Michigan Physical Therapist and Home Health Agency Owner Pleads Guilty to Role in Medicare Fraud Scheme

WASHINGTON—A greater Detroit-area physical therapist who was also an owner of a home health agency pleaded guilty yesterday to his role in a $22 million home health care fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley, III of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh, III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office, and Special Agent in Charge Erick Martinez of Internal Revenue Service Criminal Investigation made the announcement.

Hemal Bhagat, 32, of Troy, Michigan, pleaded guilty on August 14, 2013, before U.S. District Judge Bernard A. Friedman in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, scheduled for November 12, 2013, Bhagat faces a maximum penalty of 10 years in prison and a $250,000 fine.

According to information contained in plea documents, Bhagat admitted that from approximately May 2009 through October 2011, he conspired with others to commit health care fraud through billing Medicare for home health care services that were not actually rendered and/or not medically necessary. A licensed physical therapist, Bhagat began working in June 2009 for Troy-based Prestige Home Health Services Inc., a home health agency owned by alleged co-conspirators. In approximately August 2009, he and other co-conspirators became owners of Royal Home Health Care Inc., a home health agency also located in Troy.

Bhagat admitted that his co-conspirators at Prestige and Royal paid kickbacks to patient recruiters to obtain the information of Medicare beneficiaries, which the co-conspirators then used to bill Medicare for services that were not provided to these beneficiaries and/or were not medically necessary. He and his co-conspirators then created fictitious therapy files appearing to document physical therapy services provided to Medicare beneficiaries, when in fact no such services had been provided and/or were not medically necessary. Bhagat’s role in creating the fictitious therapy files was to sign documents—including physical therapy evaluations, supervisory patient visits, and patient discharge forms—indicating that he and others had provided physical therapy services to particular Medicare beneficiaries, when in fact they had not. Bhagat admitted to knowing that the documents he falsified would be used to support false claims to Medicare by his co-conspirators at Prestige and Royal. He submitted or caused the submission of claims to Medicare for services that were not medically necessary and/or not provided, which in turn caused Medicare to pay approximately $4,767,359.03.

This case was investigated by the FBI, HHS-OIG, and IRS-Criminal Investigation and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Trial Attorney Niall M. O’Donnell, Deputy Chief Charles E. Duross, and Trial Attorney James McDonald of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.