Three Brooklyn Physical Therapy Clinic Employees Plead Guilty in a $3.4 Million Health Care Fraud Scheme

On June 23, 2011, the Departments of Justice and Health and Human Services announced that, under the aegis of the inter-agency Health Care Fraud Prevention and Enforcement Action Team (HEAT) program, three employees of the Solstice Wellness Center, a Brooklyn-area clinic that purported to specialize in providing physical therapy and diagnostic tests, have pleaded guilty to one count of conspiracy to commit health care fraud, in connection with a $3.4 million Medicare fraud scheme. The Solstice employees currently are awaiting sentencing and are facing a maximum sentence of 10 years in prison.

According to the court documents, the three employees were involved in a scheme to pay cash kickbacks to Medicare beneficiaries to induce the beneficiaries to visit Solstice. The beneficiaries were transported to and from Solstice purportedly to receive physicians’ services, physical therapy and diagnostic tests. During the plea hearing, the Solstice employees admitted that they paid kickbacks to the beneficiaries so that Medicare could be billed for services and diagnostic tests, notwithstanding the fact that such services were not medically necessary.

The case was brought in connection with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. Since the HEAT Strike Force’s inception in March 2007, operations in nine locations have charged more than 1,000 defendants who, collectively, have falsely billed the Medicare program for more than $2.3 billion. The action against Solstice evidences that HEAT enforcement shows no signs of relenting.

For more information on health care fraud and abuse enforcement and how to avoid becoming a target, please contact Abby Pendleton, Esq., Adrienne Dresevic, Esq., Carey F. Kalmowitz, Esq., Esq. or Robert S. Iwrey, Esq. at (212) 734-0128 or (248) 996-8510 or visit the HLP website.