Medicare fraud bust in Illinois leads to 6 and ½ year sentence

The Illinois Department of Financial and Professional Responsibility investigates cases that can lead to discipline.

The biggest problem facing Medicare fraud might be the arrogance of people who get away with bad acts for too long. Meanwhile, with the cooperation of law enforcement agencies using technology and skill, fraud schemes are frequently shut down and bad actors are prosecuted. In some cases, someone on the inside is the whistleblower who notifies authorities. In this case, the nurses who challenged fraudulent behavior were treated poorly and terminated. Several former employees filed whistleblower lawsuits leading to the investigation, arrest and prosecutions in this major Medicare fraud case.

The $90 million Medicare fraud scheme

In this case, Seth Gillman, Chicago businessman and mastermind of this fraud scheme exploited terminally ill patients in Illinois in the $20 million Medicare fraud. Gillman was convicted and sentenced to 6 ½ years in federal prison.

The Chicago Tribune reports, “By paying kickbacks to nursing homes and giving bonuses to employees who took part in the fraud, Gillman built his Passages Hospice LLC into the largest such company in Illinois, serving terminally ill patients in 89 countries and billing Medicare more than $90 million from 2008-2012, government records show.[i]

Unfortunately, Passages Hospice did not provide the care consistent with what Medicare paid in claims submitted for patient services. Meanwhile, Gillman lived a lavish lifestyle, excessive even for a licensed attorney and nursing home administrator. To the U.S. District Court Judge, Gillman stated, “I betrayed the trust of Medicare and I besmirched the integrity of hospice all together…I was stupid and I was wrong.[ii]

Investigation and discovery of Medicare fraud schemes

Why would anyone want to be the whistleblower? When an individual with “clean hands” contacts and works with the investigation of Medicare fraud schemes, they may be removing themselves from the eye of the investigators. Since many of the common Medicare fraud schemes are complex, there are multiple people involved. Therefore, investigators might be looking at everyone involved in a healthcare operation, when there is a suggestion of wrongdoing. It may be easier to report the fraud than be accused of being a part of it or helping with a cover-up.

Another reason people report fraud is they may be able to recover a percentage of fines assessed and paid in connection with the Medicare fraud prosecution.  This is called Qui Tam and our article on point explains the process. See Dr. Whistleblower: Reporting $10 million in a Medicare billing fraud scheme, could share in recovery.

If you or another suspect there may be wrongdoing occurring in a health-related practice or care facility, it is a good idea to talk to a health law and litigation lawyer to figure out where you may stand in the event there is a current or pending investigation. You might also be a proper person to file a whistleblower lawsuit. You might also be an individual responsible for others below you who you believe may be engaged in wrongdoing. Likewise, it is imperative to secure experienced legal counsel.

About us: Michael V. Favia & Associates, P.C. is a health law and litigation firm in Chicago representing individuals, healthcare professionals and organizations with civil legal matters as well as professional licensing and regulation.

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[i] Chicago Tribune, Hospice CEO gets 6 ½ years for fraud scheme, by David Jackson and Gary Marx, Mar. 7, 2017.

[ii] See HNi above.