Florida healthcare network accused of $1bn fraud

In the largest case of healthcare fraud ever brought by the US justice department, federal prosecutors on Friday charged three people at a network of Florida nursing and assisted-living facilities for their suspected role in a scheme to defraud Medicare and Medicaid of more than $1 billion (€911m).

Prosecutors charged that Philip Esformes (47) of Miami, who owns 30 nursing homes and assisted-living facilities in the area, created a fraudulent network built on billing Medicare for performing lucrative procedures that were not needed. He also was charged with laundering proceeds and paying kickbacks to area healthcare providers. Over a period of 14 years, Mr Esformes' facilities would take in Medicare and Medicaid recipients who did not actually qualify for skilled nursing or assisted-living facilities, then bill the government programmes for their care, prosecutors charged.

The scheme resulted in what George L Piro, the special agent in charge of the FBI office in Miami, called "staggering losses in excess of $1 billion". The losses were the largest ever seen in a healthcare fraud prosecution, justice department officials said, and represent the most significant in a string of hundreds of Medicare fraud cases totaling $10 billion in the last decade.

“Medicare fraud has infected every facet of our healthcare system,” said Wifredo A Ferrer, the US attorney in Miami, which has been the centre of the boom in Medicare fraud.

Mr Esformes was charged with healthcare fraud, paying and receiving kickbacks, obstruction of justice and other crimes.

Also indicted in the case were two other people in the Miami area: Arnaldo Carmouze (56), a physician assistant who worked with Esformes; and Odette Barcha (56), a healthcare consultant accused of taking kickbacks.

New York Times