Is Chicago the Home of Health Care Fraud?

Chicago is the home of many things: deep dish pizza, hot dogs, great sports, greater people. And it’s nicknamed the “windy city!”

But more recently, Chicago is becoming the new home of health care fraud.

Home health care is a massively growing industry in the U.S. as a direct result of our aging population and lack of health care providers. Mistakes can be found in almost every aspect of business, but in this field, it can be exceptionally costly. Not only do those mistakes cost money, but they can also lead to a loss of license for the health care providers. Sometimes, the combination of poor judgment and intentional acts may be rewarded with possible jail time.

In total, the home health industry raked in 18.4 billion dollars nationwide. The Chicago region alone took in about $900 million. Even with federal authorities cracking down, fraud continues to be rampant. Dozens of physicians, offices, and hospitals have been charged over the years, and the state and federal indictments keep coming.

How is Fraud Being Committed?

Well, in many cases, doctors will receive kickbacks for prescriptions or referrals given. Sometimes, the Medicaid-reimbursed home care agencies will pay a referral fee to acquire a new patient or client. The Stark anti-kickback rules are constantly violated. And a recent study flagged 37 home health providers and 257 physicians in the Chicago area for having suspicious Medicare claims. Densely populated suburban areas, including Joliet, Aurora, and Bolingbrook IL have generated quite a few new cases in the last two years alone.

 Illinois has already begun its mandate of prepayment claims review. The U.S. Department of Justice is applying more resources in order to prosecute acts constituting Medicaid fraud. Even the IRS is investigating and auditing those agencies that consistently and intentionally attempt to enjoy the income without being fully accountable for the related tax. And federal tax liens are commonly filed against the businesses…and their owners!

The crackdowns will continue to increase, and so will the prosecutions. So, to all care agency owners, be diligent in your processes, documentation, and be sure to follow all needed protocols to avoid any federal or state legal issues.

By: Shavonne Taylor and Jeffrey Anton Collins. Ms. Taylor is a Law Case Manager and blogger at Tax Law Offices. Mr. Collins is a Tax Defense Attorney, formerly with the IRS. Call an IRS tax attorney you can trust and contact us today.