Doctors and nurses made visit after visit to the elderly man’s home, even after watching him walk the dog, take a stroll down the street and repeatedly talk about visiting his grandkids.
Yet the home visits were classified as treatment for the homebound, enabling a Chicago-based health care company to bill Medicare for thousands of dollars.
The 71-year-old man, it turns out, was an undercover confidential source for federal agents who for months worked to gather evidence of alleged phony billing practices at Home Physician Services.
On the strength of those recordings, combined with interviews from former and current employees, CEO Henry Smilie was arrested Thursday on a charge he billed Medicare up to $1.2 million in fraudulent or nonexistent services to the elderly and homebound.
Federal agents executed search warrants at the company’s offices in Chicago and Schaumburg, according to a federal criminal complaint unsealed after his arrest.
One former employee told federal agents that if documented services provided to patients did not meet the minimum threshold required to receive Medicare payments, Smilie told him he should just “make it up,” according to the charges.
The undercover operative secretly recorded visits from doctors with Home Physician Services in which he explained to them how he visited friends outside of his home, according to the complaint. He could also be seen on video recordings walking outside and tending to his dogs during the visits, authorities said.
Yet the company certified him as homebound in bills submitted to Medicare and continued house calls to him, according to the charges.
In one recorded conversation, an employee of another of the home health companies affiliated with Home Physician Services cautioned the man to be careful about what he said about his activities.
“When the doctor and the nurse come and put you in the program … between me and you, do not say that you occasionally drive,” the employee said. “All right? ’Cuz if not, they will not approve you. All right?”
“OK,” the undercover source said. “Do not say what?”
“Do not say that you occasionally drive. … Because if not, Medicare laws
— they will not approve you. All right?”
Former employees described how the company billed Medicare for services not fully performed, or for unnecessary services, according to the criminal complaint. One ex-employee said Home Physician Services directed staff to bill Medicare for the maximum amount, even if the services provided did not justify such a cost.
That same employee also told agents he saw Smilie rubber stamp physicians’ signatures to create orders. When the man told Smilie that practice may be illegal, Smilie laughed and said some of the company’s other practices also were against the law, according to the complaint.
Another former employee said the company performed swabs of each patient, whether or not it was medically necessary, then charged $1,000 to Medicare for each test, according to the complaint.
One doctor involved in the case told federal agents he knew some of the patients he saw were not homebound, but he continued to see them out of concern for their health. At one point he told agents that less than half of the patients he saw at Home Physician Services were truly confined to the home.
Smilie, 54, of Lake Zurich, was released on bond after making an initial appearance in federal court.
The charges against Smilie stem from an investigation of the federal Medicare Fraud Strike Force, which began operating in Chicago in February 2011.
The Medicare fraud count carries a maximum penalty of 10 years in prison, a $250,000 fine and mandatory restitution.