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Texas doctor charged in $375 million Medicare scam

A Texas doctor and five owners of home health-care agencies were arrested Tuesday on charges that they fraudulently billed Medicare and Medicaid nearly $375 million in what authorities described as the largest case of its kind.

The doctor, Jacques Roy, 54, of Rockwall, was charged with masterminding a Medicare fraud conspiracy over the past six years. The alleged fraud involved classifying as homebound 11,000 patients recruited by a network of more than 500 agencies, then billing Medicare for services and home visits that were either not medically necessary or were not provided, according to the indictment, filed in the Northern District of Texas.

Roy’s alleged scheme resulted in more than $350 million being fraudulently billed to Medicare and more than $24 million to Medicaid. The indictment called it the largest home health-care fraud ever committed and the biggest health-care fraud case brought against a single doctor.

“Dr. Roy and his co-conspirators for years ran a well-oiled fraudulent enterprise . . . making millions by recruiting thousands of patients for unnecessary services and billing Medicare for those services,” said Lanny Breuer, assistant attorney general for the Justice Department’s criminal division.

Tuesday’s indictment marks the latest in a series of federal Medicare fraud cases, which have become a centerpiece of the Obama administration’s push to bring down health-care costs. In 2011, health-care-fraud prevention and enforcement efforts recovered nearly $4.1 billion that had been stolen or improperly taken from federal programs, the highest annual amount ever recovered, according to a recent report by the Departments of Justice and Health and Human Services.

“We are demonstrating to those who would commit health-care fraud that it won’t be worth it,” said Deputy Attorney General James Cole. “If you do this, we will track you down and prosecute you.”

Investigators from the Department of Health and Human Services targeted Roy after analyzing Medicare billing data and finding a disproportionate number of home health claims for which he was the certifying physician.

Between January 2006 and November 2011, authorities say, Roy and his company, Medistat Group Associates, created a fraudulent “cottage industry” in the Dallas-Fort Worth area that brought in millions of dollars, according to court records. Roy certified more Medicare beneficiaries for home health services and had more purported patients than any other medical practice in the country.

“Using sophisticated data analysis, we can now target suspicious billing spikes,” said Health and Human Services Inspector General Daniel R. Levinson. The analysis found that in 2010, Roy “certified” more than 5,000 patients for home health care; 99 percent of physicians certified no more than 104 people for such care, Levinson said.

As part of his business, Roy allegedly maintained a “485 Department,” named after the number on the Medicare form on which the care plans were documented. He instructed his employees to complete the 485s by signing his name by hand or using his electronic signature. In what prosecutors called a “boiler room,” employees worked all day placing his signature on approvals for home health services, according to the indictment.

When investigators searched Roy’s home, they found evidence of overseas bank accounts and fake identification cards. Also in his house were the books “Hide Your Assets and Disappear: A Step-by-Step Guide to Vanishing Without a Trace,” and “The Offshore Money Manual,” suggesting 23 worldwide locations favorable to offshore banking, according to court records. The documents also show that Roy owns a sailboat named “One Trick Pony.”

Roy, a native of Canada, is charged with one count of conspiracy to commit health-care fraud and nine counts of substantive health-care fraud. If convicted, he could be sentenced to a maximum of life in prison.

Along with the indictment, the Centers for Medicare and Medicaid Services announced the suspension of payments to an additional 78 home health agencies associated with Roy, based on credible allegations of fraud against them. Roy’s office manager was also charged.

Owners of the agencies working with Roy would recruit people so Medistat could bill unnecessary home visits and medical services, the indictment said. They would go door to door in neighborhoods to recruit patients.

The home health agencies not only allegedly took advantage of the elderly, they preyed on the disadvantaged, authorities say. One of the agency owners who was charged, Charity Eleda, 51, of Rowlett, Tex., allegedly sent recruiters to the Bridge homeless shelter in Dallas, paying them $50 for each person they signed up.

“This case and our new detection tools are examples of our growing ability to stop Medicare fraud,” said Deputy Health and Human Services Secretary Bill Corr.

Staff researcher Julie Tate contributed to this report.

Sari Horwitz covers the Justice Department and criminal justice issues nationwide for The Washington Post, where she has been a reporter for 30 years.

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