Fake Physical Therapy and Occupational Therapy Files Result in $23.2M Medicare Fraud

Non-licensed physical and occupational therapists paid Medicare beneficiaries for fraudulent use of patient Medicare numbers at a Detroit-area clinic, according to the findings of a federal jury yesterday. Bernice Brown and Daniel Smorynski were convicted of conspiracy and multiple counts of health care fraud for fraudulently billing the Medicare and Medicaid systems in excess of $23 million. According to a press release issued by DoJ:

“Evidence at trial established that Brown purchased fake physical and occupational therapy files from certain third-party contractors, and she and Smorynski billed the services reflected in the files to Medicare as if [their company’s] therapists had provided the services. Brown instructed her staff to create false documents and to add those documents to medical files to make it appear that [her] therapists, who were licensed in the state and enrolled with Medicare, had performed the services, when she knew they had not.”

Most sophisticated physical therapy frauds involve situations where therapy is actually provided but it is either contraindicated or overbilled (for example, where group therapy is billed as individual therapy or where therapy is provided by unlicensed lay people). Here, the fraud was so bold that “the therapy was completely fictitious,” in the words of DoJ. “For their part, WCT therapists never saw the patients, and did not supervise any of the therapy, but signed documentation in the files to make it appear that they did.”

Additionally, in a slightly more nuanced — but no less bold — fraud, Brown and Smorynski, submitted “fraudulent claims for psychotherapy services.” Pursuant to a Congressional mandate in 2006, a cap on physical and occupational therapy services limited the amount Medicare reimbursement available. Rather than abide by the cap, Brown and Smorynski began a massive lobbying and letter campaign to have the cap repealed and billed the time spent on such efforts to Medicare as fraudulent “psychotherapy services.” Potentially, the pair could spend the rest of their lives in prison for their crimes as each healthcare fraud count is punishable by up to 10 years in prison.

To report physical therapy fraud, contact Frohsin & Barger.