Cold Calls for Cash: Chicago-Area Telemarketing Owner Convicted of Selling Medicare Patient Referrals

Well, their Medicare numbers. Same idea.

What happened?

On August 31, 2016, the U.S. Attorney's Office for the Northern District of Illinois, part of the Department of Justice (DOJ), announced that a federal jury in Chicago convicted Sundae Williams, 47, of South Holland, Illinois. She owned Serenity Marketing Inc., doing business as Serenity Living, a telemarketing company in Homewood.

After a five-day trial, the jury convicted her of one count of conspiracy to solicit and receive kickbacks for referring Medicare patients and six counts of soliciting and receiving kickbacks for referrals. Each count carried up to five years.

How the scheme worked

According to evidence at trial:

• Serenity used unsolicited cold calls to recruit patients, including Medicare beneficiaries, for home health care services.
• Employees were trained to cold-call Medicare beneficiaries and induce them to accept home health services.
• If prospects expressed interest, employees obtained their personal information, including their Medicare number.
• Serenity passed this information on to home health agencies that had agreed to pay per patient for referrals.

Others convicted in the same investigation were James Ademiju, a nurse who ran two suburban nursing agencies, and Dr. Alan Newman and nurse manager Diana Jocelyn Gumila of Suburban Home Physicians, doing business as Doctor at Home. Ademiju testified that some of his illegal payments went to Serenity. He also admitted sending patients he obtained from Serenity to home-physician companies because he believed the doctors there would order home health services even for patients who did not qualify.

Update: the sentence

On March 2, 2017, the office announced that U.S. District Judge John J. Tharp Jr. sentenced Williams to 12 months and one day in prison and ordered her to forfeit $599,000. The prosecutors' sentencing memo said that for at least four years she "helped fuel a system" in which nursing agencies and doctors billed Medicare for services patients did not need or qualify for.

The Department of Health and Human Services, Office of Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI) and the Railroad Retirement Board Office of Inspector General were part of the announcement.

Here's the thing ...

Per-patient payments. That's the phrase that gets you.

In most industries, pay-per-lead is normal. But in federal health care, paying for referrals of Medicare patients can violate the Anti-Kickback Statute. Same business model, different legal world.

And notice the cold calls themselves were the engine. Cold-calling seniors to sell them home health services, getting their Medicare numbers and selling them to agencies is a chain that ends in a courtroom.

What to do this week

• Health care marketers: have a health care lawyer review any per-referral or per-patient payment arrangement.
• Never collect Medicare numbers on a cold call to sell to providers.
• Providers: don't buy patient leads from telemarketers.
• Seniors: don't give your Medicare number to someone who called you out of the blue.