Medicaid fraud only seldom leads to the indictment of a company executive. When John Holland, once the Senior VP of Tenet Healthcare Corporation, was indicted over a massive fraud scheme involving Medicare, Georgia Medicaid, and South Carolina Medicaid, there was much reason for anti-fraud activists to feel hopeful.
Holland allegedly participated in a kickback scheme to secure referrals to hospitals within Tenet´s large network of facilities. The indictment is especially significant because Tenet has already paid about one billion dollars over various allegations of Medicaid fraud among other types of alleged misconduct.
Alleged Kickback Scheme & False Compliance Reports Basis for Indictment
The 60-year-old Mr. Holland once acted as CEO of North Fulton Regional Hospital, later transferring to his last position as a VP Tenet Healthcare. North Fulton was one of the hospitals involved in the alleged kickback scheme. According to the allegations, the misconduct took place between 2007 and 2013, while Holland was in charge of a Tenet billing center in Boca Raton, which received Medicaid payments for $127 million, for services rendered at Tenet hospitals in Georgia and South Carolina.
The indictment also refers to Holland´s alleged participation in submitting false compliance reports to the government in connection with the company’s 2006 $900 million settlement over inflated Medicare charges. Considering the scope of the charges against Holland, and following an agreement between the defense and the DOJ, he was released on a $3 million bail.
Kickbacks for Referrals of Illegal Immigrants in Georgia and South Carolina
The former executive faces the possibility of a lengthy stay in prison, and he may also stand to lose two pieces of residential real estate in Texas and Utah. The indictment clearly signals Holland as one of the main orchestrators of a large-scale conspiracy to defraud Medicaid in Georgia and South Carolina, by offering bribes and kickbacks to obtain referrals from “Clinica de la Mama.” The facility offers medical services to pregnant women who are illegal immigrants.
Tenet settled with the DOJ in 2016 over the kickback scheme, but it seems the government is looking to deter fraudsters by going not only after companies, but also after individuals who are responsible for Medicaid fraud.
The text of the indictment states that,
“To justify the outlay of significant monies to Clinica and to conceal the true nature and extent of Tenet Hospitals’ unlawful relationship with Clinica, John Holland and his co-conspirators created and caused to be created pretextual contracts between the Tenet Hospitals and Clinica… Under these pretextual contracts, the Tenet Hospitals purported to pay Clinica to provide various purported services to the Tenet Hospitals,” which were often “not rendered at all… [Holland and his co-conspirators] falsified Tenet’s books, records, and reports and made and caused to be made materially false, fraudulent and misleading representations and omissions to the government.”
Indictment of Individuals Like Holland new Trend in Medicaid Fraud Enforcement
Like in many other U.S. states, Medicaid fraud is rampant in Georgia and South Carolina. Healthcare fraud scandals have resulted in billions of dollars worth of settlements over the years. But the indictment of individual executives will likely deter prospective fraudsters, as they see that their careers might be over if they decide to participate in healthcare fraud.
Delinquent corporations can change management and market their services to display a public image of compliance, but the possibility of putting executives like Holland in jail sends a much more powerful message.
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