long-term care facilities, as well as intermediaries that worked with them, in exchange for providing the purchasers with sensitive, non-public AHCA reports and information related to their facilities.  

According to the U.S. Dept. of Justice Press Release, “The information included the schedules of future unannounced inspections by AHCA surveyors and previously undisclosed patient complaints filed with AHCA. Blanco knew that the information she provided in exchange for bribes could ultimately be used to fabricate and falsify medical paperwork and to temporarily remedy deficiencies so that AHCA would not discover lapses in patient care and revoke the licenses of the facilities that had received the information.”

Philip Esformes Accused in Largest Medicare Fraud Case

Philip Esformes
Photo: Chicago Tribune

Miami Beach executive Philip Esformes was named as one of the culprits responsible for sending bribes to Blanco in a case that could amount to a $1 billion scheme involving multiple long-term care networks and facilities. Esformes, a very recognizable figure in the community, has been accused of many bribes and illegal activity in what is considered the largest Medicare fraud case put together.

It is alleged that Esformes used the information to fix the complaints and problems before state workers could inspect his sites. As a result, Esformes avoided the revocation of his licenses and continued to bill Medicare for questionable patient services. Esformes has been denied bond and awaits his trial in March 2018 at a Federal Detention Center in Miami.

UPDATE: Nursing home mogul Philip Esformes sentenced to 20 years for $1.3 billion Medicaid fraud (Source: Chicago Tribune)


The scope of these alleged crimes has tremendous negative implications in regards to the integrity of long-term care facilities’ ability to inform the public of the quality of care provided. While Florida remains a popular location for post-acute care, transparency and accountability are essential in assessing network and facility standards of performance. Blanco’s actions could also impact a variety of closely monitored CMS metrics such as the star rating system. Deficiency information is also utilized by consumers when selecting skilled nursing facilities.

Skilled Nursing Facilities (SNF) Survey Process

The survey process for skilled nursing facilities plays a key role in providing information to consumers when they are researching nursing homes. In particular, the CMS Nursing Home Compare website utilizes three sources to construct their rating system; one of which is the data maintained in the CMS health inspection database. The Centers for Medicare & Medicaid Services developed Nursing Home Compare and the Five Star Quality Rating System to provide consumers with an easy way to search for nursing homes that provide the quality of care they desire. All of the data found on Nursing Home Compare is provided as a service to the public.

According to CMS the Nursing Home Compare website, “Nursing Home Compare allows you to find and compare nursing homes certified by Medicare and Medicaid. This website contains the quality of resident care and staffing information for more than 15,000 nursing homes around the country.”

Specifically, CMS creates a health inspection score which is published on the Nursing Home Compare site. This score utilizes data from the three most recent health inspections and is based on three years of complaint and facility reported incident inspections. All of these inspections/surveys are intended to be unannounced. This rating is called a “star rating”. The highest star rating is a 5 and the lowest a 1. Note that the top 10% of nursing homes with the lowest health inspection score in each state get a health inspection rating of 5 stars.

Sharing inspection dates or information regarding complaints that were filed could definitely impact the overall inspection outcomes and the integrity of the star rating.

Summary

This case represents the coordination of enforcement by the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and the Department of Health and Human Services. Each team focuses on preventing and deterring fraud while enforcing current anti-fraud laws, even involving government employees.

According to the DOJ, “Each Medicare Fraud Strike Force team brings the investigative and analytical resources of the FBI, HHS-OIG and other law enforcement agencies, as well as the prosecutorial resources of the Criminal Division’s Fraud Section and the local United States Attorney’s Offices (USAOs), to analyze data obtained from CMS and bring cases in federal district court.”

It is good to know that investigators and prosecutors are working hard to defeat healthcare fraud in these “hot spot” areas throughout the country, even when this is happening inside government walls. The trust that CMS puts in each state to administer the federal healthcare dollars appropriately, fairly and legally is simply not something that can be taken for granted. Fraud is fraud, and those who think they can get away with it are wrong. So the old adage of “No good deed goes unpunished, should be, “All bad deeds get punished.”


ProviderTrust Healthcare License Monitoring Essential Guide

Written by Michael Rosen, ESQ

ProviderTrust Co-Founder, mrosen@providertrust.com

Michael brings over 20 years of experience founding and leading risk mitigation businesses, receiving numerous accolades such as Inc Magazine’s Inc 500 Award and Nashville Chamber of Commerce Small Business of the Year.

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