Novus Hospice CEO Sentenced to 13+ Years for Healthcare Fraud

The CEO of a local hospice agency has been sentenced to 13 years and 3 months in federal prison for defrauding Medicare and Medicaid, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Bradley J. Harris, the 39-year-old former head of Novus and Optimum Health Services, pleaded guilty last March to conspiracy to commit healthcare fraud and healthcare fraud. He was sentenced today by Chief U.S. District Judge Barbara M.G. Lynn, who ordered him to pay $27,594,875.52 in restitution.

“This defendant systematically lied to federal healthcare programs, dolling out powerful pain medication without the physician oversight that Novus’ patients deserved,” said U.S. Attorney Chad Meacham. “Brad Harris allowed greed to corrupt his judgement, and he will pay dearly for it. The Northern District of Texas will not tolerate healthcare fraud.”

“Mr. Harris’ actions to steal tens of millions of dollars through fraudulent practices will now be answered by both a substantial sentence and restitution. More importantly, today’s sentence is another step in pursuit of justice for the patients and families that were deceived by Novus’ offerings and hospice services,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “We are proud to continue our work with our state and federal partners to hold those who commit health care fraud accountable, and to seek justice for patients that are harmed in furtherance of fraud schemes.” According to his plea papers, Mr. Harris admitted that from 2012 to 2016, he billed Medicare and Medicaid for hospice services that were not provided, that were not directed by a medical professional, or that were provided to patients who were not actually eligible for hospice care.  He further admitted that he used blank, pre-signed controlled substance prescriptions to doll out potent drugs without physician input.

Mr. Harris admitted that two of his coconspirators, Dr. Mark Gibbs and Dr. Laila Hirjee, frequently certified that that his hospice patients faced terminal illnesses without actually examining with the patients in person, as required by Medicare. (A “terminal” patient is one with a life expectancy of six months or less, according to the Department of Health & Human Services.)

The doctors were paid around $150 for each false order they signed.

Mr. Harris also admitted that Dr. Gibbs, Dr. Hirjee, and another physician, Dr. Charles Leach, left him blank controlled substance prescriptions, sometimes a whole pad at a time. This allowed Mr. Harris, an accountant by trade, to “prescribe” Schedule II controlled substances to hospice beneficiaries without the guidance of a medical professional.

In plea papers, Mr. Harris admitted that in summer 2014, he realized he could avoid exceeding Medicare’s aggregate hospice cap by enrolling an influx of first-time hospice patients. So, he negotiated an agreement with a company called Express Medical that allowed him to access potential patient’s confidential medical information in return for using Express Medical for laboratory services and home health visits. His wife and other Novus staff then called on individuals that had at some point been patients of Express Medical to recruit them for Novus hospice services, regardless of whether they were eligible to receive benefits.

When the Center for Medicare & Medicaid Services suspended Novus based upon credible allegations of fraud, Mr. Harris and simply transferred patients from Novus to a new company, “Company A.”  Dr. Gibbs became a medical director for the “new” hospice company, which used Novus staff and transferred hospice reimbursements back to Novus, Mr. Harris admitted.  

Ten of Mr. Harris’ codefendants, including Dr. Leach, also pleaded guilty. Three more, including Dr. Gibbs and Dr. Hirjee, were found guilty at trial. Dr. Gibbs was sentenced to 13 years in federal prison and ordered to pay $27,978,903 in restitution; Dr. Hirjee was sentenced to  10 years in federal prison and ordered her to pay $16,253,281 in restitution; and Dr. Leach was sentenced to more than five years in federal prison and ordered to pay $10,077,709 in restitution.

The Federal Bureau of Investigation’s Dallas Field Office, the U.S. Department of Health & Human Services Office of Inspector General (HHS-OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit conducted the investigation. Assistant U.S. Attorneys Donna Strittmatter Max and Marty Basu prosecuted the case with Assistant U.S. Attorneys Stephen Gilstrap, Gail Hayworth, and Brian McKay.