HOUSTON – With the plea of an 80-year-old
Houston man, all 14 charged in the scam involving Continuum Healthcare and its
various health centers have been convicted, announced U.S. Attorney Ryan K.
Patrick.
Bobby Rouse admitted to conspiring to pay and
receive kickbacks and to money laundering relating to the Medicare program
today.
A total of 13 others have been convicted in
relation to the scheme. A federal jury convicted Cheryl Waller, 73, of Houston, March 2, 2017, after a three-day trial
on one count of conspiracy to pay and receive kickbacks and one count of
receiving kickbacks. Those all convicted on the conspiracy count include Steven Houseworth, 46, James Bobino, 50, Ernestine Johnson, 60, Jackie
Harris, 56, and Vermon Lacy III, 35, all of Houston; David Edson, 71, Palm
Harbor, Florida; Jeffery Parsons, 60, Crockett; Aretha Johnson, 67, Wimberley;
Inger Michelle Pace, 57, Missouri City; Ronald Turner, 59, Fresno; Deborah
Davis, 56, Atlanta, Georgia; and Mary Browning, 71, Beasley. Edson and Parsons
were also convicted of two counts of money laundering. Johnson also pleaded
guilty to one count of money laundering, while Pace and Turner each further
admitted to paying and receiving kickbacks.
Rouse, Houseworth, Edson and Parsons were
part of the executive team for Continuum Healthcare LLC, which owned Westbury
Community Hospital in Houston as well as community mental health centers in the
Houston area known by their locations as Hornwood, Baytown and Missouri City.
During his plea today, Rouse admitted to
participating in a kickback scheme to pay co-defendants to bring patients to
Continuum. He admitted to causing Medicare to pay $18.8 million based on false
and fraudulent claims.
Each location operated a partial
hospitalization program (PHP). The PHP was supposed to be a treatment program
for individuals with mental illness, intended to closely resemble a highly
structured, short-term hospital inpatient program. However, while it was a
distinct and organized intensive treatment program, it offered less than
24-hour daily care.
In 2010, Continuum opened Westbury Community
Hospital with Hornwood and Baytown becoming outpatient centers and continuing
to operate their existing PHPs under the Westbury name. Westbury also opened a
PHP.
Rouse, Houseworth, Edson and Parsons were
responsible for the day-to-day operation of Continuum/Westbury and were
involved in the implementation of the various kickback programs. Numerous
people were referred for treatment in exchange for payment. However, the vast
majority did not qualify for PHP services, because they were not experiencing
an acute psychotic episode or were actually suffering from mental retardation,
dementia or Alzheimer’s.
Aretha Johnson, Pace, Bobino, Waller,
Browning and Davis each owned personal care homes in Houston, while Ernestine
Johnson, Harris, Lacy and Turner were marketers for Continuum. Each admitted
receiving payment to refer the patients, receiving amounts ranging from
$130,000 t0 $2.6 million each.
In total, Continuum billed Medicare
approximately $189 million in total for fraudulent PHP services and Medicaid
paid approximately $66 million on those clams.
U.S. District Judge Gray Miller accepted the
plea and has set sentencing for Jan. 23, 2020, at which time Rouse faces up to
10 years in prison and a possible $250,000 maximum fine. Rouse was permitted to
remain on bond pending that hearing.
The FBI, Department of Health and Human
Services - Office of the Inspector General, Texas Attorney General's Medicaid
Fraud Control Unit and IRS - Criminal Investigation participated in the joint
investigation. Assistant U.S. Attorneys Tina Ansari and Special Assistant U.S.
Attorney Justin Blan are prosecuting the case.
