Conspiracy
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CHICAGO – Three Filipino-American nurses, two of them part owners of a home health care agency in suburban Lincolnwood, Illinois, were among five persons indicted last Aug. 9 for allegedly taking part in a conspiracy to pay and receive kickbacks in exchange for the referral of Medicare patients for home health care services.

The irregularity reportedly defrauded Medicare of some $5 million.

According to Assistant US Attorney Randall Samborn, public information officer of the U.S. Attorney’s Office for the Northern Illinois District, indicted were Marilyn Maravilla and Junjee L. Arroyo, both part owners of Goodwill Home Healthcare, Inc.; Ferdinand Echavia, a licensed nurse, who referred patients to Goodwill; and Jean Holloway and Rakeshkumar Shah, who both marketed Goodwill’s services to Medicare patients.

The defendants were alleged to have conspired in paying and receiving approximately $400,000 in kickbacks to themselves, nurses, marketers and others for referral and retention of Medicare patients that enabled Goodwill to bill Medicare approximately $5 million.

The 29-count indictment was returned by a federal grand jury last Thursday and unsealed on Friday following the arrest of Holloway, 41, of Bellwood, and Shah, 46, of Des Plaines. Holloway and Shah were released on bond after pleading not guilty in U.S. District Court of Northern Illinois in Chicago.

Maravilla, 55, of Chicago; Arroyo, 44, of Elmhurst; and Echavia, 39, also of Chicago, are all licensed nurses. Together with Goodwill as corporate defendant, they were arraigned last Aug. 22 in the U.S. District Court.

All defendants were charged with one count of conspiracy to pay and receive illegal kickbacks for Medicare patient referrals. Each defendant was also charged with the following number of counts of violation of the anti-kickback statute: Goodwill, 16 counts; Maravilla, 15 counts; Arroyo, 16 counts; Echavia, five counts; Holloway, three counts; and Shah, eight counts.

After  two months of working as a nurse at Goodwill in August 2008, Maravilla became an owner and administrator of the agency. Arroyo was also an owner and Goodwill director.

The indictment was reported by Gary S. Shapiro, acting United States attorney for the Northern District of Illinois; Lamont Pugh III, special agent-in-charge of the Chicago Region of the U.S. Department of Health and Human Services, Office of Inspector General; and Robert D. Grant, special agent-in-charge of the Chicago Office of the Federal Bureau of Investigation.

“Paying kickbacks to refer Medicare patients is illegal. Money cannot be permitted to be the basis of a medical referral over medical necessity or quality of service,” Pugh said. The investigation is continuing, the official said.

Between August 2008 and July 2010, the indictment alleges that Maravilla, Arroyo and two other individuals — one an officer and an owner of Goodwill, and the other a certified public accountant and Goodwill’s bookkeeper — paid and caused Goodwill to pay kickbacks to nurses, marketers and other home health care workers who referred patients to Goodwill; assisted in re-certifying patients as homebound; or caused patients to begin new 60-day care cycles of home health care with Goodwill.

By offering kickbacks, Maravilla, Arroyo and others sought to increase Goodwill’s patient census and to enrich themselves and Goodwill. In two years, Goodwill obtained referrals of approximately 900 cycles of home health care, including new patients and the re-certification of existing patients for additional 60-day cycles of care.

According to the indictment, the amount of the kickback payments varied, but generally ranged from approximately $400 to $700 for each new care cycle, and approximately $100 to $300 for each re-certification. The payments were intended to induce nurses, marketers and others in the home health industry into referring patients to Goodwill for services to be reimbursed by Medicare.

In January 2009, Maravilla and Arroyo allegedly created and circulated to Goodwill employees and affiliates a memo on Goodwill’s letterhead that set forth a structure for kickbacks relating to patient re-certifications, disguising the illegal payments as “bonuses.” The memo provided that a $100 “bonus” would be given to nurses who re-certified a patient for a third cycle, and a $200 “bonus” would be given to a nurse who re-admitted a discharged patient a month after the discharge date.

In order to make certain kickback payments in cash, Maravilla and Arroyo obtained Goodwill checks payable to them and recorded on Goodwill’s books as “loans,” but they allegedly cashed the checks and used the funds to pay kickbacks to marketers.

The indictment likewise alleges that Maravilla, Arroyo and Goodwill’s bookkeeper paid Echavia cash kickbacks totaling some $28,000, and also paid kickbacks totaling some $56,000 to a company owned and controlled by Echavia.

Maravilla and Arroyo allegedly caused Goodwill to pay some $10,400 in kickbacks to Holloway, and kickbacks totaling some $21,500 to Shah. In addition, the two owners caused Goodwill to pay some $20,000 in kickbacks to two other marketers who were not charged.

The indictment also alleges that Maravilla and Arroyo caused Goodwill to pay at least $58,000 in kickbacks to at least three other nurses who were affiliated with Goodwill and who were not charged.

In addition to receiving salary and profits from Goodwill, Maravilla and Arroyo allegedly caused the agency to also pay kickbacks to themselves. Maravilla allegedly received some $138,000 in kickbacks for patient referrals, and Arroyo allegedly received some $44,000 in kickbacks for patients that either he or his wife referred to Goodwill.

Conspiracy and each count of violation of the anti-kickback statute carry a maximum penalty of five years in prison and a $250,000 fine.