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Medicare fraud trial against American Therapeutic underway

Seven defendants, mostly medical professionals, are standing trial for what federal prosecutors claim was a scheme to put patients in group therapy who could not benefit from the treatment in order to bill Medicare. The trial, which began on April 11, is another prong in the Justice Department's aggressive prosecution of employees of American Therapeutic Corp., a Miami-based chain of mental health clinics.

Previously, those defendants who have been found guilty or reached a plea deal with prosecutors tended to be on American Therapeutic's business side. The current trial includes the company's medical directors. During opening statements, defense attorneys said that the alleged Medicare fraud was conducted by the business people, and that medical staff was not involved.

As we have discussed in previous blog posts -- most recently on Jan. 25 -- government investigators claim that American Therapeutic found patients at assisted-living facilities and halfway houses in South Florida and brought them to one of its clinics. They diagnosed the patients with mental illnesses such as depression, bipolar disorder or schizophrenia, despite little evidence they actually suffered from those illnesses, according to prosecutors.

The patients were placed in group therapy, though some of them had dementia or Alzheimer's disease and would not likely be able to benefit from the treatment, the government says. American Therapeutic sent Medicare a total of $205 million in bills between 2003 and 2010, and received $83 million from the agency for the group therapy sessions, prosecutors said.

The doctors' attorneys told the jury that both men worked part-time at various American Therapeutic clinics and were not part of the company's fraud scheme. They noted that the prosecution was planning to call as witnesses former executives who have pleaded guilty and may be cooperating with the government.

Source: Miami Herald, "Major Medicare fraud trial starts in Miami federal court," Jay Weaver, April 11, 2012

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