6 Ohioans indicted for $48 million health care fraud conspiracy

6 Ohioans indicted for $48 million health care fraud conspiracy
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CLEVELAND, OH (WOIO) - Six people from Ohio were indicted in federal court for their roles in a health care fraud conspiracy at two drug and alcohol rehabilitation centers in the state.

According to the U.S. Attorney for the Northern District of Ohio, “Medicaid was billed $48 million for drug and alcohol recovery services that were not provided, not medically necessary, lacked proper documentation, or had other issues that made them ineligible for reimbursement.”

The U.S. District Court in Cleveland revealed the following people were involved in the 60-count indictment:

  • 44-year-old Thomas Bailey of Poland
  • 29-year-old Kortney L. Gherardi of Girard
  • 50-year-old Lisa M. Pertee of Sunbury
  • 40-year-old Jennifer M. Sheridan of Austintown
  • 38-year-old Ryan P. Sheridan of Leetonia
  • 54-year-old Arthur H. Smith of Austintown

All six are charged with conspiracy to commit heath care fraud in connection with working at Braking Point Recovery Center, according to the U.S. Attorney for the Northern District of Ohio.

The indictment describes Braking Point as a drug and alcohol rehabilitation facility operation in Austintown and Whitehall that provided detox, intensive outpatient treatment, day treatment, and residential living rehabilitation.

Records show some the other 54-counts include:

  • conspiracy to distribute controlled substances
  • health care fraud
  • money laundering
  • operating a drug premises
  • use of registration number issued to another to obtain controlled substances

The indictment said Ryan Sheridan was the sole owner of Braking Point Recovery Center, as well as owner and operator of several other businesses, including Breaking Point Health and Fitness LLC and Braking Point Recovery Housing LLC, which owned recovery houses (also known as “sober houses”) for individuals attempting to maintain abstinence from drugs and alcohol.

Sheridan agreed to follow the rules and regulations of the Ohio Medicaid Program and Ohio Department of Mental Health and Addiction Services as a certified provider, according to the indictment.

The indictment also said:

"Between January 2015 and October 18, 2017, various defendants submitted or caused to be submitted billings to Medicaid for drug and alcohol services that were: coded to reflect a service more costly than was actually provided; without proper documentation; without proper assessment documents containing valid diagnosis; billings for patients whose records did not contain diagnosis by a physician; related to treatment at unlicensed inpatient beds; billings related to Bailey dispensing of Suboxone even though Bailey did not have the authority to do so; for case management services when, in fact, the clients were working out at Sheridan’s gym; billings based on quotas provided to the nurses by the defendants to bill four to five hours of treatment daily, even if the services were not medically necessary; billing for in-patient detox and drug treatment services that were, in fact, provided in an out-patient setting, among other violations.

Braking Point submitted approximately 134,744 claims to Medicaid for more than $48.5 million in services it claimed to provide between May 2015 and October 2017. The claims caused Medicaid to pay Braking Point more than $31 million. Medicaid suspended payments to Braking Point on October 18, 2017.

The Sheridans, Gherardi, Bailey and Smith are also accused of conspiring to develop a standard protocol of distributing the same amount of Suboxone to every patient seeking drug treatment immediately upon entering Braking Point’s detox program without being evaluated by a properly licensed physician to determine the medical necessity for the use of Suboxone.

The Sheridans, Gherardi and Bailey used Smith’s DEA data waiver license to dispense more than 3,000 doses of Suboxone in 2017 alone without Smith having seen the patients. Smith held himself out to be Braking Point’s medical director but only went to Braking Point approximately twice a month.

Ryan Sheridan is also accused of making numerous financial transactions involving money derived from unlawful activities, including health care fraud and conspiracy to commit health care fraud.

Prosecutors are also seeking for forfeit property and proceeds obtained as a result of these crimes, including nearly $3 million, property in Columbiana, Mahoning and Trumbull counties, and eight automobiles, including replicas of vehicles used in the movies ‘Back to the Future,' ‘Ghostbusters’ and ‘Batman.’

If convicted the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal records, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum."

The U.S. Department of Health and Human Services – Office of Inspector General, the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigations, the Drug Enforcement Administration and the Ohio Attorney General’s Medicare Fraud and Corruption Unit investigated the case.

The indictment lists Assistant U.S. Attorneys Mark Bennett and Maritsa Flaherty and Special Assistant U.S. Attorney Jonathan Metzler as the prosecutors.

Multiple officials shared their thoughts on the case.

U.S. Attorney Justin Herdman said:

“These defendants are accused of stealing tens of millions of dollars from taxpayers through fraudulent billing and other crimes. Treatment for people struggling with drug and alcohol addiction is vitally important, but these defendants profited off the suffering of others. We will hold accountable anyone who tries to illegally take advantage of the drug epidemic.”

U.S. Department of Health & Human Services Office of Inspector General of the Chicago Region Lamont Pugh III said:

“Individuals who are recovering from opioid and alcohol abuse that seek assistance need to have the utmost confidence and trust in those who are providing their care. That trust and confidence was violated by these defendant’s in order to pursue their own financial gain and waste vital taxpayer dollars. The OIG will continue to work with our federal, state and local partners to ensure that those who commit criminal acts to unjustly enrich themselves are held accountable.”

According to FBI Special Agent in Charge Eric B. Smith:

“While patients from the community were receiving treatment for their addictions, these individuals were allegedly engaged in fraudulent billing and other financial schemes to bilk taxpayers out of millions of dollars. The FBI will continue to work with our law enforcement partners and healthcare industry to identify those illegally cheating the system for the benefit of their own pockets.”

Special Agent in Charge of IRS-Criminal Investigation in Cincinnati Field Office Ryan Korner said:

“The conduct detailed in this indictment is egregious and exposed these defendants for who they really are, thieves. They defrauded the health care system for their own personal gain. IRS-CI is committed to collaboratively working to unravel complex fraud and money laundering schemes and ensuring those responsible are deprived of the fruits of these crimes.”

According to DEA Special Agent in Charge Timothy J. Plancon:

“While the vast majority of the healthcare professionals in this country are committed to saving lives, there are a few who are merely drug dealers hiding in plain view, and driven by greed. These arrests reiterate the Drug Enforcement Administration’s commitment to making our communities safer from illicit drugs, diverted pharmaceuticals, and fraud.”

Ohio Attorney General Dave Yost said:

“These scams are a sucker punch in the face to every family with loved ones struggling with addiction. We will work with our partners to achieve justice — and get our money back.”

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