MIAMI — Federal authorities charged the nation's largest chain of community mental health centers Thursday with Medicare fraud, alleging the Miami-based company preyed on patients with severe dementia to bill $200 million for services it never delivered.
Prosecutors allege that American Therapeutic Corp. and its sister companies faked medication and care charts and paid the owners of assisted living facilities and halfway houses to bring patients to their seven mental health centers in south and central Florida for therapy sessions that were never held.
Some patients also cashed in on the scheme by providing their Medicare numbers, while others were "not coherent enough" to demand kickbacks, according to the investigation by the departments of Justice and Health and Human Services.
The alleged scam is "unlike anything we've seen before in terms of the nature and size of the scheme," said Assistant Attorney General Lanny Breuer.
Federal authorities arrested four of the company's owners and top managers Thursday and served search warrants at several of the centers.
Repeated telephone calls to American Therapeutic went unanswered Thursday.
The grand jury indictment alleges that the company routinely billed Medicare for therapy and other services for patients suffering from Alzheimer's and severe dementia even though they weren't eligible because their mental capacity was so impaired they couldn't benefit from therapy.
Employees met regularly for "charting parties" where they falsified medical charts to make it look like patients had a mental illness and needed medication and therapy to be stabilized, Breuer said. Authorities are still investigating whether the company actually withheld medication from patients or just doctored the charts.
Marianella Valera, one of American Therapeutic's owners, manipulated records so patients would have to stay longer at the facility racking up a higher bill for Medicare, the indictment says.
Officials said the indictment culminates a months-long investigation into the latest Medicare service to be targeted by scammers — mental health care.
They say crooks have moved from medical equipment and HIV infusion scams to home health care services as federal authorities have cracked down on the problem, which costs an estimated $60 billion to $90 billion a year. Miami has long been the epicenter of Medicare fraud, responsible for roughly $3 billion a year.
Authorities started investigating the company after an employee contacted them.