The name might be different but the corruption is the same for HealthSouth/Encompass.
Last week, the Department of Justice announced that it had reached an agreement with Encompass — which was used to be named HealthSouth before it changed its name to shirk off the stink of massive fraud under former CEO Richard Scrushy — to settle three lawsuits brought by whistleblowers who alleged massive Medicare/Medicaid fraud.
The final bill: $48 million.
Encompass CEO Mark Tarr, of course, called this all a money saving move, proclaimed that the company did nothing wrong and chastised the federal government for a prolonged investigation that ultimately revealed no wrongdoing.
I suppose that argument works for all of the people who won’t bother to check on the origin of this case and the three lawsuits which brought it about. Because those whistleblower lawsuits weren’t filed by rubes who thought something might be amiss.
They were filed by two doctors working in Encompass facilities in Sarasota, Fla., and Richmond, Va., and the director of therapy operations at an Encompass facility in Arlington, Tx.
And the three tell remarkably similar stories of how HealthSouth/Encompass executives pressured them and other employees to break the law, violate Medicare/Medicaid rules, lie about patients’ diagnoses and fabricate patient charts.
These practices, the three estimated, cost taxpayers hundreds of millions of dollars in bogus fees paid out to HealthSouth/Encompass facilities over the span of a few years.
And if you think this alleged fraud was carried out simply through sly accounting tricks, oh no. There were some of those, but the majority of the fraud spanned from the obvious to the downright comically obvious.
For example, in his complaint, Dr. Emese Simon, who was a contract physician at the Encompass facility in Sarasota, said he witnessed such things as the kitchen staff at the facility providing group therapy sessions — for which Encompass billed Medicare the full cost of “individual therapy sessions.”
Simon also described in detail how patients who clearly failed to meet the basic admission standards were admitted anyway. In one case, a man paralyzed from the waist down due to an inoperable cancerous tumor on his spine was admitted for therapy for his lower extremities that he obviously couldn’t participate in.
At any given time, Simon said in his complaint, more than two-thirds of the patients in the Sarasota facility didn’t meet the standards for care under Medicare guidelines.
But we paid out $1,000 per day per patient for them. A conservative estimate during the years Simon worked for the facility: $84 million.
That was one facility.
In Richmond, where Dr. Darius Clarke was the medical director at an Encompass Facility, the higher-ups within the company had to get more involved, according to Clarke’s lawsuit, because the director refused to go along with their schemes.
That left HealthSouth/Encompass execs seeking “second opinions” in order to admit patients who failed to meet Medicare standards.
Clarke said he witnessed HealthSouth/Encompass execs exert pressure on staff and others to admit patients and to also keep patients in the facilities for longer than necessary, often overriding his and other doctors’ recommendations.
The goal was twofold for Encompass executives — they obviously enjoyed raking in $1,000 per patient per day, but by falsifying the reasons for admissions, as was claimed in the lawsuits, they also maintained a desired rating as an inpatient rehabilitation facility within Medicare. Such a qualification meant they could charge top dollar for their services.
This, of course, is where the true fraud in Medicare/Medicaid disbursements is. It would take a thousand fake-claim individuals working a lifetime to rack up a few million in improper payouts. But one company at just a few of its facilities — that we know about — can haul in millions of dollars per week.
All of it paid for by the American taxpayer. All of it feeding the bottom line and a bloated stock price.
And even when they get caught, they just fork over $48 million — about half of the alleged fraud that occurred at ONE facility — change the name and move right along.
Only one thing remains constant, it seems: The corruption.
Will Mike Hubbard ever go to jail? Yes. And likely soon.
Mike Hubbard is likely going to prison within the next couple of months.
Hubbard, the former Alabama House speaker, had his conviction on 11 felony ethics counts partially upheld last week by the Alabama Supreme Court. The justices overturned five of the charges and sent them back to the Alabama Criminal Court of Appeals for review, but upheld six of his charges.
And those six matter a lot.
Under the original sentence imposed by Lee County Circuit Court Judge Jacob Walker, Hubbard was set to serve four years in prison and eight years of probation. That sentence was structured in a manner that all but assured that Hubbard would serve that time unless the entire verdict against him was overturned.
It wasn’t. And a source familiar with the ALSC’s opinion in the case told APR that the justices were fully aware that their opinion would not lessen Hubbard’s jail time.
That ALSC opinion puts an end to Hubbard’s appeals bond that has allowed him to remain a free man as his case worked its way through the appeals process over the past four years.
According to the Lee County Circuit Court clerk’s office, once a final determination is made by the ALSC on charges that result in a sentence, that opinion is the final piece supporting the need for an appeals bond.
Basically, there are no additional avenues for appeal that could possibly result in Hubbard not serving his prison sentence, so the bond has to be revoked and Hubbard sent to prison.
Once Walker receives the certificate of judgment from the ALSC showing it upheld the counts that related to Hubbard’s sentence, that should prompt Walker to revoke the bond and Hubbard will be notified that he is expected to begin his prison term.
According to Scott Mitchell, the clerk of the Alabama Court of Criminal Appeals, that certificate of judgment can’t be issued by the ALSC until at least 14 days have passed. That span allows both the prosecution and defense time to submit requests for rehearings on ALSC’s opinion. Should either side do so, consideration of those requests by ALSC could add more time.
“It’s really hard to say (how long it might take) — it’s such a case-by-case thing,” Mitchell said. “It could be anywhere from weeks to a couple of months before we get it.”
It is also not uncommon for one side or the other to ask for an extension of time to file their requests for a rehearing, which would add additional time.
However, once that certificate is sent out by the ALSC, it should trigger Walker to revoke the appeals bond.
The Criminal Appeals Court will also have to review Hubbard’s case and issue a new decision that considers the ALSC’s opinion on the six reversed counts. That process is likely to take much longer.
“Again, a lot of factors play into that and it’s hard to determine how long any one case might take,” Mitchell said. “I’d say you’re looking at a few months at least.”
It will only add to the extraordinary length of this case.
Hubbard was convicted in June 2016 on 12 felony counts for using his office for personal gain and directing public business to his clients. Court testimony and evidence revealed Hubbard was making more than $600,000 per year in “consulting” contracts, mostly for work in areas in which he held no prior work experience.
Since his conviction, a team of attorneys working for him — and financed by his campaign funds and various other entities — have challenged every word of his conviction, accusing the prosecution of misdeeds and attacking the state’s ethics laws — which Hubbard helped write — as overly broad and vague.
Those appeals have been successful in getting half of the charges knocked down. But because Hubbard’s prison sentence was tied to only a couple of the specific charges, those decisions will not lessen his jail time.
Opinion | Deception, subtlety and the wholesale destruction of current ethics laws mark proposed rewrite
Legislation proposed by Rep. Mike Ball, R-Madison, would radically alter the existing State Ethics Act rendering it useless as an effective tool to regulate the behavior of public officials, much less prosecute a rouge lawmaker.
Testifying at a pre-trial hearing in the criminal case against then-Speaker of the House Mike Hubbard in April 2015, Ball said the ethics laws needed amending to avoid prosecutions like Hubbard’s in the future.
If HB179 becomes law, Ball will have fulfilled the words he spoke at the Lee County Court House, where Hubbard was tried and convicted.
As House Ethics Committee Chair, Ball has sought to change the State’s Act since Hubbard was indicted.
Ball’s bill is subtly written from an enforcement and trial perspective to neuter the law.
Words are added, deleted, and meanings changed in ways that might look harmless but actually open the door for the kind of corruption Republicans vowed to change in 2010, when they passed the toughness in the nation’s ethics laws.
Beyond changes that would allow for general corruption to go unpunished, Ball’s legislation would strip the Attorney General and district attorneys of their power to prosecute anyone who violates the ethics laws without first securing approval from the State Ethics Commission.
All prosecution of any public official would first have to be approved by the Ethics Commission, a group that has repeatedly shown that it bends its decisions according to the prevailing political winds.
HB179 reads in part, “This bill would prohibit the Attorney General or a district attorney from presenting a suspected ethics violation by an individual subject to the code of ethics, other than a member or employee of the commission, to a grand jury without a referral by the commission.”
In other words, Ball would have a politically-appointed commission decide if law-enforcement agencies can seek indictments against wrongdoers.
Neither the Attorney General or a county district attorney can even impanel a grand jury in an ethics probe without the commission first finding probable cause.
Some of Ball’s alterations come in the form of removing whole sections of the law under the guise of redefining words, like “a thing of value” or “widely attended event.”
An example of how Ball’s legislation plays with the law is under the section of code, which defines a family member of a public official. Currently, a family member is “[t]he spouse, a dependent, an adult child and his or her spouse, a parent, a spouse’s parents, a sibling and his or her spouse, of the public official.” Ball changes it so it only includes a spouse and a dependent. That means that a public official may act to enrich his adult children, a parent, an in-law a brother, or a sister. These small but destructive alterations to the law are at the heart of Ball’s legislation.
Some loopholes are so extensive that a sitting legislator could be paid by a city or county governmental economic development entity and still seat in the Legislature voting on bills that might directly affect his consulting client.
Out-of-state junkets make a comeback as do several other goodies lawmakers have been desiring.
It seems Republicans want to cash in on the rewards of office like Democrats did once upon a time.
One thing is clear, Ball didn’t write the bill, but whoever did knew precisely what they were doing and were probably paid handsomely for their efforts.
There are so many cunningly deceptive changes to the ethics laws in Ball’s bill as to make it impossible to catch them all without days of intense study—and perhaps a team of lawyers.
Ball, one of Hubbard’s most an ardent defenders has said Hubbard’s indictment and conviction was a political witch hunt. He has said he wants to rewrite the ethics laws to save future Hubbards; it now looks as if he has.
Former state senator challenges Poarch Creek legal status
Former state Sen. Gerald Dial raised questions at a Tuesday press conference over the legal status of the Poarch Band of Creek Indians, distributing letters from high ranking officials in the Department of the Interior who question the tribe’s history and its legal rights to operate casinos.
In one letter, written by then-Interior Department solicitor David Bernhardt, Bernhardt flatly questions the Poarch Creeks’ history as a tribe and states that: “… the record simply does not support the Band’s existence as a separate tribal entity with a government relationship with the United States.” That letter also determines that the tribe should not have authority to operate a casino on lands in Montgomery, where PCI currently operates a casino.
“What if they’re not really legal?” Dial asked during his press conference. “Would this not be the biggest scam on Alabama?”
It is unclear what weight the letters, which were written between 2009 and 2011, currently hold, since statute-of-limitations considerations would certainly come into play. Dial tied the revelations in the letters to a recent issue with a Florida tribe, which was forced to repay around $1 billion in back taxes. It’s also unclear how the two cases are similar.
What is almost certainly an issue for PCI, given the opinions expressed in the letters from Bernhardt, who is now the Interior Department secretary, is future gaming expansion for the tribe within the state. Any expansion without a compact for the Poarch Creeks would require the Interior Department and Bureau of Indian Affairs to approve trust lands. Such approval appears highly unlikely.
APR has reached out to the Interior Department for more information but has not yet received a response.
At the press conference, Dial questioned why the Poarch Creeks have not received a compact with the state — the only federally recognized tribe operating gaming casinos in the U.S. without a compact — and raised questions about the billions of dollars the state has lost because of that fact.
“They have spent billions all over the U.S. and outside of the U.S. — if you have a child with college debt, that should bother you,” Dial said. “The Poarch Creeks and their money have been directly responsible for killing lottery bills that would have paid for that college. And they put that money into other states, to help their kids go to college debt free.”
To that end, current state Sen. Jim McClendon led off the press conference with legislation that would prevent PCI, and all other gaming entities in the state, from contributing to political campaigns — directly or indirectly.
“I am not making claims of corruption, but we must be very wary of the appearance of corruption,” McClendon said. “I’m not making claims of undue influence based on monetary donations, but we must be very wary of undue influence.
“Now is the time to put a stop to this invasion of gambling dollars.”
McClendon and Dial each claimed the Poarch Creeks have dumped more than $4 million into recent elections, and McClendon also blamed the tribe for his recent lottery bills dying quick deaths despite receiving favorable receptions from voters and other lawmakers.
Mclendon predicted that there would be legal challenges to his legislation, but he compared it to laws barring regulated industries from contributing to the Alabama Public Service Commission.
“I expect there will be legal challenges to this legislation,” he said. “Rest assured, it will come from those with big bucks.”
He also expects some pushback from his colleagues in the Legislature.
“Since a number of people in the Senate have taken gambling money, I’m sure they will speak up,” McClendon said. “It’ll be interesting to see what position they take.
“There is a lot of money flowing from gambling interests and I don’t think it’s healthy at all.”
Tuesday’s press conference comes as the 2020 legislative session gets under way and lawmakers are expecting to tackle new gambling legislation that might finally put an end to the purgatory state in which Alabama gambling exists.
Currently, PCI operates three electronic bingo casinos, but doesn’t have a compact with the state and pays zero state taxes on the billions they collect each year. There are also three operating dog tracks, two of which offer electronic bingo games and a third that offers pari-mutuel wagering machines.
For years, lawmakers have toyed with the idea of legalizing some form of gambling, but the various interested parties involved have never been able to come together and reach an agreement. That usually results in gambling bill after gambling bill dying for lack of support in one house or the other.
Most recently, it has been the Poarch Creeks who have done the majority of the killing, knocking down gaming bills — with the help of tribe-friendly lawmakers — that they believe will cut into their current near-monopoly. In 2019, for example, one state senator, Greg Albritton, with the help of Senate President Del Marsh, managed to kill a McClendon-sponsored bill that was very popular with other lawmakers, because it cut all interested parties, including the Poarch Creeks, in on the games.
Another bill that would have allowed the tracks at VictoryLand and GreeneTrack to operate the same games as PCI was also killed.
Such heavy-handedness has rubbed a number of lawmakers the wrong way, and PCI’s quick ascent to power has also ruffled the feathers of longtime powerbrokers around the state.
Those hard feelings helped spawn Poarch Creek Accountability Now (PCAN), for which Dial serves as spokesperson. The non-profit has not disclosed its funding sources, which is legal, and Dial said at Tuesday’s press conference that it wouldn’t out of fear of retribution from PCI.
Dial released a trove of documents to the media, many of which show that federal authorities question PCI’s federally recognized status because of the Alabama tribe’s sketchy history. That status was achieved in 1984, and no one questioned it for several years. However, when PCI asked the Interior Department to approve trust lands for gaming at the Tallapoosa site in Montgomery, Bernhardt and his legal team apparently discovered that there fatal flaws.
Most notably, for a tribe to achieve federally recognized status, it has to prove that it had a pre-existing relationship with the U.S. government. The Poarch Band, which was a mish-mash of former Creek groups left behind after the Trail of Tears, never had such a relationship, according to documents contained within Interior Department legal research.
That is why Bernhardt and his team refused to approve the Tallapoosa lands for gaming in 2009. That decision was later withdrawn after the Interior Department failed to come to a comprehensive agreement on the lands, and PCI overall, within the required timeframe, and PCI was allowed to move forward with gaming operations at the site.
The state has challenged PCI’s standing in a federal lawsuit, and Escambia County challenged it another, with both citing problems with its history. However, neither lawsuit specifically addressed the issues raised by Bernhardt, nor did they challenge individual land trust decisions.
District 2 candidates criticize Coleman over fraud allegations
Jeff Coleman has no friends on the campaign trail.
After APR published a story on Wednesday that recapped the U.S. government’s fraud allegations against his moving company in 2015, Coleman’s challengers in the race for Alabama’s 2nd Congressional District seat piled on.
“Jeff Coleman taking advantage of military families in a time of war is despicable,” said Jessica Taylor.
“Jeff Coleman was faced with a decision — serve the military or steal from them. He chose profit over patriotism,” said Troy King.
The comments from the other candidates shouldn’t come as a surprise. They have been hammering Coleman, the presumed frontrunner in the race, according to internal polling viewed by APR, over the fraud allegations hoping that the four-year-old case caught on with voters in the Wiregrass.
APR’s story was the most comprehensive to date, detailing numerous specific instances of fraud alleged by federal prosecutors and supported by witness testimony and documents. Many of the witnesses who testified in depositions in the case were employees in Coleman’s company.
And the candidates are hopeful that those details are enough to make voters question their decision to vote for Coleman.
“Jeff Coleman only sees military families as a cash cow to be exploited to line his own pockets,” Taylor said. “As your next congresswoman, I will fight to ensure that we stand behind our men and women in uniform no matter what.
“Our nation’s debt is reaching critical levels and the theft of taxpayer dollars and defrauding military families only weakens our nation. As a conservative and a patriot, I’m appalled that Jeff Coleman thinks that qualifies him to represent us in congress.”
King noted that Coleman’s moving business, Coleman Worldwide, would also cause additional problems. In response to questions about the fraud case and his ability to be impartial concerning military contracts if elected, Coleman has promised to recuse himself and not vote on any military contracts.
“When faced with another decision between making money or serving the citizens of the Second District, he chose the money,” King said of Coleman. “In the process, he disqualified himself from voting on issues that matter most to the military bases in the district, and, once again, put profit ahead of patriotism.”
While King and Taylor, who are polling in second and fourth place, respectively, were harsh with their criticisms of Coleman, Barry Moore, who is running just behind King, took a more timid approach.
“Hopefully all of the facts will be brought to light soon and everyone involved can move forward,” Moore said. “I trust the voters of District 2 to do their due diligence and vote informed.”
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